Apr 03, 2002 Sarasota, FL
Teltronics, Inc. (OTC Bulletin Board: TELT) today announced its financial results for the year ended December 31, 2001. Revenues for the year 2001 increased to $64.1 million from $43.2 million for the year 2000, an increase of 48.3%.
Gross profit for the year 2001 decreased from 47.0% in 2000 to 35.4 % in 2001. The net loss for the year 2001 was $6.7 million or $1.38 per share diluted, as compared to a net loss of $1.5 million or $0.36 per share diluted for the year 2000. The Company's increased net loss in 2001 was primarily attributed to the first full year of operating expenses from the Harris 20-20 Switching Product Line and the Telident acquisition, transition services provided in 2001 by Harris Corporation related to the acquisition of the Harris 20-20 Switching Product Line and an overall economic slowdown in the second half of 2001.
On March 27, 2002, the Company and Harris Corporation entered into a Master Restructuring Agreement to restructure the Company's obligations to Harris for the acquisition of the 20-20 Switching Product Line, including transition services and other expenses. Under this agreement, the Company delivered to Harris a promissory note in the amount of $9.2 million. The terms of the promissory note provide for monthly payments of $97,000, including interest at 8%, beginning in May 2002 through May 2006. A balloon payment of $7.2 million will also be due in May 2006. Harris Corporation converted $4 million of accrued expenses into 40,000 shares of the Company's Preferred Series C Convertible Stock.
"2001 was a challenging year for the Company," said Ewen Cameron, Teltronics' President and Chief Executive Officer. "The slowdown in the economy, particularly in the telecommunications industry negatively impacted our sales. The acquisition of the Harris 20-20 Switching Product Line in 2000 has provided tremendous opportunities for the Company, however, it was by far the largest and most challenging acquisition the Company has ever done."
"Completing the Harris restructuring was a significant step for Teltronics," Cameron continued. "The completion of the acquisition and the restructuring of the debt will allow us to re-focus our attention on evaluating our costs and expenses to ensure that we have the most appropriate cost structure for our anticipated revenues. We are now focused on bringing the Company back to profitability."
The Company received notification from the Nasdaq Listing Qualifications Panel ("Panel") on March 28, 2002 that the Panel made a determination to de-list the Company's securities from the Nasdaq Stock Market effective with the open of business on April 1, 2002. At that time, the Company's securities will be listed on the NASD OTC Bulletin Board.
About Teltronics Inc.
Teltronics, Inc. is dedicated to excellence in the design, development, and assembly of electronics equipment and software to enhance the performance of telecommunications networks. The Company manufactures telephone switching systems and software for small-to-large size businesses, government, and 911 public safety communications centers. Teltronics provides remote maintenance hardware and software solutions to help large organizations and regional telephone companies effectively monitor and maintain their telecommunications systems. The Company also serves as an electronic contract-manufacturing partner to customers in the U.S. and overseas. Interactive Solutions, a subsidiary of Teltronics, Inc., designs, manufactures and markets technologically advanced systems for the hearing impaired. Further information regarding Teltronics can be found at their web site, http://www.teltronics.com .
