Microtest(R), Inc. Announces First Quarter 2001 Results

Apr 18, 2001, 01:00 ET from Microtest, Inc.

    PHOENIX, April 18 /PRNewswire/ -- Microtest(R), Inc. (Nasdaq:   MTST) today
 reported revenue for the first quarter of 2001 of $9.6 million, down 17% when
 compared to the first quarter of 2000.  Revenue was down 17% when compared to
 the fourth quarter of 2000.
     The Company recorded a net loss of approximately $0.6 million, or
 ($0.07) per diluted share for the first quarter of 2001, compared to net
 income of $0.4 million, or $0.05 per diluted share for the first quarter of
 2000.  Both revenue and per share amounts were within the previously announced
 range of probable results.
     Gross margin was 55.4% for the first quarter of 2001, compared to
 57.4% for the similar period in 2000.  Lower overall gross margins were
 attributable to pricing pressures and reduced software sales in the Company's
 Network Appliances & Storage business.
     Vincent Hren, President and Chief Executive Officer, stated, "The
 disappointing revenue comparisons are a result of lower domestic revenue in
 both the NTM and NAS divisions.  First quarter sales of our NAS products is
 especially disappointing given the revenue momentum that we had begun to
 develop during the second half of 2000."
     "We have reduced our expense levels, especially general and administrative
 expenses, during the first quarter in preparation for the lower volume.  We
 plan to continue operating at lower overall expense levels during this period
 of economic weakness.  We are pleased that our cash position has increased to
 $18 million during the first quarter, primarily the result of collection of
 amounts due from the IRS," Mr. Hren continued.
     "Our outlook for the second quarter and balance of the year is clouded by
 the current uncertain economic situation; however, we expect seasonal revenue
 improvement, together with expense control, to generate improved results for
 the second quarter," concluded Mr. Hren
     Microtest will discuss first quarter results during a conference call at
 11:30 a.m. Eastern time (8:30 a.m. Arizona time) Thursday, April 19, 2001.
 Interested parties may listen to the call, Webcast live at
 http://www.microtest.com/MTST/.  The Webcast will also be archived for one
 week for later listening at the same web address.
 
     About Microtest
     Microtest's purpose is to bring people and information together with
 innovative technology that simplifies evolving networks.  Microtest is a
 leader in network test and measurement products such as OMNIScanner(TM)2,
 PentaScanner(R), CertiFiber(R), and OMNIFiber(TM) and network appliance and
 storage products such as FileZerver(TM), DiscZerver(TM), and LinuxZerver(TM).
 Headquartered in Phoenix, Microtest has international offices in Munich,
 Germany; Crawley, United Kingdom; Beijing, China; Sao Paulo, Brazil;
 Guadalajara, Mexico and Singapore.  Visit Microtest at www.microtest.com.
 
     This press release includes statements, which may constitute
 forward-looking statements made pursuant to the safe harbor provision of the
 Private Securities Litigation Reform Act of 1995.  These statements which are
 typically characterized by words as "expect," "believe," "anticipate," and the
 like (and in this release include references to potential future revenue and
 financial condition), are subject to risks and uncertainties that could cause
 actual results to differ materially from the forward-looking statements.
 Factors which would cause or contribute to such differences include, but are
 not limited to, factors detailed in our Securities and Exchange Commission
 filings, and include risks associated with the highly competitive nature of
 the industries in which we compete, the potential for downturns in economic or
 market conditions in the various regions of the world that we sell our
 products, the effect of fluctuations in foreign currencies, the rapidly
 changing technology environment in which we compete and our ability to
 successfully develop and market products and services on an on-going basis.
 We undertake no obligation to update these statements for revisions or changes
 after the date of this press release.
 
