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Tuesday
May 21, 8:11 am Eastern Time
Company Press Release
North
American DataCom Reports Nine-Month Results: Debt and Losses
Reduced
IUKA,
Miss.--(BUSINESS WIRE)--May 21, 2002--North American DataCom,
Inc. (OTCBB:NADA - News), the broadband application service
and data storage company, announced financial results for
its third quarter ended March 31, 2002. "I am greatly pleased
to report that our cost reduction and capital structure programs
have reduced our debt by 88%, and our net loss by 78%, compared
to last year's results," said Robert Crawford, President and
Chief Executive Officer, North American DataCom.
For the nine-month period ended March 31, 2002, the Company
realized net revenues of $346,877, compared to $358,372 in
fiscal 2001. The net revenues for continuing services increased
by 16%, to $300,911, 81% of which was realized from Internet
revenues, and 19% from paging revenues. The nine-month period
ended March 31, 2001 included data storage revenues of $62,884,
and conduit sales of $43,534 to Bell South. Comparing the
nine-month period ended March 31, 2002, with the same nine-month
period of the prior year revealed the following results: Internet
revenues increased markedly to $243,991 (from $192,816) while
paging revenues decreased slightly to $56,920 (from $59,138).
Conduit and broadband sales for 2002 have not been actively
pursued due to market conditions. However, the Company sold
$15 million of conduit in 2002, compared to $43,534 in the
three-month period ended March 31, 2001, but did not record
this one-time revenue. The data storage business for 2002
has decreased from $62,884 to $45,966. The Company expects
this revenue source to improve considerably in the next year
as the Global PTX application service business develops.
"We believe that the Global PTX application services startup
revenues of approximately $110,000, which are not included
in our consolidated results, foreshadow the success of Global
PTX, in which the Company is a joint venture partner," said
Mr. Crawford.
"We are very excited about the Company's prospects in China,
where the Company has recently opened a satellite office.
Through the Shanghai office, we are negotiating the formation
of strategic partnerships that should greatly strengthen Global
PTX's private trade exchange market position," said Mr. Crawford.
"These ventures will build on the Company's application services,
data storage capabilities and communications network services
to provide PTX software and ASP expertise to customers in
need of global marketing and product supply solutions."
The Company reported a net loss for the nine-month period
of $575,362, a figure that is 78% lower than the $2,659,434
loss for the same period a year ago. Roughly half of this
dramatic reduction is directly attributable to the expense
reduction program established in June 2001. Selling, General
and Administrative costs for the period were reduced by 35%,
to $1,453,556, compared with $2,245,673 a year ago. The balance
of the reduction comes from Other Income that totaled $637,189.
This resulted from the income from a one-time fiber optic
conduit sale, and is slightly reduced by charges of $84,026
resulting from the start up of the Global PTX venture.
The conduit sale is part of the Company's plans to improve
its capital structure for future growth. The $15.1 million
sale was the major reason in an 88% reduction in debt and
$627,000 increase in shareholder equity. The 505 miles of
fiber optic conduit from New Orleans, Louisiana to Jacksonville,
Florida was acquired in March 2000. A debt reduction of $15.1
million resulted from the $14.5 million of fiber optic conduit
assets sale. This sale was also the primary reason for the
improvement of shareholder equity, providing over $720,000
of income.
The Company has been able to reduce its capital budget for
this fiscal year to approximately $1 million. These expenditures
are earmarked for equipment and software support of the Company's
broadband application services. This reduction is due to the
Company's success in acquiring necessary software and hardware
on much more favorable terms than were originally planned.
This budget has been funded through the continued private
placements of equity and debt capital.
Safe Harbor Statement
Statements in this release express management's beliefs and
expectations regarding future performance. These statements
are forward-looking and involve risk and uncertainties. These
risks include, but not limited to, the ability to negotiate
venture agreements, properly identify acquisition partners,
manage and integrate acquired businesses, react to quarterly
fluctuation in results, raise working capitol and secure other
financing, respond to competition and other rapidly expanding
technology, deal with market and stock price fluctuation,
and other risks. These risks are and will be detailed, from
time to time, in North American DataCom, Inc. Securities and
Exchange Commission filings. Actual results may differ materially
from management's expectations.
North American DataCom's principal executive offices are located
at 751 County Road 989, Building 1000, Iuka, MS 38852. For
further information go to our website, www.nadata.com, or
contact Investor Relations, 662/424-5030, and by e-mail at
investorrelations@nadata.com.
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