T-NETIX, Inc. Reports Fourth Quarter and Year End 2000 Results

Company Exceeds $100 Million Annual Revenue Target, Records Operating Profit

In Second Half



Apr 19, 2001, 01:00 ET from T-NETIX, Inc.

    ENGLEWOOD, Colo., April 19 /PRNewswire/ -- T-NETIX, Inc. (Nasdaq:   TNTX), a
 leading provider of specialized call processing and fraud control software
 technologies and the nation's largest provider of corrections-related
 telecommunications services, announced today fourth quarter and year end 2000
 results.
     For the year ended December 31, 2000, the company reported total revenue
 of $103.3 million, an increase of 41% compared with $73.2 million in 1999.
 The company incurred a net loss of $1.6 million (inclusive of accretion and
 conversion charges related to redeemable convertible preferred stock of
 approximately $1.3 million) compared with year 1999 losses of $10.2 million.
 Year 2000 losses on a fully diluted basis were $0.13 per share, compared with
 $0.82 per share in 1999.
     For fourth quarter 2000, total revenues were $27.9 million compared with
 $20.9 million for the same period in 1999, reflecting increases from its
 Internet Services Division and its Corrections Division.  The company reported
 its second consecutive profitable quarter for the fourth quarter, with net
 income of $109,000 or $0.01 per share compared with a net loss of $1.2 million
 or $0.10 per share (fully diluted) for the fourth quarter 1999.
     "We were very pleased to have met our revenue goal for the year and to
 have finished with a profitable second half," said Tom Larkin, President and
 CEO.  "It was especially gratifying to have performed well in the fourth
 quarter, when the downturn in the economy during December began to affect so
 many businesses.  It was and continues to be a very challenging environment
 for most businesses, but we continue to make considerable progress in
 expanding our role as the information and communications provider for the
 corrections industry.  We also moved from an operating loss in 1999 to
 positive operating income in 2000, with significant improvement in the second
 half of the year."
     For the year, T-NETIX reported operating income of $2.0 million compared
 with an operating loss of $8.2 million in 1999.  In the second half of 2000,
 the company recorded operating income of  $3.4 million, which was partially
 offset by operating losses in the first two quarters of the year.  The company
 had higher expenses than last year as it continued to invest heavily in new
 product development, marketing, and sales to support growth in its Corrections
 Division.  Expenses for its Internet services business were sharply higher,
 but proportionate to growth in revenues from this business.
     Revenue from corrections communications services increased 31% in 2000 to
 $51.4 million, compared with 1999, partially reflecting the effect of new
 revenue sharing contracts.  T-NETIX's reduction of costs and generation of
 additional volume enables the company to participate in a greater portion of
 the revenues generated by corrections communications.  Sales, general and
 administrative expenses rose to $19.7 million in 2000, versus $13.8 million in
 1999, but remained constant as a percentage of revenue at 19%.
     The company also announced that in April 2001, it received from its
 commercial lender a one-year extension on a $30 million senior secured
 revolving credit facility, with a new maturity date of March 31, 2002.
     Larkin concluded, "We continue to work to deliver value to our
 shareholders by moving toward our financial goals.  We have a great deal of
 work ahead us, but we believe we have a workable strategy that will enable us
 to further leverage our capabilities and our position as the leader in
 correctional communications."
 
     About T-NETIX, Inc.
     Based in Englewood, Colorado, T-NETIX provides specialized call processing
 and billing services for correctional institutions to the telecommunications
 industry, direct local and long distance call processing for correctional
 facilities, value-added telecommunications services such as pre-connection
 restrictions, digital recording, jail and inmate management systems, video
 booking, and sales of call-processing systems hardware.  T-NETIX, through its
 Contain(R) product, provides parolee and home detention monitoring services
 using Internet and voice verification technology, including its SpeakEZ Voice
 Print(R) technology.  The company serves more than 1,600 facilities and
 justice departments nationwide.  For news and information, visit the company's
 web site at www.T-NETIX.com .
 
