EXHIBIT 99.1
FOR IMMEDIATE RELEASE November 10, 1999
CONTACT:
Donald L. Rich, President & CEO (408) 496-0474
Castelle announces third quarter of 1999 results
SANTA CLARA, Calif., November 10, 1999 - CASTELLE (Nasdaq: CSTL) today announced
financial results for the third fiscal quarter ended October 1, 1999. Net sales
were $4.0 million for the three months ended October 1, 1999 versus $5.4 million
in the same period of 1998. The Company reported a net loss of $798,000 or $0.17
per share compared to a net loss of $393,000 or $0.09 per share in the third
quarter of 1998. The results of the third quarter of 1999 include a one-time
restructuring charge of $522,000 or $0.11 per share. The restructuring charge
includes expenses associated with the Company's exit from certain lines of
business, a reduction in the Company's workforce, and expenses related to the
write-off of excess office space. If adjusted to exclude this charge, results of
the third quarter of 1999 would have shown a net loss of $276,000 or $0.06 per
share.
Net sales for the first nine months of 1999 were $12.2 million compared with
$18.1 million for the same period of 1998. Net loss for the nine-month period
was $3,669,000 or $0.80 per share compared to a net loss of $1,135,000 or $0.25
per share for the 1998 period. Excluding the above-mentioned one-time charge of
$522,000 and the excess inventory provision of $1,248,000 in the first nine
months of 1999, the net loss for the first nine months of 1999 would have shown
a net loss of $1,899,000 or $0.42 per share. The net losses reflect the
continuing decline in print server sales, primarily due to the business
conditions in the Asia Pacific region, and the decline in shipments to
distributors to support the Company's continued effort to manage down inventory
levels in the distribution channel. The cash balance increased to $4.3 million
at the end of the third quarter of 1999 from $3.9 million at the end of the
fourth quarter of 1998 and days sales outstanding improved to 41 days at October
1, 1999 from 87 days at the end of 1998.
Donald L. Rich, President and CEO, stated: "Over the course of the past year we
have implemented cost reduction programs resulting in lower operating expenses
and higher margins. We continue to develop new products and by the end of this
year will have replaced our entire Fax Server product line with new enhanced
hardware models and software releases. We believe we are well positioned and our
objective is to turn the corner and achieve profitability in the upcoming fourth
quarter of 1999."
Founded in 1987, Castelle is an industry leader and pioneer of network fax and
print servers that increase productivity in workgroups and the enterprise.
Castelle products are available through a worldwide network of distributors and
Value Added Resellers. Castelle is headquartered in Santa Clara, Calif. and can
be reached at 1-800-289-7555; (408) 496-0474; or www.castelle.com.
This press release contains forward-looking statements that involve risks and
uncertainties, relating to the future events, including the Company's objective
to achieve profitability in the fourth quarter of 1999, the timing of the
replacement of the Company's Fax Server product line with new enhanced hardware
models and software releases and the effect of improved business conditions in
the Asia Pacific Region on the Company's results of their print server sales.
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, 1998.
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