EXHIBIT 99
PRELIMINARY RESULTS FOR THE YEAR ENDED JUNE 30, 2000
EuroTelecom Communications, Inc. (Trading Symbol-EUTC; Class A Common Stock
quoted on the Alternative Investment Market of the London Stock Exchange as
ETMA), whose `application linking' technology is used to create the
communications backbone for intelligent buildings, today announced preliminary
results for the year ending June 30, 2000.
KEY FINANCIAL POINTS (PRELIMINARY FIGURES):
Year Ended Six months ended
--------------------------------------------
30 JUNE 2000 30 JUNE 1999
$'000 $'000
Revenues 9,738 1,323
Gross Profit 2,180 520
Loss from operations (7,179) (1,283)
HIGHLIGHTS:
o Successfully delivered the U.K. conference facilities project, `Q.ton
Forum'
o `The Printworks' entertainment center in Manchester in the U.K. is
proceeding on schedule and use of the Company's service is exceeding
expectations.
o A projects group office has been established in Stratford, U.K., to
coordinate design, implementation and performance of major projects.
o Expansion of management control center in South Yorkshire.
o The Company is continuing its policy of recruiting quality personnel
from market leading organisations.
PHIL DERRY, EUROTELECOM'S CHIEF EXECUTIVE COMMENTED:
"WE HAVE MADE A SOLID START TO THE CURRENT FINANCIAL YEAR AND WILL CONTINUE TO
IMPLEMENT A NUMBER OF MEASURES WHICH POSITION EUROTELECOM AS A GROWTH BUSINESS.
INTEREST IN THE COMPANY CONTINUES TO BE HIGH AND WE CURRENTLY SHOW A HEALTHY NEW
ORDER BOOK MOVING FORWARD."
This press release contains forward-looking statements. Such statements are
based on the current expectations and beliefs of the management of EuroTelecom
Communications, Inc. and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those described in the
forward-looking statements.
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CHAIRMAN'S STATEMENT
INTRODUCTION
EuroTelecom Communications, Inc. is pleased to announce the first annual results
since the Company was admitted to AIM on April 5, 2000. In addition, we have
successfully delivered the conference facilities project, `Q.ton Forum', and the
entertainment center `The Printworks', our Manchester based installation, is
proceeding on schedule and the take up of our services there is exceeding
expectations.
The Company has filed with the Securities and Exchange Commission ("SEC") an
amendment to its registration statement on Form 10-SB in respect of its U.S.
Common Stock. The Company's Common Stock will not be eligible for quotation on
the OTC Bulletin Board until such time as the SEC accepts the Company's 10-SB
registration statement as complying with relevant regulations. Such approval has
not yet been obtained. The Company's shares of Common Stock currently trade on
the Pink Sheets, a paper quotation system of the National Quotation Bureau, LLC
which reports trades in the U.S. "over-the-counter" securities market.
DEVELOPMENT
Our growth is underpinned by the recruitment of key high quality staff from
market leading organizations. We also have made a number of key strategic
acquisitions to support our core business of Intelligent Buildings and
Application Linking solutions. Our investment in resource and assets has been
accelerated to insure we are placed to capture the maximum opportunity from our
current inquiries/order book. The level of these inquires remains at a high
level. We have focused on developing the infrastructure necessary to support the
success of our approach to strategic alliances with key partners.
In the U.K., a Projects Group Office has recently been established in Stratford
to co-ordinate the design, implementation and performance of major projects.
Similarly, a research and development facility now operates from offices in
Stourbridge and provides a fully operational demonstration facility for our
Intelligent Building services. A new management control centre for remote
monitoring and crisis response services is currently being commissioned at our
corporate office in Manvers, South Yorkshire, U.K. Our subsidiary, EuroTelecom
Connect and easy/IP have now taken joint occupation of premises at Newark,
Nottinghamshire, U.K.
FUTURE OUTLOOK
Our facilities management group has secured the contract to deliver services to
Jarvis plc, a U.K. public company, at the Army Foundation College, Harrogate,
and we expect to extend this to embrace the Communications and Technology for
the new college. Alongside this we have established a joint venture, called
Defining Moments, to bring further core services to the Education Sector Market.
We are achieving delivery of our projected contracts whilst controlling
accelerated growth necessary to position the Company to look forward with
confidence in 2001 and beyond. EuroTelecom's key strengths allow us to help
deliver increased profitability to our customers using our technology. The
strategy is now clearly defined and the business is backed by excellent
technical and commercial skills. I have every confidence that our management
team will deliver a marked improvement in sales and profitability in the current
financial year.
