Microtest Announces First Quarter 1999 Results

Microtest (Phoenix, AZ), a developer of network test and measurement and network attached storage products, Thursday announced results of operations for its first quarter ended March 27.

Revenues for the first quarter were nine million dollars, down seven percent from $9.7 million in the same quarter last year. This shortfall is attributed to the company's exit from the integrated DiscPort/CD Tower business. The DiscZerver has not yet ramped to adequately replace this revenue.

Exclusive of a special charge and the cumulative effect of a change in an accounting principle, recorded in the quarter, the first quarter net loss was $861,000, or $.11 per share, compared to net income of $90,000, or $.01 per share, in the first quarter of 1998.

After consideration of the combined charges totaling $641,000, or $.08 per share, the reported net loss for the quarter was $1.5 million, or $.19 per share.

Vincent C. Hren, Microtest's new president and chief executive officer said, "The loss for the first quarter is a result of actions taken by the company to restructure its management organization, and to write-off international product translation costs that had previously been capitalized."

"The company also incurred additional professional fees during the quarter, and further increased its reserves for warranty and product evaluation units. The increase in reserves reflects anticipated warranty repair costs as we expand our international service capability, and the expectation that certain product evaluation units may not be recovered."

"With the realignment into two strategic business units and my new management team completely in place, we are positioned to expand Microtest's revenue opportunities with a more efficient organization."

Hren added, "We are encouraged that additions to the OmniScanner product family are progressing nicely in development, which will benefit second half revenue. OmniScanner has been on the market for nine months now and is the only Category 6-7 scanner available proving our technology leadership in network test and measurement. "

Microtest is headquartered at 4747 North 22nd Street, Phoenix, AZ.

Microtest Inc., Phoenix Vince C. Hren or Dan Predovic, 602/952-6400 www.microtest.com