 
                        MICROTEST, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,    December 31,
                                                        2001           2000
                ASSETS                              (unaudited)
     CURRENT ASSETS:
       Cash and cash equivalents                      $17,964        $14,479
       Accounts receivable, net                         7,766          7,977
       Inventories, net                                 2,795          3,372
       Prepaid expenses and other current assets          924            963
       Income taxes receivable                             12          3,533
       Deferred income taxes                              948            805
       Total current assets                            30,409         31,129
 
     PROPERTY AND EQUIPMENT, NET                        1,763          1,764
 
     OTHER ASSETS:
       Capitalized software                               395            546
       Deferred income taxes                            2,149          2,289
       Other                                              366            379
               Total other assets                       2,910          3,214
                                                      $35,082        $36,107
 
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
     CURRENT LIABILITIES:
       Accounts payable                                $2,304         $2,366
       Accrued liabilities                              1,903          1,771
       Accrued payroll and benefits                     1,155          1,618
               Total current liabilities                5,362          5,755
 
     STOCKHOLDERS' EQUITY:
       Preferred stock                                     --             --
       Common stock                                         9              9
       Additional paid-in capital                      35,687         35,666
       Translation gain/loss                              (17)            --
       Accumulated deficit                             (4,741)        (4,105)
                                                       30,938         31,570
       Less:  treasury stock, at cost                  (1,218)        (1,218)
               Total stockholders' equity              29,720         30,352
                                                      $35,082        $36,107
 
 
                        MICROTEST, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
 
                                                        Three months ended,
                                                     March 31,       April 1,
                                                        2001           2000
 
     NET REVENUE                                       $9,597        $11,601
     COST OF REVENUE                                    4,284          4,945
       Gross profit                                     5,313          6,656
 
     OPERATING EXPENSES
       Sales and marketing                              3,156          2,975
       Research and development                         2,144          1,993
       General and administrative                         893          1,368
               Total operating expenses                 6,193          6,336
 
     INCOME (LOSS) FROM OPERATIONS                       (880)           320
 
     OTHER INCOME, NET                                    244            134
 
     INCOME (LOSS) BEFORE INCOME TAXES                   (636)           454
 
     INCOME TAX PROVISION                                  --            (20)
 
     NET INCOME (LOSS)                                  $(636)          $434
 
     Basic earnings (loss) per share                   $(0.07)         $0.05
     Weighted average common shares outstanding
      - basic                                           8,575          8,383
 
     Diluted earnings (loss) per share                 $(0.07)         $0.05
     Weighted average common equivalent shares
      outstanding - diluted                             8,575          9,133
 
 

SOURCE Microtest, Inc.
    PHOENIX, April 18 /PRNewswire/ -- Microtest(R), Inc. (Nasdaq:   MTST) today
 reported revenue for the first quarter of 2001 of $9.6 million, down 17% when
 compared to the first quarter of 2000.  Revenue was down 17% when compared to
 the fourth quarter of 2000.
     The Company recorded a net loss of approximately $0.6 million, or
 ($0.07) per diluted share for the first quarter of 2001, compared to net
 income of $0.4 million, or $0.05 per diluted share for the first quarter of
 2000.  Both revenue and per share amounts were within the previously announced
 range of probable results.
     Gross margin was 55.4% for the first quarter of 2001, compared to
 57.4% for the similar period in 2000.  Lower overall gross margins were
 attributable to pricing pressures and reduced software sales in the Company's
 Network Appliances & Storage business.
     Vincent Hren, President and Chief Executive Officer, stated, "The
 disappointing revenue comparisons are a result of lower domestic revenue in
 both the NTM and NAS divisions.  First quarter sales of our NAS products is
 especially disappointing given the revenue momentum that we had begun to
 develop during the second half of 2000."
     "We have reduced our expense levels, especially general and administrative
 expenses, during the first quarter in preparation for the lower volume.  We
 plan to continue operating at lower overall expense levels during this period
 of economic weakness.  We are pleased that our cash position has increased to
 $18 million during the first quarter, primarily the result of collection of
 amounts due from the IRS," Mr. Hren continued.
     "Our outlook for the second quarter and balance of the year is clouded by
 the current uncertain economic situation; however, we expect seasonal revenue
 improvement, together with expense control, to generate improved results for
 the second quarter," concluded Mr. Hren
     Microtest will discuss first quarter results during a conference call at
 11:30 a.m. Eastern time (8:30 a.m. Arizona time) Thursday, April 19, 2001.
 Interested parties may listen to the call, Webcast live at
 http://www.microtest.com/MTST/.  The Webcast will also be archived for one
 week for later listening at the same web address.
 