CHRIS AKERS
12 OCTOBER 2000
CHAIRMAN
5
EUROTELECOM COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------------------
JUNE 30,
2000
(IN THOUSANDS)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $12,114
Accounts receivable, net of provision for doubtful accounts of $8,000 2,869
Inventories 898
Unearned compensation 170
Prepaid expenses and other current assets 1,792
Costs and estimated earnings in excess of billings on uncompleted contracts 2,323
--------
TOTAL CURRENT ASSETS 20,166
--------
NON-CURRENT ASSETS
Property, plant and equipment, net of accumulated depreciation of $263,000 2,374
Goodwill, net of accumulated amortization of $138,000 1,051
Investment in affiliated company 2,560
--------
TOTAL NON-CURRENT ASSETS 5,985
--------
TOTAL ASSETS $26,151
========
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EUROTELECOM COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEET (CONTINUED)
- ------------------------------------------------------------------------------------------
JUNE 30,
2000
(IN THOUSANDS)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank line of credit $ 168
Accounts payable 2,827
Accrued liabilities 1,150
Other current liabilities 153
Other taxes payable 627
Current maturities of long-term obligations 55
---------
TOTAL CURRENT LIABILITIES 4,980
---------
NON-CURRENT LIABILITIES
Notes payable 149
Less: current maturities of long-term obligations (55)
---------
TOTAL NON-CURRENT LIABILITIES 94
---------
TOTAL LIABILITIES 5,074
---------
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.01, 10,000,000 authorized, none issued - 'A'
common stock shares $0.01 par value, authorized
50,000,000; 12,055,118 issued and outstanding 120
Common stock, $0.01 par value, 50,000,000 authorized shares;
17,946,222 issued and outstanding 180
Additional paid in capital 51,801
Accumulated deficit (31,148)
Accumulated other comprehensive income 124
---------
TOTAL STOCKHOLDERS' EQUITY 21,077
---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 26,151
=========
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EUROTELECOM COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------------------
YEAR ENDED SIX MONTHS YEAR ENDED
JUNE 30, JUNE 30, DECEMBER 31,
2000 1999 1998
(IN ($) THOUSANDS, EXCEPT LOSS PER SHARE)
REVENUES 9,738 1,323 64
Cost of revenues 7,558 803 -
------------- ------------- -------------
GROSS PROFIT 2,180 520 64
Selling, general and administrative
expenses (9,015) (1,639) (1,174)
Depreciation and amortization (319) (40) (23)
Loss from closed subsidiary - (124) (292)
------------- ------------- -------------
LOSS FROM OPERATIONS (7,154) (1,283) (1,425)
Share of loss from affiliated company (76) - -
Interest income (expense), net 161 (35) (54)
Loan stock beneficial conversion expense - (919) -
------------- ------------- -------------
LOSS BEFORE INCOME TAX (7,069) (2,237) (1,479)
Income taxes - - -
------------- ------------- -------------
NET LOSS $ (7,069) $ (2,237) $ (1,479)
============= ============= =============
Loss per share
Basic and diluted $ (0.37) $ (0.29) $ (0.26)
============= ============= =============
Weighted average number of common shares 19,097,390 7,748,049 5,777,816
============= ============= =============
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EUROTELECOM COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, JUNE 30, DECEMBER 31,
2000 1999 1998
(IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(7,069) $(2,237) $(1,479)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
USED IN OPERATING ACTIVITIES
Depreciation and amortization 319 40 23
Stock issued for services 773 463 544
Amortization of unearned compensation 80 - -
Share of loss of affiliate 76 - -
Loan stock beneficial conversion - 919 -
Provision against investment 44 - -
CHANGES IN ASSETS AND LIABILITIES, NET OF EFFECTS
FROM PURCHASE OF EASY IP
Accounts payable 2,074 (138) (338)
Accrued liabilities 943 160 (207)
Other current liabilities 372 274 (292)
Accounts receivable (1,911) (443) 442
Uncompleted contracts (2,323) - -
Inventories (508) (213) 77
Prepaid expenses and other current assets (1,596) (100) 276
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES (8,726) (1,275) (954)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Easy IP - (97) -
Acquisition of TimTec (1,041) - -
Acquisition of Q.Ton (1,177) - -
Other acquisitions (330) - -
Net cash paid on fixed assets (1,773) (43) (3)
Cash acquired with subsidiary - 129 -
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (4,321) (11) (3)
======== ======== ========
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EUROTELECOM COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
- ----------------------------------------------------------------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, JUNE 30, DECEMBER 31,
2000 1999 1998
(IN THOUSANDS)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from issuance of common stock, net 25,304 898 -
Proceeds from issuance of debt - 440 870
Short-term bank line of credit (207) 309 66
Repayment of debt - (372) (48)
Payments under financing arrangement (55) - -
--------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 25,042 1,275 888
--------- --------- ---------
Effects of exchange rate changes on cash 119 11 -
--------- --------- ---------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS 12,114 - (69)
Cash and cash equivalents at beginning of period - - 69
--------- --------- ---------
Cash and cash equivalents at end of period $ 12,114 $ - $ -
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 57 $ 35 $ 54
Acquisition of assets by financing arrangements $ 135 $ - $ 53
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