Farmstead (AMEX:FTG)
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Farmstead Telephone Group, Inc. Reports Year-End and Fourth
Quarter 2004 Results
EAST HARTFORD, Conn., March 31 /PRNewswire-FirstCall/ -- Farmstead Telephone
Group, Inc. (AMEX:FTG) announced operating results for the year and fourth
quarter ended December 31, 2004.
For the year ended December 31, 2004 revenues were $12,344,000, 17 percent
below revenues of $14,909,000 reported for 2003. The Company reported a net
loss for the year of $1,424,000, or $(0.43) per share, compared with a net loss
of $709,000, or $(0.21) per share, in 2003. Fourth quarter 2004 revenues were
$2,711,000, 16 percent below revenues of $3,240,000 reported for the fourth
quarter of 2003. For the quarter, the Company reported a net loss of $494,000
or $(0.16) per share, compared with a net loss of $283,000, or $(0.09) per
share, for the fourth quarter of 2003. The Company attributed these results 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. During the fourth quarter, the Company increased its operating
expenses as it began to execute the first elements of its broad turnaround
strategy. During 2005, the Company continued to hire new executive management
personnel and grow its sales force nationwide.
Jean-Marc Stiegemeier, Farmstead's President and CEO commented, "The fourth
quarter of 2004 represented a period of change and the setting of a new course
that we believe will grow the Company's revenues significantly in 2005, and
return the Company to profitability. During the fourth quarter, the Company
defined its "turnaround plan" and began executing its preliminary stages.
These actions included implementing the initial elements of a strategic
redirection, which is principally based upon building a larger and more highly
qualified sales force, and diversifying the Company's product offerings and
targeted customers on a national basis. The business strategy embraces the
transition to a full communications solutions provider by becoming less
dependent on parts sales and developing more sources of recurring revenues,
such as through installation and maintenance services. We are expanding our
product offerings beyond traditional voice communications products by offering
Internet Protocol, or IP products, and soon will be introducing a unique
Network Services offering. We plan to expand our customer base and revenues by
targeting the small to medium-sized (under 200 employees) business market
("SMB").
"We believe that the results of these initial efforts will have a profound
impact on the Company's revenue growth and return it to profitability in 2005.
We also believe the telecommunications industry is in the early stages of a
paradigm shift that, in fact, is providing an opportunity for the Company. We
have set our new course, and as a team we are excited with its prospects and
the value it will provide our shareholders."
In March 2005, Farmstead entered into an alliance with Avaya designed to
generate incremental SMB revenues. The Company believes that this is the
fastest growing segment of the telecommunications systems and services
business. On March 1, 2005, Farmstead also launched an SMB program targeting
this customer base and, in March 2005 hired an additional 23 experienced sales
professionals that have been deployed in 12 states and 22 cities nationally.
The Company intends to hire additional sales professionals during 2005 to meet
its 2005 SMB revenue expectations.
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 Highlights
Quarter Ended December 31, Year Ended December 31,
2004 2003 2004 2003
Revenues $2,711,000 $3,240,000 $12,344,000 $14,909,000
Net Loss (494,000) (283,000) (1,424,000) (709,000)
Basic and Diluted
Net Loss Per Share $(.16) $(.09) $(.43) $(.21)
Basic and Diluted
Weighted Average
Shares Outstanding: 3,322,182 3,311,601 3,316,794 3,305,439
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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/