eLEC Communications Reports Fourth Quarter and Year-End Results
Including Year-Over-Year Sales Growth of 233%
Norwalk, CT.... February 28, 2001 --- eLEC Communications Corp. (NASDAQ: ELEC),
a provider of integrated communications services to business customers, today
announced the results of its operations for the fourth quarter and year ended
November 30, 2000.
eLEC reported revenues for fiscal 2000 of $13,876,965, an increase of 233% over
reported revenues of $4,170,031 in fiscal 1999. Reported revenues for the fourth
quarter increased eight percent sequentially to $4,416,025 compared with
$4,078,312 in the third quarter.
eLEC also reported a net loss for fiscal 2000 of ($5,374,146), or ($0.41) per
share, as compared to a net loss in fiscal 1999 of ($7,505,553), or ($0.86) per
share. The net loss from continuing operations amounted to ($6,350,770), or
($0.48) per share, as compared to ($3,562,488), or ($0.41) in fiscal 1999. Both
fiscal years include non-cash losses in equity investments amounting to $605,553
in fiscal 2000 and $1,661,630 in fiscal 1999. A one-time non-cash loss in the
amount of $1,105,626 was also recognized in fiscal 2000 for the impairment in
value of an equity investment.
Paul Riss, eLEC's CEO, stated, "We are very pleased with our year-over-year
accomplishments, highlighted by our strong revenue growth and the expansion into
nine states with local access service under the unbundled network elements
platform ("UNE-P"). In today's business climate, execution is more important
than ever, and our accomplishments in fiscal 2000 in developing our back office
systems, executing interconnection agreements in 48 states and provisioning DSL
in an extremely cost efficient manner, demonstrate the significant progress we
have made. Given the current conditions in the capital markets, which directly
impact the value of our marketable securities, we believe our fiscal 2001 will
be characterized by stabilized growth, increased average revenue per line and
reaching profitability as soon as possible. To accomplish these goals, our
management team is focused on leveraging our proprietary technology that allows
us to electronically provision and rate local access lines to further penetrate
existing markets that contain multi-location businesses. We will also use our
internal telemarketing capability to upsell existing customers for new features
and services. Our full suite of bundled telecommunications services and our
ability to provide one invoice for multi-location and multi-state businesses,
combined with the ubiquitous reach of UNE-P, continues to be a valuable service
that we are fully prepared to build upon in 2001."
eLEC Communications Corp. is a publicly-traded local telecommunications company
that is taking advantage of the convergence of the current and future
competitive technological and regulatory developments in the Internet and
telecommunications markets. eLEC provides an integrated suite of communications
services to small and medium-sized business customers, including local, long
distance, dial-up access, dedicated access, xDSL, and Web site design and
hosting.
eLEC Communications Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Year Ended
Nov. 30, 2000 Nov. 30, 1999
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Revenues $ 13,876,965 $ 4,170,031
Cost of revenues 10,071,536 3,002,698
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Gross profit 3,805,429 1,167,333
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Costs and expenses:
Selling and general and administrative 9,014,653 2,741,264
Depreciation and amortization 765,641 330,054
Equity in loss of investee 605,553 1,661,630
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Total costs and expenses 10,385,847 4,732,948
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Loss from operations (6,580,418) (3,565,615)
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Other income (expense):
Interest expense (127,309) (15,419)
Interest income 40,541 18,546
Gain on sale of investment securities 1,422,042 --
Loss from impairment of investments (1,105,626) --
------------ ------------
Total other income (expense) 229,648 3,127
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Loss from continuing operations (6,350,770) (3,562,488)
------------ ------------
Discontinued operations:
Gain (loss) on disposal of discontinued
operations 976,624 (3,943,065)
------------ ------------
Net loss $ (5,374,146) ($ 7,505,553)
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Basic and diluted income (loss) per share
Continuing operations ($ 0.48) ($ 0.41)
Discontinued operations 0.07 ( 0.45)
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Net loss ($ 0.41) ($ 0.86)
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Weighted average number of common shares
outstanding 13,206,506 8,717,554
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This release contains forward-looking statements that involve risks and
uncertainties. eLEC's actual results may differ materially from the results
discussed in the forward-looking statements. Factors that might cause such a
difference include, among others, availability of management; availability,
terms, and deployment of capital; eLEC's ability to successfully market its
services to current and new customers, generate customer demand for its product
and services in the geographical areas in which eLEC can operate, access new
markets, negotiate and maintain suitable interconnection agreements with the
incumbent local exchange carriers, and negotiate and maintain suitable vendor
relationships, all in a timely manner, at reasonable cost and on satisfactory
terms and conditions, as well as regulatory, legislative and judicial
developments that could cause actual results to vary in such forward-looking
statements.