TIE COMMUNICATIONS REPORTS SECOND-QUARTER PROFIT
TIE COMMUNICATIONS REPORTS SECOND-QUARTER PROFIT SEYMOUR, Conn., Aug. 3 /PRNewswire/ -- Tie/communications, Inc.
(AMEX: TIE), today reported second-quarter net income of $249,000, or six cents a share. The results for the quarter ended June 30 -- an improvement of 19 cents a share from the first quarter -- reflect a broader base to the business, the effect of a vigorous cost-cutting program and adoption of a more appropriate amortization schedule for intangible assets that resulted from TIE's reorganization last year.
TIE, a major marketer of business communications equipment and services, said its sales for the quarter totaled $25.5 million. For the first six months of the year, TIE reported a net loss of $283,000, or seven cents a share, on sales of nearly $50.8 million. TIE reorganized and emerged from a pre-packaged Chapter 11 bankruptcy proceeding on July 1, 1991. As a result of the implementation of Fresh Start Reporting, no comparisons with the results from the same periods a year ago are valid. "Our overall business is slightly improved," said George N. Benjamin III, president and chief executive officer. "We are pleased with the performance of our non-key system products and services, because we have been focusing a great deal of attention of those opportunities. The response to those vigorous marketing programs, and our success at reducing costs, indicates our strategy to become the premier supplier of business communications products and services is working." Mark D. Amatrudo, chief financial officer, said that on April 1 TIE began to amortize the intangible assets that results from reorganization over a 20-year period, replacing the previous 10-year amortization schedule. The new 20-year schedule is somewhat more conservative than the intangible asset amortization lives used by the company's main competitors. Under the previous, unusually conservative 10-year schedule, TIE had been at a comparative disadvantage in its financial reporting. Additionally, the longer period for amortizing reorganization intangibles is more appropriate for a company that swiftly emerged from a pre-packaged Chapter 11 with substantially all of its creditors made fully whole, Amatrudo said. The change increases operating earnings by $224,000 in the quarter, he said. A second major factor in TIE's improved results has been the company's cost-reduction program, Amatrudo said. Despite a slight increase in sales, second-quarter operating expenses, exclusive of the savings in amortization expense, decreased by $600,000 from first- quarter levels. Benjamin said sales of non-key system equipment accelerated during the quarter. This includes sales of System 4002 and 5002 Plus voice mail products, Mitel PBX equipment, On-Hold Marketing Services and other products and services. For example, Benjamin said, 25 percent of the voice mail systems sold by the company during May and June went to customers who connected the equipment to non-TIE telephone systems. That reflects the addition of an entirely new group of customers who are doing business with TIE on the basis of its new and improved product lines, Benjamin said. "Business customers have a wide variety of needs, and our lines of products and services now more fully respond to these needs," said Benjamin. "Today's voice mail customers may well become tomorrow's PBX or key-telephone systems customer. Our goal is to satisfy customer needs at all levels and in all business communications product lines." TIE is based in Seymour, Conn. TIE/telecommunications Canada Limited, a 63 percent owned subsidiary, is based in Markham, Ontario, and its shares are traded on the Toronto and Montreal stock exchanges. TIE is a member of the Marmon Group of companies, an international association of more than 60 autonomous manufacturing and service companies with sales of nearly $4 billion. TIE/COMMUNICATIONS, INC. Quarterly And First Half Results Second Quarter(A) First Six Months(A) Net revenues $25,550,000 $50,771,000 Operating income (loss) before amortization 234,000 (11,000) Amortization expense (294,000) (844,000) Operating income (loss) (60,000) (855,000) Royalties and other income, net 418,000 706,000 Pretax income (loss) 358,000 (149,000) Net income (loss) 249,000 (283,000) Earnings per share (loss) $.06 ($.07) Average shares 3,981,338 3,981,338 (A) Because of Fresh Start Reporting, figures are not comparable with the same periods of the prior year. -0- 8/3/92 /CONTACT: George N. Benjamin III of TIE/communications, 203-888-8001/ (TIE) CO: TIE/communications, Inc. ST: Connecticut IN: TLS SU: ERN
TS-SM -- NY025 -- 6072 08/03/92 11:05 EDT
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|Date:||Aug 3, 1992|
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