Fastcomm Reports Fiscal Year End Results - Company Financial Information

Cambridge Telcom Report, August 9, 1999

FastComm(OTC BB: FSCX) Communications Corp. has reported its financial results for its fiscal year ended April 30, 1999. Revenue for the period was $4.7 million, down from $8.9 million in the previous fiscal year.

There was a net loss of $5.5 million ($.43 per share) that included a $833,000 extraordinary gain ($.06 per share) generated by the Company's reorganization and reorganization expenses totaling $650,000. This compared favorably to a $9.1 million ($.87 per share) loss a year ago.

"The Chapter 11 hampered our selling efforts this past year," said Peter C. Madsen, FastComm president. "Our plan of reorganization, which was confirmed on March 30, 1999, achieved my personal goals of 100% payback to our creditors without impairing the ownership positions of our shareholders."

The Company cut costs sharply during the year. Operating expenses declined from $11.7 million in fiscal 1998 to $7.6 million in fiscal 1999. This represents a 35% reduction. $2 million in nonrecurring legal and professional fees inflated spending levels in the last two fiscal years. "I am pleased with the $4 million decline in operating expenses and look forward to the positive near term effect these reductions will have on our return to profitability." Madsen stated.

The year was highlighted with the purchase of KG Data Systems and the acquisition of voice over data technology from Alcatel. KG Data, now called the Mainframe Communications Division of FastComm, develops and maintains a front-end processor replacement for IBM mainframe computer networks. Initial versions of the product are now shipping. The Company believes this to be an exciting new vertical market, that of IBM's major and large multi-national customers. The voice over data product is a result of 3 years of development. FastComm executed a license agreement whereby FastComm will continue development and commence worldwide distribution, marketing and sales. "FastComm was on the way to developing a product much like the one we see today. This agreement gives us the ability to shorten the time-to-market significantly. I would have to say that this was a perfect investment opportunity," Madsen stated.

The Company's acquisition of new voice technology is being introduced as the GlobalStack, a router-based network access multiplexer. The GlobalStack is being marketed to large office facilities where high-speed telephone lines exist for both voice and data applications. In addition, FastComm's MetroLAN was recently introduced as a small remote office/branch office access router that allows voice over data including Voice over Frame Relay (VoFR), and Voice over Internet (VoIP). Video applications are also compatible with these new entrants, as they are typically handled as data would. At the end of the fiscal year, FastComm introduced GlobalView, a network management aid for network administrators. GlobalView encompasses the network industry's monitor and alarm protocol standards. Known as a graphical user interface in network parlance, GlobalView operates with all the major administrative systems; i.e., Sun Solaris, HP OpenView, IBM NetView, NT and Web Enabled for FastComm's WEB.router. All of FastComm's access products mentioned above are capable of supporting voice, data and video over the Internet. The Company also targets special in-house intranet and extranet applications with these products.

The Company has an order backlog for the GlobalStack and MetroLan products and will commence shipments of these products in the second fiscal quarter, beginning August 2, 1999. The Company also plans shipments of the larger ChanlComm 7790 during the second quarter.

"Fiscal year 2000 has started off strong," stated Madsen. "The Company recently booked a $1 million order from Amadeus, a world-renowned reservation system, and has executed new distributor agreements in South America, Europe and Asia. The Company closed a private placement of common shares and warrants that generated an immediate $1 million and has a potential worth of $3.6 million when the attached warrants are exercised. I am looking forward to a new year with new products and a new reorganized company," Madsen stated.

FastComm designs, develops, and manufactures advanced WAN/LAN/Global network routing and switching equipment, controllers and processors for mainframe and Unisys environments, Internet access products, and related networking devices. It is a total network systems solutions provider specializing in Voice/Fax/Video/Data over IP and Frame Relay. The company is also a leader in the effort to provide optimal migration paths for legacy networks moving toward newer routing technologies. Its goal is to provide customers with leading-edge networking technology and a cost-efficient means of incorporating these technologies into new or existing networks. FastComm prides itself on their ability to customize networks to the specific needs of their customers. Its customer base includes state governments, federal agencies, and domestic and international corporations located throughout the world.