NEW YORK, May 17, 2005 (PRIMEZONE) -- Telestone Technologies Corporation (AMEX:TST) today announced that for the first quarter ended March 31, 2005 it achieved net income of $859,000, compared to net income of $3,282,000 for the first quarter of 2004.
First quarter 2004 net income included an extraordinary gain of $2,773,000 and minority interest of $(368,000). Exclusive of these two items, Telestone's income for the period ended March 31, 2004 was $877,000.
Telestone's first quarter 2005 net income, before extraordinary gain, was $.10 per share based upon total fully diluted shares as of March 31, 2005.
Telestone's first quarter 2005 revenues were $3,533,000, compared to $3,642,000 for the same period a year ago.
Current assets at March 31, 2005 were $29.1 million.
Telestone's flat revenue growth in the first quarter of 2005 was primarily the result of a temporary decrease in telecommunication carriers' capital expenditures on 2G networks in anticipation of PRC government approval of 3G wireless technology later this year. Also impacting revenues was a slowing of infrastructure investments by China Unicom, a Telestone customer we believe is presently considering a business reorganization in 2005.
Assuming government approval of 3G, the company hopes to experience "significant" revenue and profit growth arising primarily from enhanced contract business with both China Unicom and China Mobile, the two largest wireless companies in the PRC. Increased revenues and earnings are also expected to be derived from the company's recently announced three-year product development agreement with China Ericsson to develop a series of 3G products for use on that company's wireless network platforms in China, other southeast Asian countries and India.
Telestone Technologies Corporation is a leading provider of wireless technology coverage solutions and equipment to major telecom companies in the Peoples Republic of China. The company's solutions and equipment are applied in a variety of indoor and outdoor environments including hotels, residential estates, office buildings, airports, exhibition centers, underground stations, highways and tunnels. For additional information, please go to www.telestonetech.com.
SAFE HARBOR Information in this news release may contain statements about future expectations, plans, prospects or performance of Telestone Technologies Corporation ("Telestone") that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The words or phrases "can be," "expects," "may affect," "believed," "estimate," "project," and similar words and phrases are intended to identify such forward-looking statements. Telestone cautions you that any forward-looking information provided by or on behalf of Telestone is not a guarantee of future performance. Telestone's actual results may differ materially from those anticipated in such forward-looking statements as a result of various important factors, some of which are beyond Telestone's control, in addition to those discussed in Telestone's press releases, public filings, and statements by Telestone's management, including, but not limited to, Telestone's estimate of the sufficiency of its existing capital resources, Telestone's ability to raise additional capital to fund future operations, Telestone's ability to repay its existing indebtedness, the uncertainties involved in estimating market opportunities and in identifying contracts which match Telestone's capability to be awarded contracts. All such forward-looking statements are current only as of the date on which such statements were made. Telestone does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.
Consolidated Statement of Operations
(Unaudited)
Three months ended
March 31,
------------------------
2005 2004
US$'000 US$'000
Operating revenues
Net sales of equipment 2,852 3,212
Service income 681 430
--------- ---------
3,533 3,642
--------- ---------
Operating expenses
Equipment and services 1,546 1,683
Sales and marketing 590 277
General and administrative 471 307
Research and development
8 35
Depreciation and amortization 43 25
--------- ---------
Total operating expenses 2,658 2,327
--------- ---------
Operating income 875 1,315
Interest expense (20) (5)
Other income, net 4 -
--------- ---------
Income before income taxes,
minority interest and
extraordinary item 859 1,310
Income taxes expenses - 433
--------- ---------
Income before minority
interest and extraordinary
item 859 877
Minority interest - (368)
--------- ---------
Income before extraordinary
item 859 509
Extraordinary gain - 2,773
--------- ---------
Net income 859 3,282
========= =========
Earnings per share:
Weighted average number of
shares outstanding
Basic 8,310,995 1,708
Dilutive effect of warrants 341,186 -
--------- ---------
Diluted 7,969,809 1,708
========= =========
Net income per share of
common stock
Basic:
Income before extraordinary
gain 0.10 298
========= =========
Net income 0.10 1,922
========= =========
Diluted:
Income before extraordinary
gain 0.10 298
========= =========
Net income 0.10 1,922