     Forward Looking Statements
     Except for historical information contained herein, the statements in this
 release are forward-looking and made pursuant to the safe harbor provisions of
 the Private Securities Litigation Reform Act of 1995.  Forward-looking
 statements involve known and unknown risks and uncertainties, which may cause
 the company's actual results in future periods to differ materially from
 forecasted or expected results.  Those risks include, among other things, the
 competitive environment in the industry in general and in the company's
 specific market areas, inflation, changes in costs of goods and services and
 economic conditions in general and in the company's specific market area.
 Those and other risks are more fully described in the company's filings with
 the Securities and Exchange Commission.
 
 
                           T-NETIX, INC. AND SUBSIDIARIES
 
                       CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
                                                  Year Ended December 31,
                                                2000        1999         1998
                                               (Amounts in Thousands, Except
                                                     Per Share Amounts)
 
     Revenue:
       Telecommunications services            $51,375      $39,274     $43,089
       Direct call provisioning                28,103       27,517      22,736
       Internet services                       21,401        1,546          _
       Equipment sales and other                2,424        4,898       2,416
               Total revenue                  103,303       73,235      68,241
     Expenses:
       Operating costs:
          Telecommunications services          21,293       17,674      17,014
          Direct call provisioning             24,519       25,032      20,048
          Internet services                    16,610        1,442          _
          Cost of equipment sold and other        914        2,173         848
               Total operating costs           63,336       46,321      37,910
       Selling, general and administrative     19,717       13,794      13,401
       Research and development                 5,751        5,078       3,936
       Impairment of telecommunications
        assets                                     _        4,632          _
       Depreciation and amortization           12,454       11,620      10,174
               Total expenses                 101,258       81,445      65,421
               Operating income (loss)          2,045       (8,210)      2,820
     Merger transaction expenses                   _       (1,017)         _
     Interest and other expense                (2,413)      (2,137)     (2,354)
               Income (loss) before
               income taxes                      (368)     (11,364)        466
     Income tax benefit (expense) (note 7)         _       (1,117)       (196)
               Net income (loss)                 (368)     (10,247)        270
     Accretion of discount on redeemable
       convertible  preferred stock             1,095           _          _
     Charge for conversion of  redeemable
        convertible preferred stock               167           _          _
     Net income (loss) applicable to
      common stockholders                     $(1,630)    $(10,247)       $270
     Basic income (loss) per common share      $(0.13)      $(0.82)      $0.02
     Diluted  income (loss) per common
      share                                    $(0.13)      $(0.82)      $0.02
     Shares used in computing basic income
        (loss) per common share                12,801       12,511      12,172
     Shares used in computing diluted income
        (loss) per common share                12,801       12,511      12,930
 
 
 
                           T-NETIX, INC. AND SUBSIDIARIES
 
                            CONSOLIDATED BALANCE SHEETS
 
 
                                                            December 31,
                                                       2000              1999
                                                       (Amounts in Thousands)
                                       ASSETS
 
     Cash and cash equivalents                          $102              $118
     Accounts receivable, net                         18,268            16,459
     Prepaid expenses                                  1,212             1,038
     Inventories                                         764               710
               Total current assets                   20,346            18,325
     Property and equipment, net                      34,821            33,858
     Goodwill, net                                     5,557             6,401
     Deferred tax asset                                2,297             2,297
     Intangible and other assets, net                  8,474             9,252
               Total assets                          $71,495           $70,133
 
 
 
                       LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Liabilities:
       Accounts payable                              $8,654           $13,187
       Accrued liabilities                            5,781             5,924
       Current portion of long-term debt              1,848             7,366
 
               Total current liabilities             16,283            26,477
       Long-term debt                                26,063            33,858
       Subordinated note payable                      3,750                _
               Total liabilities                     46,096            48,032
 
     Series A redeemable convertible
      preferred stock, $1,000 per share, stated
      value, 3,750 shares authorized; 3,250
      issued and outstanding at
      December 31, 2000; liquidation
      preference of $3,434,000 at
      December 31, 2000                               2,173                  _
 
      Stockholders' equity (note 5):
     Common stock, $.01 stated value,
      70,000,000 shares
          authorized; 13,228,872 and
           12,699,400 shares issued and
          outstanding at December 31, 2000
           and 1999, respectively                       132               127
       Additional paid-in capital                    38,541            35,791
       Accumulated deficit                          (15,447)          (13,817)
               Total stockholders' equity            23,226            22,101
     Commitments and contingencies
      (note 10)
     Total liabilities and stockholders'
      equity                                        $71,495           $70,133
 
