Farmstead Telephone Group, Inc. Reports First Quarter 2005 Operating Results
May 13 2005 - 4:17PM
PR Newswire (US)
Farmstead Telephone Group, Inc. Reports First Quarter 2005
Operating Results EAST HARTFORD, Conn., May 13
/PRNewswire-FirstCall/ -- Farmstead Telephone Group, Inc.
(AMEX:FTG) announced operating results for the first quarter ended
March 31, 2005. For the quarter ended March 31, 2005, revenues were
$2,409,000, 29 percent below revenues of $3,406,000 reported for
2004. The Company reported a net loss for the quarter of $639,000,
or $(0.19) per share, compared with a net loss of $341,000, or
$(0.10) per share, in 2004. The net loss for the 2005 quarter
included one-time expenses of $84,000 incurred in connection with
the early termination of the Company's credit facility with
Business Alliance Capital Corporation, in favor of a larger credit
facility with The Laurus Master Fund, LTD ("Laurus"). The Company
attributed its 2005 operating results to lower-than-expected
revenues due to continued sales price erosion and some loss of
market share as competition has intensified, particularly in the
sale of parts and systems to larger companies; an undersized sales
force; and a still cautious telecom equipment spending environment.
Jean-Marc Stiegemeier, Farmstead's CEO and President commented,
"Although first quarter revenues were disappointing, we
nevertheless attained several significant milestones in the
execution of our turnaround strategy. Beginning in March, we
launched our Small and Medium Business (SMB) Group to sell products
and services to businesses with 200 and fewer employees. We also
hired 23 former Avaya sales and management professionals for the
SMB group. Total new hires of sales and management professionals
since March now stand at 29. In addition, we concluded a
refinancing of our revolving credit facility, obtaining a $3
million credit line with Laurus, which will provide us the
additional working capital to execute certain elements of our plan.
During this period, we expanded our national footprint by seven
states. Our rebuilding process is primarily focused on the SMB
marketplace, and these efforts are now beginning to show results,
as evidenced by a significant increase in March 2005 bookings and
revenues over recent prior months. The first quarter was the
beginning of our committed redirection of the Company. "On May 12,
we announced the formation of our new wholly owned subsidiary, One
IP Voice. When operational, One IP Voice will provide carrier-based
Hosted IP Telephony solutions along with Network Services. The
primary target of the One IP Voice offering will be the SMB market.
The facilities-based One IP Voice offering will include Hosted IP
Centrex and IP Trunking services, bundled with private One IP Voice
"Last Mile" connectivity on a national basis, long distance
calling, On Net calling, local area calling, 911 capabilities, and
Wide Area Network (WAN) voice and data connectivity. One IP Voice
will also offer a consumer VOIP product. "These are exciting times
at Farmstead and for the industry. The companies that will survive
this paradigm shift to VOIP will be the companies able to commit
the intellectual and capital resources required to meet their
customers changing needs. Farmstead is committed to continue
building and executing a plan that will enhance shareholder value."
About Farmstead Farmstead Telephone Group, Inc. is an Avaya Inc.
Gold Business Partner, selling, installing and maintaining both new
and refurbished Avaya business communications products nationwide.
Further information about Farmstead Telephone may be found at
http://www.farmstead.com/. Farmstead Telephone Group, Inc.
Financial Summary Quarter Ended March 31, 2005 2004 Revenues
$2,409,000 $3,406,000 Net Loss $(639,000) $(341,000) Basic and
Diluted Net Loss Per Share $(.19) $(0.10) Basic and Diluted
Weighted Average Shares Outstanding: 3,327,868 3,312,666 We are
interested in your feedback and comments. To respond to questions
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This release contains forward-looking statements that involve risks
and uncertainties. In addition to historical information, investors
should consider carefully the risks associated with an investment
in the Company's securities as previously outlined by the Company
in its prior filings with the Securities and Exchange Commission.
CONTACT: Robert G. LaVigne, CFO Farmstead Telephone Group, Inc.
Voice: 860-610-6002 Fax: 860-610-6001 DATASOURCE: Farmstead
Telephone Group, Inc. CONTACT: Robert G. LaVigne, CFO of Farmstead
Telephone Group, Inc., +1-860-610-6002 Web site:
http://www.farmstead.com/
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