SAN DIEGO, Aug. 15, 2003 (PRIMEZONE) -- Axesstel, Inc. (OTCBB:AXES), a leader in developing, manufacturing and marketing high-quality, CDMA-based fixed wireless local loop (WLL), hybrid terminals and gateway solutions to operators worldwide, today announced financial results for the fiscal 2003 second quarter, which ended June 30, 2003, and for the first six months of the fiscal year. In accord with management expectations, results reflected continued strong revenue growth.
Key consolidated performance highlights for the second quarter included:
-- Total net sales for Axesstel for the three months ended June 30,
2003 were $4,962,400. No sales were reported for the second
quarter of the previous year.
-- Axesstel's operating income for the second quarter ended June 30,
2003, was $325,628, an increase of $356,757 over the loss of
$(31,129) recorded for the second quarter of the previous year.
-- Axesstel's net income for the second quarter of 2003 was $205,085,
an increase of $236,300 over the net loss of $(31,215) reported
for the second quarter of the previous year.
For the first six months of 2003, key consolidated performance highlights included:
-- Total net sales for Axesstel for the six months ended June 30,
2003 were $8,241,505, as compared with no income reported for the
first six months of the previous year.
-- Axesstel's operating income for the six months ended June 30,
2003, was $1,636,341, an increase of $1,760,631 over the operating
loss of $(124,290) recorded for the first six months of the
previous year.
-- Axesstel's net income for the first six months of 2003 was
$1,012,811, an increase of $1,138,136 over the net loss of
$(125,325) reported for the first six months of the previous year.
Because of the corporate combination with Axesstel, Inc., a California corporation, which was entered into on July 16, 2002 and which was executed and accepted as effective August 22, 2002, the new Axesstel, Inc., a Nevada corporation formerly known as Miracom Industries, Inc., exhibits vastly improved financial results. The former Miracom Industries, Inc. was a shell company with no material operations.
"Second-quarter results validate our expectations of continued growth in 2003," said John Chough, chief financial officer for Axesstel. "With no revenues for two quarters of the previous fiscal year from the shell company, it is the sequential revenue comparisons that tell the story. Our net sales grew 51% between the first and second quarters this year, from $3,279,105 in Q1 to $4,962,400 in Q2."
"In making other sequential comparisons, it's important to note that first-quarter net sales were comprised almost entirely of high-margin engineering services revenues, with their typically low cost of goods sold, as compared to a more normal second-quarter mix of engineering services and product sales," Mr. Chough continued. "It's also worth noting that the sequential increase in selling, general and administrative costs amounts to an investment in business development -- including a more than $300,000 charge related to stock issuance for newly hired engineers -- that will lay the foundation for growth going forward. Those two factors largely account for the sequential decline in EPS from $0.13 in Q1 to $0.03 in Q2, but that decline was well within our expectations and we are on track in terms of our overall 2003 business development plan."
"We believe Axesstel is gaining traction in meeting the world's need for next-generation CDMA products," said Satoru Yukie, president and CEO of Axesstel. "We are positioned to provide connectivity to developing countries that lack a traditional copper-wire infrastructure, and to provide developed countries with the convergence of voice and data applications that today's telecommunications call for."
For further information, please contact Sean Collins, Partner, CCG, at (818) 789-0100, ext. 202. Media inquiries should be directed to Bock Communications, Inc. at 714.540.1030, ext. 14 (Valerie Christopherson) or 19 (Jennifer Tolkachev).
About Axesstel, Inc.
Axesstel, Inc. (OTCBB:AXES) is powering the next generation of wireless, fixed and hybrid mobile devices based on CDMA, CDMA2000, 802.11, and emerging 3G and 4G broadband IP technologies. The company is pursuing technology and applications that will enable the development and delivery of carrier-class subscriber based solutions, including fixed terminals, handsets and wireless payphones. To date, Axesstel's Qualcomm-licensed products can be found in more than 15 countries worldwide. The company is headquartered in San Diego, Calif. with a research and development center in Seoul, Korea. For more information, visit the company's Web site at www.axesstel.com.
Axessel, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive
Income (Loss)(a)
For the quarter and six months ended June 30, 2003 and 2002
(Unaudited)
Three Three Six Six
Months Months Months Months
ended June ended June ended June ended June
30, 2003 30, 2002 30, 2003 30, 2002
Net Sales $4,962,400 $ -- $8,241,505 $ --
Cost of goods
sold 2,229,354 -- 2,784,825 --
---------- ---------- ---------- ----------
Gross profit 2,733,046 -- 5,456,680 --
Selling, general
and administrative
expenses 2,407,418 31,129 3,820,339 124,290
---------- ---------- ---------- ----------
Operating income
(loss) $ 325,628 $ (31,129) $1,636,341 $(124,290)
---------- ---------- ---------- ----------
Other income
(expense)
Interest income
and other income 110,680 -- 226,736 --
Interest expense
and other expense (72,247) (86) (78,481) (235)
Total other income
(expense) 38,433 (86) 148,255 --
Income (loss)
before income
taxes 364,061 (31,215) 1,784,596 (124,525)
Provision for
income taxes 158,976 -- 771,785 800
Net income (loss) $ 205,085 $ (31,215) $1,012,811 $(125,325)
Other comprehensive
income (loss)
Foreign currency
translation
adjustment (36,966) -- (46,321) --
Comprehensive
income (loss) $ 168,119 $ (31,215) $ 966,490 $ (125,325)
Basic and diluted
earnings (loss)
per common share $ 0.03 $ (0.00) $ 0.16 $ (0.02)
Weighted average
number of common
shares 6,366,278 7,291,821 6,222,844 7,291,821
(a) Selected quarterly financial information. The information
contained herein does not include the full unaudited quarterly
financial information. Please see the Company's report on Form
10Q for the quarter ended June 30, 2003 for the unaudited
financial information and notes thereto.
Axesstel, Inc. and Subsidiaries
Consolidated Balance Sheet (b)
June 30, 2003 (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $1,576,567
Accounts receivable, net
of allowance for doubtful
accounts of $0 1,703,316
Investment in government bond 91
Prepayments and other current assets 638,966
Total current assets 3,918,940
Property and equipment, net 2,192,177
Other assets 1,618,738
Total assets $7,729,855
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $1,188,752
Deferred tax liability 771,649
Current installments of
obligations under capital leases 211,200
Accrued expenses and
other liabilities 1,131,256
-----------
Total current liabilities 3,302,857
Long-term liabilities
Obligations under capital
leases, excluding current
Installments --
-----------
Total long-term liabilities --
Commitments and contingencies --
Stockholders' equity
Common stock, $0.001 par
value per share. Authorized
50,000,000 shares; 6,580,316
shares issued and outstanding 6,580
Additional paid-in capital 3,636,877
Accumulated other comprehensive loss (89,376)
Retained earnings 872,917
Total stockholders' equity 4,426,998
-----------
Total liabilities and
stockholders' equity $7,729,855
(b) Selected quarterly financial information. The information
contained herein does not include the full unaudited quarterly
financial information. Please see the Company's report on Form
10Q for the quarter ended June 30, 2003 for the unaudited
financial information and notes thereto.