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FOR IMMEDIATE RELEASE
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Contact: Jeff Paletz, President
Choicetel Communications, Inc.
612-544-1260
CHOICETEL COMMUNICATIONS AGREES TO SELL MIDWEST PAYPHONES AND ANNOUNCES 3RD
QUARTER RESULTS
Minneapolis- Choicetel Communications, Inc. (NASDAQ): PHON Announced that it has
entered into an agreement to sell approximately 2,000 of its payphones located
in Minnesota, Wisconsin, Iowa, North Dakota and New York to Access Anywhere LLC
based in Minneapolis. Terms were not disclosed. The transaction is expected to
close in December, following shareholder approval and the satisfaction of other
conditions.
Choicetel Communications also operates payphone routes in Philadelphia, Oregon,
and Puerto Rico, and these phones are not included in the announced transaction.
Jeff Paletz President of Choicetel Communications stated "This sale is another
significant step toward the planned divestiture of payphone assets in order to
enable the company to redeploy its financial and human resources."
Choicetel Communications' third quarter earnings were $26,000 or 1 cent per
share. Income before taxes increased approximately $8,000 or 20% compared to the
three months ended September 30, 1998. The 1999 quarter included a charge of
approximately $110,000 paid to consultants to develop an internet access
terminal business plan. CEO Jeff Paletz stated "though average revenue on a per
phone basis is down from last year, savings in line charges, long distance
expense, and marketing expenses, helped to make up for much of the decline in
revenue."
Total revenue for the nine months ending September 30, 1999 was $8,090,000 an
increase of approximately $1,313,000 or 19.3% compared to the nine months ending
September 30, 1998. The net loss for the first nine months of 1999 is $33,000 or
1 cent per share. This compares to net income of $99,000 or 3 cents per share
for the first nine months of 1998.
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CHOICETEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1999
Three months ended Three months ended % Change
September 30, 1999 September 30, 1998
Revenue 2,936 2,863 2.5%
Cost of service 1,266 1,280 (1.1)
Gross Margin 1,670 1,583 5.5
Selling, general and admin 1,089 939 16.0
Depreciation and Amortization 345 420 (21.7)
Interest 133 126 5.6
Sales tax contingency 55 58 (5.5)
Income (loss) before taxes 48 40 20.0
Provision (credit) for income tax 22 16 37.5
Net income (loss) 26 24 8.3
Per share net income 0.01 0.01
Shares outstanding - weighted avg 2,915 2,915
Per share diluted net income 0.01 0.01
Shares outstanding - diluted 2,915 2,915
Nine months ended Nine months ended %
September 30, 1999 September 30, 1998 Change
Revenue 8,090 6,777 19.3%
Cost of service 3,704 2,886 28.3
Gross Margin 4,386 3,891 12.7
Selling, general and admin 2,865 2,334 22.8
Depreciation and Amortization 1,053 1,001 5.2
Interest 368 199 84.9
Sales tax contingency 159 191 (20.1)
Income (loss) before taxes (59) 165 n.m.
Provision (credit) for income tax (26) 66 n.m.
Net income (loss) (33) 99 n.m.
Per share net income (0.01) 0.03 n.m.
Shares outstanding - weighted avg 2,915 2,915
Per share diluted net income (0.01) 0.03 n.m.
Shares outstanding - diluted 2,915 2,915
FIGURES IN THOUSANDS EXCEPT PER SHARE NUMBERS.
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