Exhibit 99.1
FOR IMMEDIATE RELEASE April 27, 2000
CONTACT: Donald L. Rich, President & CEO 408-496-0474
Castelle Reports First Quarter 2000 Results: Positive $0.03 EPS
SANTA CLARA, Calif., April 27, 2000 - CASTELLE (Nasdaq: CSTL) today announced
financial results for the first fiscal quarter ended March 31, 2000.
Net sales for the first quarter of 2000 were $4.1 million, compared to $4.5
million for the same period in 1999. This compares to net sales in the fourth
quarter of 1999 of $3.9 million, an increase of 5.3%.
The Company recorded net income for the first quarter of 2000 of $168,000 or
earnings of $0.03 per share, on a fully diluted basis, compared to a net loss of
$1.4 million or a loss of $0.33 per share for the same period in 1999. This
compares to net income in the fourth quarter of 1999 of $114,000 or earnings of
$0.02 per share, an improvement in earnings of 47%.
The loss in the first quarter of 1999 included an $880,000 reserve primarily for
excess inventory related to the print server product line. Excluding the
additional inventory reserve, the net loss for the period would have been
$531,000, or $0.12 per share.
Donald L. Rich, President and CEO, stated, "We have sustained two quarters of
profitability which were supported by the introduction of an enhanced Fax Server
product line with improved gross margins, the implementation of cost reduction
programs and controlled operating expenses. Our cash flow and balance sheet have
continued to improve in the first quarter of 2000. We have adjusted inventory
levels to match customer demand, decreased the average Days Sales Outstanding to
31 and brought current our accounts payable, while maintaining a cash balance of
$4.4 million as of March 31, 2000. Castelle's new cost structure and sales
channel strategy have allowed the Company to better compete in its current
markets. We are committed to broadening our market opportunity by developing and
introducing additional server appliance products in future quarters."
About Castelle
Founded in 1987, Castelle develops server appliances providing office messaging
solutions and other shared services. The company pioneered server appliances,
establishing a benchmark for "plug and play" and ease-of-use with its fax and
print server product families. Castelle products are installed in the majority
of Fortune 1000 companies and in small and medium-sized business worldwide and
are available through a worldwide network of distributors, value-added
resellers, e-commerce retailers, and systems integrators. Castelle is
headquartered in Santa Clara and can be reached at 408-496-0474, fax
408-496-0502 or www.castelle.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and
uncertainties, relating to the future events, including the effect of the
Company's cost structure on its business going forward and the ability of the
Company to continue to (i) develop and introduce new products, (ii) be
profitable, (iii) control operating expenses, (iv) maintain proper inventory
levels, and (iv) keep accounts payable current. Actual events or the Company's
results may differ materially from the events or results discussed in the
forward-looking statements for a number of reasons including, without
limitation, the timely development, acceptance and pricing of new products and
the general economic conditions as they affect the Company's customers. The
Company assumes no obligation to update the forward-looking information.
Investors are referred to the full discussion of risks and uncertainties
associated with forward-looking statements contained in the Company's 10-K for
the fiscal year ended December 31, 1999.
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