Financial: AM Announces Fourth Quarter and Fiscal Year 1998 Results

Financial: AM Announces Fourth Quarter and Fiscal Year 1998 Results

AM COMMUNICATIONS, INC.

Condensed Statements of Operations ($000)

(Unaudited) (Audited)

Three Months Ended Year Ended

March 28, March 29, March 28, March 29,

1998 1997 1998 1997

Revenues $ 4,635 $ 2,216 $ 16,854 $ 10,510

Cost of Sales 2,681 1,321 9,303 5,715

Selling, General

& Administrative 758 763 2,611 2,590

Research and

Development 1,069 1,300 3,937 4,045

Operating Income

(Loss) 127 (1,168) 1,003 (1,840)

Net Income (Loss) $ 105 $ (2,103) $ 937 $ (2,761)

Basic Net Income

(Loss) Per Share $ Nil $ (0.07) $ .03 $ (0.09)

Diluted Net Income

(Loss) Per Share Nil (0.07) $ .03 (0.09)

Shares Used in

Computation of

Basic Net Income

(Loss) Per Share 31,068 31,042 31,053 31,018

Shares Used in

Computation of

Diluted Net Income

(Loss) Per Share 34,005 31,042 33,902 31,018

Condensed Balance Sheet ($000)

March 28, March 29,

1998 1997

(Audited) (Audited)

Cash $ 710 $ 620

Accounts Receivable 1,851 1,160

Inventory 2,073 2,106

Prepaid Expenses and Other 63 68

Total Current Assets 4,697 3,954

Equipment and Fixtures, Net 734 899

Other Assets 19 116

Total Assets $ 5,450 $ 4,969

Current Portion of Capitalized

Lease Obligations $ 108 $ 133

Accounts Payable 991 1,672

Advances 194 177

Accrued Expenses 987 652

Total Current Liabilities 2,280 2,634

Capitalized Lease Obligations – Long Term 39 149

Senior Convertible Redeemable Preferred Stock 2,583 2,583

Stockholders’ Equity 548 (397)

Total Liabilities and Stockholders’ Equity $ 5,450 $ 4,969

AM Communications, Inc. (AMCM) announced Monday financial results for its fourth quarter and 1998 fiscal year ended March 28, 1998. Revenues for the fourth quarter of fiscal 1998 were $4.6 million, up 109% from the $2.2 million report in the fourth quarter of fiscal 1997. The Company reported net income of $105,000 for the recent quarter compared to a loss of $2.1 million a year ago. Revenues for the fiscal year ended March 28, 1998 totaled $16.9 million, up 60% from the $10.5 million reported a year ago. Net income was $937,000 for fiscal 1998 compared to a net loss of $2.8 million for fiscal 1997. As previously announced in April 1998, the Company experienced a significant drop in bookings and backlog which has continued into its first quarter of fiscal 1999. As a result, the Company expects to report an operating loss in excess of $500,000 for its first quarter of fiscal 1999 ended June 27, 1998 on revenue levels of approximately 50% of those reported in the fourth quarter of fiscal 1998. Commenting on the present business situation, Keith D. Schneck, President and CEO said, “Our accomplishments in fiscal 1998 were many, however, we have been impacted by two major customers who have put spending programs involving network monitoring on hold and by lower levels of activity in our OEM business, principally in the international markets. “Our efforts to identify new domestic customer business have included restructuring our sales and marketing activities and adding additional direct sales staff which are just starting to show positive results, but will not contribute meaningful revenues for several months. “As a result, we have reduced our staffing levels in the past several months through layoffs and attrition primarily in non-critical areas. We have also obtained $1 million of committed capital financing to support our business. The Company is continuing its commitment to critical development programs including software and hardware enhancements to its OmniVU system, several of which are expected to be available in the second half of fiscal 1999. “Overall, we remain positive that the worldwide demand for broadband networking infrastructure will provide growth opportunities for AM. Our fiscal 1998 performance shows that the Company is capable of profitably managing that growth.” AM Communications, Inc. (AMCM), founded in 1974, is a market leader in the design, development, and integration of network monitoring systems for the broadband telecommunications industry. AM provides system solutions through its OEM partnerships with the industry leaders (i.e. – General Instrument, Philips Broadband Networks, and Scientific-Atlanta) and directly to end user customers. Additional information of AM’s business activities and products can be found on its Web Site (http://www.amcomm.com).

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