     About Microtest
     Microtest's purpose is to bring people and information together with
 innovative technology that simplifies evolving networks.  Microtest is a
 leader in network test and measurement products such as OMNIScanner(TM)2,
 PentaScanner(R), CertiFiber(R), and OMNIFiber(TM) and network appliance and
 storage products such as FileZerver(TM), DiscZerver(TM), and LinuxZerver(TM).
 Headquartered in Phoenix, Microtest has international offices in Munich,
 Germany; Crawley, United Kingdom; Beijing, China; Sao Paulo, Brazil;
 Guadalajara, Mexico and Singapore.  Visit Microtest at www.microtest.com.
 
     This press release includes statements, which may constitute
 forward-looking statements made pursuant to the safe harbor provision of the
 Private Securities Litigation Reform Act of 1995.  These statements which are
 typically characterized by words as "expect," "believe," "anticipate," and the
 like (and in this release include references to potential future revenue and
 financial condition), are subject to risks and uncertainties that could cause
 actual results to differ materially from the forward-looking statements.
 Factors which would cause or contribute to such differences include, but are
 not limited to, factors detailed in our Securities and Exchange Commission
 filings, and include risks associated with the highly competitive nature of
 the industries in which we compete, the potential for downturns in economic or
 market conditions in the various regions of the world that we sell our
 products, the effect of fluctuations in foreign currencies, the rapidly
 changing technology environment in which we compete and our ability to
 successfully develop and market products and services on an on-going basis.
 We undertake no obligation to update these statements for revisions or changes
 after the date of this press release.
 
 
                        MICROTEST, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,    December 31,
                                                        2001           2000
                ASSETS                              (unaudited)
     CURRENT ASSETS:
       Cash and cash equivalents                      $17,964        $14,479
       Accounts receivable, net                         7,766          7,977
       Inventories, net                                 2,795          3,372
       Prepaid expenses and other current assets          924            963
       Income taxes receivable                             12          3,533
       Deferred income taxes                              948            805
       Total current assets                            30,409         31,129
 
     PROPERTY AND EQUIPMENT, NET                        1,763          1,764
 
     OTHER ASSETS:
       Capitalized software                               395            546
       Deferred income taxes                            2,149          2,289
       Other                                              366            379
               Total other assets                       2,910          3,214
                                                      $35,082        $36,107
 
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
     CURRENT LIABILITIES:
       Accounts payable                                $2,304         $2,366
       Accrued liabilities                              1,903          1,771
       Accrued payroll and benefits                     1,155          1,618
               Total current liabilities                5,362          5,755
 
     STOCKHOLDERS' EQUITY:
       Preferred stock                                     --             --
       Common stock                                         9              9
       Additional paid-in capital                      35,687         35,666
       Translation gain/loss                              (17)            --
       Accumulated deficit                             (4,741)        (4,105)
                                                       30,938         31,570
       Less:  treasury stock, at cost                  (1,218)        (1,218)
               Total stockholders' equity              29,720         30,352
                                                      $35,082        $36,107
 
 
                        MICROTEST, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
 
                                                        Three months ended,
                                                     March 31,       April 1,
                                                        2001           2000
 
     NET REVENUE                                       $9,597        $11,601
     COST OF REVENUE                                    4,284          4,945
       Gross profit                                     5,313          6,656
 
     OPERATING EXPENSES
       Sales and marketing                              3,156          2,975
       Research and development                         2,144          1,993
       General and administrative                         893          1,368
               Total operating expenses                 6,193          6,336
 
     INCOME (LOSS) FROM OPERATIONS                       (880)           320
 
     OTHER INCOME, NET                                    244            134
 
     INCOME (LOSS) BEFORE INCOME TAXES                   (636)           454
 
     INCOME TAX PROVISION                                  --            (20)
 
     NET INCOME (LOSS)                                  $(636)          $434
 
     Basic earnings (loss) per share                   $(0.07)         $0.05
     Weighted average common shares outstanding
      - basic                                           8,575          8,383
 
     Diluted earnings (loss) per share                 $(0.07)         $0.05
     Weighted average common equivalent shares
      outstanding - diluted                             8,575          9,133
 
 SOURCE  Microtest, Inc.

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