SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MAY 13, 2004
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MICROTEL INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 001-10346 77-0226211
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9485 HAVEN AVENUE, SUITE 100, RANCHO CUCAMONGA, CALIFORNIA 91730
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (909) 987-9220
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information contained in this Item 12 is being "furnished to" the
SEC in accordance with SEC Release Nos. 33-8216 and 34-47226 and shall not be
deemed "filed with" the SEC for purposes of Section 18 of the Securities
Exchange of 1934, as amended, or otherwise subject to the liabilities of that
section. The information contained in this Item 12 shall not be deemed
incorporated by reference into any registration statement, proxy statement or
other report except as shall be expressly set forth by specific reference in
such filing and regardless of any general incorporation language in such filing.
On May 13, 2004, MicroTel International Inc. (the "Company") issued a
press release describing selected financial results of the Company for the first
quarter of 2004. A copy of the press release is set forth below in its entirety:
MICROTEL INTERNATIONAL INC. REPORTS 6TH CONSECUTIVE
PROFITABLE QUARTER FOR FIRST QUARTER OF 2004
SALES ARE UP 9% AND NET PROFIT IS UP 59% FROM 1ST QUARTER, 2003
RANCHO CUCAMONGA, CALIFORNIA, May 13, 2004 - MicroTel International Inc. (OTCBB:
MCTL), an international manufacturer of defense and aerospace electronic
components and telecommunications equipment, today announced that for the first
quarter of 2004 it recorded net income of $70,000 or zero cents per share as
compared to $44,000 or zero cents per share in the first quarter of 2003, a 59%
improvement.
Net sales for the first quarter of 2004 increased by $524,000 or 9% to
$6,192,000 compared to net sales of $5,668,000 for the first quarter of 2003.
The increase resulted from increases in net sales of both the Company's
electronic components segment for the aerospace and defense markets and
communications equipment segment.
Randolph D. Foote, MicroTel's CFO, said: "We improved sales in both our segments
which, along with much higher gross profit margins, up from 38% to 44%, provided
the basis for our 59% improvement in net income in the first quarter of 2004 as
compared to the first quarter of 2003. We improved our net income in spite of
incurring higher marketing expenses and other operational investments to provide
for future growth together with higher investor relations expenses. Our cash
position and working capital remained strong at $1,076,000 and $5,686,000,
respectively. In addition, our backlog remained substantial at $9,830,000."
Carmine T. Oliva, chairman, president and CEO of MicroTel International Inc.,
stated: "We experienced greater than planned revenue in our defense and
aerospace Electronic Components business segment and also produced increased
sales in our Communications Equipment segment from the first quarter of 2004 in
comparison to the first quarter of 2003. Our gross margin improvement from 38%
in 2003 to 44% in 2004 is very significant and we believe we are on track for
higher levels of profitability in the subsequent quarters of 2004 than in the
first quarter."
-MORE-
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ABOUT MICROTEL
MicroTel International Inc. is an international manufacturer of defense and
aerospace electronic components and subsystems and communication equipment. Our
electronic components group, which includes XET Corporation and its
international subsidiaries, provides custom power conversion products, digital
and rotary switches and subsystem assemblies to the global electronic components
market and are primarily used for defense, aerospace and industrial
applications. Our communications group, consisting of CXR Telcom Corporation and
CXR Anderson Jacobson, provides network access, transmission and test equipment
to the North American and European communications industry. Founded in 1983,
MicroTel operates out of facilities in the United States, United Kingdom, France
and Japan. As of April 30, 2004, we had a total of 181 employees in our various
subsidiaries and divisions.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
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With the exception of historical information, the matters discussed in this
press release are forward looking statements that involve a number of risks and
uncertainties. The actual future results of MicroTel could differ from those
statements. Factors that could cause or contribute to such differences include,
but are not limited to, the ability of MicroTel to match or improve its first
quarter 2004 financial performance in subsequent quarters of 2004 and those
factors contained in the "Risk Factors" Section of the Company's Form 10-K for
the year ended December 31, 2003.
-TABLES FOLLOW-
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MICROTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended March 31,
2004 2003
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(in thousands except per share amounts)
Net sales $ 6,192 $ 5,668
COST OF SALES 3,445 3,527
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Gross profit 2,747 2,141
Operating expenses:
Selling, general and administrative 2,217 1,698
Engineering and product development 283 221
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Income from operations 247 222
Other expense
Interest expense (96) (96)
Other income (6) (14)
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Income before income taxes 145 112
INCOME TAX EXPENSE 75 68
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Net income 70 44
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Income per share:
Basic $ 0.00 $ 0.00
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Diluted $ 0.00 $ 0.00
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MICROTEL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2004 2003
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Current assets:
Cash and equivalents $ 1,076 $ 1,174
Accounts receivable 4,712 5,393
Inventories 6,577 6,683
Prepaid expenses and other 538 555
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Total current assets 12,903 13,805
Property, plant and equipment, net 401 322
Goodwill, net 2,475 2,447
Other assets 561 595
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$ 16,340 $ 17,169
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Liabilities and stockholders' equity:
Current liabilities:
Notes payable $ 2,320 $ 2,882
Current portion of long-term debt 285 316
Accounts payable 1,432 1,637
Accrued expenses 3,180 3,274
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Total current liabilities 7,217 8,109
Long term debt, less current portion 842 819
Other liabilities 296 325
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Total liabilities 8,355 9,253
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Convertible redeemable preferred stock
Stockholders' equity
Preferred stock 1 4
Common stock 77 77
Additional paid in capital 25,617 25,613
Accumulated deficit (17,816) (17,886)
Accumulated other comprehensive income 106 108
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Total stockholders' equity 7,985 7,916
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$ 16,340 $ 17,169
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 14, 2004 MICROTEL INTERNATIONAL INC.
By: /s/ RANDOLPH D. FOOTE
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Randolph D. Foote, Chief Financial Officer
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