 

SOURCE T-NETIX, Inc.
    ENGLEWOOD, Colo., April 19 /PRNewswire/ -- T-NETIX, Inc. (Nasdaq:   TNTX), a
 leading provider of specialized call processing and fraud control software
 technologies and the nation's largest provider of corrections-related
 telecommunications services, announced today fourth quarter and year end 2000
 results.
     For the year ended December 31, 2000, the company reported total revenue
 of $103.3 million, an increase of 41% compared with $73.2 million in 1999.
 The company incurred a net loss of $1.6 million (inclusive of accretion and
 conversion charges related to redeemable convertible preferred stock of
 approximately $1.3 million) compared with year 1999 losses of $10.2 million.
 Year 2000 losses on a fully diluted basis were $0.13 per share, compared with
 $0.82 per share in 1999.
     For fourth quarter 2000, total revenues were $27.9 million compared with
 $20.9 million for the same period in 1999, reflecting increases from its
 Internet Services Division and its Corrections Division.  The company reported
 its second consecutive profitable quarter for the fourth quarter, with net
 income of $109,000 or $0.01 per share compared with a net loss of $1.2 million
 or $0.10 per share (fully diluted) for the fourth quarter 1999.
     "We were very pleased to have met our revenue goal for the year and to
 have finished with a profitable second half," said Tom Larkin, President and
 CEO.  "It was especially gratifying to have performed well in the fourth
 quarter, when the downturn in the economy during December began to affect so
 many businesses.  It was and continues to be a very challenging environment
 for most businesses, but we continue to make considerable progress in
 expanding our role as the information and communications provider for the
 corrections industry.  We also moved from an operating loss in 1999 to
 positive operating income in 2000, with significant improvement in the second
 half of the year."
     For the year, T-NETIX reported operating income of $2.0 million compared
 with an operating loss of $8.2 million in 1999.  In the second half of 2000,
 the company recorded operating income of  $3.4 million, which was partially
 offset by operating losses in the first two quarters of the year.  The company
 had higher expenses than last year as it continued to invest heavily in new
 product development, marketing, and sales to support growth in its Corrections
 Division.  Expenses for its Internet services business were sharply higher,
 but proportionate to growth in revenues from this business.
     Revenue from corrections communications services increased 31% in 2000 to
 $51.4 million, compared with 1999, partially reflecting the effect of new
 revenue sharing contracts.  T-NETIX's reduction of costs and generation of
 additional volume enables the company to participate in a greater portion of
 the revenues generated by corrections communications.  Sales, general and
 administrative expenses rose to $19.7 million in 2000, versus $13.8 million in
 1999, but remained constant as a percentage of revenue at 19%.
     The company also announced that in April 2001, it received from its
 commercial lender a one-year extension on a $30 million senior secured
 revolving credit facility, with a new maturity date of March 31, 2002.
     Larkin concluded, "We continue to work to deliver value to our
 shareholders by moving toward our financial goals.  We have a great deal of
 work ahead us, but we believe we have a workable strategy that will enable us
 to further leverage our capabilities and our position as the leader in
 correctional communications."
 
     About T-NETIX, Inc.
     Based in Englewood, Colorado, T-NETIX provides specialized call processing
 and billing services for correctional institutions to the telecommunications
 industry, direct local and long distance call processing for correctional
 facilities, value-added telecommunications services such as pre-connection
 restrictions, digital recording, jail and inmate management systems, video
 booking, and sales of call-processing systems hardware.  T-NETIX, through its
 Contain(R) product, provides parolee and home detention monitoring services
 using Internet and voice verification technology, including its SpeakEZ Voice
 Print(R) technology.  The company serves more than 1,600 facilities and
 justice departments nationwide.  For news and information, visit the company's
 web site at www.T-NETIX.com .
 
     Forward Looking Statements
     Except for historical information contained herein, the statements in this
 release are forward-looking and made pursuant to the safe harbor provisions of
 the Private Securities Litigation Reform Act of 1995.  Forward-looking
 statements involve known and unknown risks and uncertainties, which may cause
 the company's actual results in future periods to differ materially from
 forecasted or expected results.  Those risks include, among other things, the
 competitive environment in the industry in general and in the company's
 specific market areas, inflation, changes in costs of goods and services and
 economic conditions in general and in the company's specific market area.
 Those and other risks are more fully described in the company's filings with
 the Securities and Exchange Commission.
 
