CHATSWORTH, Calif., Aug. 16, 1999 (PRIMEZONE) -- Focus Wireless Communications, formerly known as Intellicell Corp. (Nasdaq:FONE) announced a net loss for the quarter ended June 30, 1999 of $1,681,000 or $(0.24) per share (or a loss of $462,000 net of non-recurring charges for severance costs of former management of $1,219,000) compared to a net loss of $562,000 or $(0.13) per share for the same period last year. Revenue for the quarter was $7,553,000 compared to $8,685,000 year. On a sequential basis, the Company's revenue increased 13.4 percent and losses from operations (excluding non-recurring severance costs) decreased 7.8 percent, respectively from the first quarter.
For the six-month period, the Company reported a net loss of $2,174,000 or $(0.33) per share compared to a net loss of $1,737,000 or $(0.39) per share for the same quarter last year. Revenue for the period was $14,219,000 compared to $18,616,000 last year.
The Company attributes the majority of the losses to non-recurring severance costs of former management. Net of the non-recurring severance costs, net loss decreased versus the same period in the prior year. The Company said that during the quarter it has hired new management to position Focus Wireless Communications to develop relationships with major wireless manufacturers and carriers, while supporting and growing its current business foundation of wireless handset distribution. During the quarter, Michael Hedge and Mark Fruehan, former executives at CellStar (Nasdaq:CLST), were appointed as president/chief executive officer and executive vice president, respectively.
Chief Executive Officer and President Michael Hedge said, "I am pleased to see that revenues and operating results net of non-recurring charges are favorable compared to the first quarter of 1999. These results are reflective of our efforts to position our Company to take advantage of the many opportunities in the dynamic and growing wireless industry. We believe that we can continue this trend of growing revenues for the rest of the year. Specifically, we think significant opportunities exist in becoming a single source provider for wireless products, services and Internet E-commerce solutions. In particular, we recognize that larger wireless carriers are in need of a solution to manage reseller networks. We believe that we can provide carriers with a program to address these needs.
"We plan to achieve our expansion goals," Mr. Hedge added, "through both internal growth and through acquisitions. Most recently, we announced a merger agreement with Cellular Wholesalers Inc., a wholesale distributor based in Chicago. We expect that the merger will offer our Company many synergies, including a diversified customer base, warehouse facilities, and the ability to accelerate our Internet E-commerce initiative."
The Company noted that the merger is subject to shareholder approval and certain other financing and closing conditions. The Company also said that it recently changed its name to Focus Wireless Communications. The new name is meant to reflect the new strategic direction of the Company's recently appointed management team.
Focus Wireless Communications was founded in 1991. The Company's expertise is to provide innovative wireless products and services, utilizing the efficiencies of the Internet e-commerce solutions. The Company intends to continue to expand its business by establishing direct relationships with major wireless manufacturers, carriers and resellers.
Statements included within this press release that are not historical in nature constitute forward-looking statements for the purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Investors are cautioned that this press release may contain certain such forward- looking statements that involve substantial risks and uncertainties. When used, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward looking statements. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Risks include potential delays in the completion of developing the Internet e-commerce solution, unanticipated costs to develop and maintain the system, potential lack of customer acceptance of this order processing method, and potential costs of integration of personnel and procedures with CWI. Further management discussion of risks and uncertainties can be found in the Company's quarterly filings with the Securities and Exchange Commission and other periodic filings.
Intellicell Corp.
Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
1999 1998
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Net sales $ 7,553,000 $ 8,685,000
Cost of sales 7,196,000 8,036,000
Gross profit 357,000 649,000
Selling, general and
administrative expenses 807,000 1,087,000
Severance expenses 668,000 -
Non-cash severance expenses 551,000 -
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2,026,000 1,087,000
Loss from operations (1,669,000) (438,000)
Other income (expense):
Interest expense (23,000) (79,000)
Other Income (expense) 11,000 (45,000)
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Loss before income tax benefits (1,681,000) (562,000)
Income tax benefits - -
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Net loss $(1,681,000) $ (562,000)
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Basic loss per share $ (0.24) $ (0.13)
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Diluted loss per share $ (0.24) $ (0.13)
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Weighted average number of
common shares outstanding 6,948,782 4,415,902
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Intellicell Corp.
Balance Sheets
June 30 December 31,
1999 1998
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Assets
Current Assets:
Cash $ 1,593,000 $ 362,000
Accounts receivable, net of
allowance for doubtful accounts
of $174,000 and $251,000 3,194,000 2,155,000
Inventories, net of reserves
of $371,000 and $592,000 1,124,000 837,000
Notes receivable, net
of allowance for doubtful
notes of $662,000 and $1,521,000 - -
Deposits for purchase of inventory 84,000 254,000
Prepaid expenses and
other current assets 391,000 211,000
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Total current assets 6,386,000 3,819,000
Property and equipment,
net of accumulated
depreciation of $325,000
and $242,000 395,000 359,000
Other assets 166,000 -
----------- -----------
Total assets $ 6,947,000 $ 4,178,000
----------- -----------
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 2,810,000 1,150,000
Revolving credit facility 1,376,000 -
Accrued expenses 467,000 179,000
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Total current liabilities 4,653,000 1,329,000
Commitments and contingencies - -
Stockholders' equity
Preferred stock -$.01 par value,
1,000,000 shares
authorized and none issued - -
Common stock -$.01 par value,
15,000,000 shares authorized
7,014,893 and 5,915,902 shares
issued and outstanding 69,000 59,000
Additional paid-in capital 12,987,000 11,379,000
Accumulated deficit (10,762,000) (8,589,000)
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Total stockholders' equity 2,294,000 2,849,000
Total liabilities and
stockholders' equity $ 6,947,000 $ 4,178,000
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Contact: Linda Press/Steve Hawkins
Sitrick And Company
(310) 788-2850
or
David Kane, CFO
Focus Wireless Communications
(818)709-2300