Teltronics Announces Second Quarter Results

PALMETTO, Fla., Aug. 17 /PRNewswire-FirstCall/ -- On August 16, 2010, Teltronics, Inc. (OTC Bulletin Board: TELT) announced its financial results for the three months and six months ended June 30th, 2010.  

The second quarter results were significantly down from the same period of 2009.  This was due in large part to a reduction in orders from one of our largest customers.  Teltronics is one of four vendors to this customer.  Last year Teltronics received a higher percentage in comparison to the other vendors of the orders for our 20-20 switching platform than we did this year.  These were installed during the second and third quarters of 2009.  Although there is a significant reduction in orders this year, scheduled deliveries of this year's orders are expected to take place during the third quarter.  This customer continues to purchase from Teltronics and Teltronics has long term maintenance and support contracts with this customer.

Teltronics also recorded onetime costs and accruals in the second quarter amounting to $1.9 million.

Due to the current temporary down turn in business Teltronics also took the decision to further reduce the work force and cut an additional $1.5 million from its payroll. These annualized savings will come into effect from the middle of August.

Teltronics recognizes that it must diversify on being reliant on a number of large customers. To this end the Company has embarked on developing new products that will be sold through a distribution and reseller channel.  The first of these products, a SIP-based communication server, the Cerato™ VCSe 100, supporting 128 SIP extensions, will be released to a limited number of dealers in August 2010.  If these tests are successful Teltronics will then release the product for general availability.

Teltronics continues to invest in R&D and will be launching another new product early in 2011 that will also be sold through a distribution and reseller channel. We continue to successfully sell directly to our legacy customers domestically and internationally through our international distribution channel.

Sales for the three months ended June 30, 2010 were $6.2 million, as compared to $11.7 million reported for the same period in 2009.  Sales for the six months ended June 30, 2010 were $12.4 million, as compared to $21.4 million for the same period in 2009.  Gross profit margin for the three months ended June 30, 2010 was 29.0% as compared to 43.2% for the same period in 2009.  Gross profit margin for the six months ended June 30, 2010 was 37.6%, as compared to 40.0% for the same period in 2009.

Operating expenses for the three months ended June 30, 2010 were $2.7 million, as compared to $2.5 million for the same period in 2009.  Operating expenses for the six months ended June 30, 2010 were $5.7 million, as compared to $5.1 million for the same period in 2009.

Net loss for the three months ended June 30, 2010 was $3.0 million or $(0.37) per fully diluted share, as compared to a profit of $2.2 million or $0.20 per fully diluted share, for the same period in 2009.  Net loss for the six months ended June 30, 2010 was $3.3 million or $(0.44) per fully diluted share, as compared to a net profit of $2.7 million or $0.25 per fully diluted share, for the same period in 2009.

Net loss available to common shareholders for the three months ended June 30, 2010 was $3.2 million, as compared to a net profit of $1.9 million for the same period in 2009.  Net loss available to common shareholders for the six months ended June 30, 2010 was $3.9 million as compared to a net profit of $2.2 million for the same period in 2009.

About Teltronics:

Teltronics is a technology manufacturer specializing in communications, alarms management and contract manufacturing in our ISO 9000:2008 certified factory.  Within each business area we actively engage our customers and partners to deliver the highest levels of reliability, customer service and value in support of their unique business needs.  We empower our employees to do all that is required to maintain 100% customer satisfaction, encouraging ongoing contributions and continued personal development.  In Teltronics 40 year history, we have consistently built strong products and solutions for the markets we serve, established deep roots in the community and support environmentally safe practices with ideas that communicate.  Further information regarding Teltronics is available at the website, www.teltronics.com.

A number of statements contained in this press release are forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements can generally be identified as such because the context of the statement will include words such as we "believe," "anticipate," "expect," or words of similar import.  Similarly, statements that describe our future plans, objectives, strategies or goals are also forward-looking statements.  These forward-looking statements involve a number of risks and uncertainties that may materially adversely affect the anticipated results.  Such risks and uncertainties include, but are not limited to, the timely development and market acceptance of products and technologies, competitive market conditions, payment of the consideration under our acquisition agreements, successful integration of acquisitions and the failure to realize the expected benefits of such acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses ,the ability to make payments under our outstanding indebtedness, the ability to pay dividends on our preferred stock, risks relating to foreign currency translations, and other factors described in the Company's filings with the Securities and Exchange Commission. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements.  The forward-looking statements made herein are only made as of the date of this press release and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

SOURCE Teltronics, Inc.