 
                           T-NETIX, INC. AND SUBSIDIARIES
 
                       CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
                                                  Year Ended December 31,
                                                2000        1999         1998
                                               (Amounts in Thousands, Except
                                                     Per Share Amounts)
 
     Revenue:
       Telecommunications services            $51,375      $39,274     $43,089
       Direct call provisioning                28,103       27,517      22,736
       Internet services                       21,401        1,546          _
       Equipment sales and other                2,424        4,898       2,416
               Total revenue                  103,303       73,235      68,241
     Expenses:
       Operating costs:
          Telecommunications services          21,293       17,674      17,014
          Direct call provisioning             24,519       25,032      20,048
          Internet services                    16,610        1,442          _
          Cost of equipment sold and other        914        2,173         848
               Total operating costs           63,336       46,321      37,910
       Selling, general and administrative     19,717       13,794      13,401
       Research and development                 5,751        5,078       3,936
       Impairment of telecommunications
        assets                                     _        4,632          _
       Depreciation and amortization           12,454       11,620      10,174
               Total expenses                 101,258       81,445      65,421
               Operating income (loss)          2,045       (8,210)      2,820
     Merger transaction expenses                   _       (1,017)         _
     Interest and other expense                (2,413)      (2,137)     (2,354)
               Income (loss) before
               income taxes                      (368)     (11,364)        466
     Income tax benefit (expense) (note 7)         _       (1,117)       (196)
               Net income (loss)                 (368)     (10,247)        270
     Accretion of discount on redeemable
       convertible  preferred stock             1,095           _          _
     Charge for conversion of  redeemable
        convertible preferred stock               167           _          _
     Net income (loss) applicable to
      common stockholders                     $(1,630)    $(10,247)       $270
     Basic income (loss) per common share      $(0.13)      $(0.82)      $0.02
     Diluted  income (loss) per common
      share                                    $(0.13)      $(0.82)      $0.02
     Shares used in computing basic income
        (loss) per common share                12,801       12,511      12,172
     Shares used in computing diluted income
        (loss) per common share                12,801       12,511      12,930
 
 
 
                           T-NETIX, INC. AND SUBSIDIARIES
 
                            CONSOLIDATED BALANCE SHEETS
 
 
                                                            December 31,
                                                       2000              1999
                                                       (Amounts in Thousands)
                                       ASSETS
 
     Cash and cash equivalents                          $102              $118
     Accounts receivable, net                         18,268            16,459
     Prepaid expenses                                  1,212             1,038
     Inventories                                         764               710
               Total current assets                   20,346            18,325
     Property and equipment, net                      34,821            33,858
     Goodwill, net                                     5,557             6,401
     Deferred tax asset                                2,297             2,297
     Intangible and other assets, net                  8,474             9,252
               Total assets                          $71,495           $70,133
 
 
 
                       LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Liabilities:
       Accounts payable                              $8,654           $13,187
       Accrued liabilities                            5,781             5,924
       Current portion of long-term debt              1,848             7,366
 
               Total current liabilities             16,283            26,477
       Long-term debt                                26,063            33,858
       Subordinated note payable                      3,750                _
               Total liabilities                     46,096            48,032
 
     Series A redeemable convertible
      preferred stock, $1,000 per share, stated
      value, 3,750 shares authorized; 3,250
      issued and outstanding at
      December 31, 2000; liquidation
      preference of $3,434,000 at
      December 31, 2000                               2,173                  _
 
      Stockholders' equity (note 5):
     Common stock, $.01 stated value,
      70,000,000 shares
          authorized; 13,228,872 and
           12,699,400 shares issued and
          outstanding at December 31, 2000
           and 1999, respectively                       132               127
       Additional paid-in capital                    38,541            35,791
       Accumulated deficit                          (15,447)          (13,817)
               Total stockholders' equity            23,226            22,101
     Commitments and contingencies
      (note 10)
     Total liabilities and stockholders'
      equity                                        $71,495           $70,133
 
 SOURCE  T-NETIX, Inc.