Cost Reductions At Microtel Subsidiary to Improve Financial Results; Measures Will Make $425,000 Additional Contribution To Profitability

Business Wire, July 23, 1998

ONTARIO, Calif.--(BUSINESS WIRE)--July 23, 1998--MicroTel International, Inc. (NASDAQ Small Cap: MCTL) today announced that its XIT subsidiary has implemented cost reductions designed to significantly lower annual operating expenses by approximately $425,000, thereby making a substantial additional contribution to profitability . These cost reduction measures are part of an overall corporate strategy directed at minimizing or eliminating specific low margin products, while continuing to focus on products with higher margins. The order backlog for higher margin products has grown dramatically in 1998.

Commenting on the cost reduction strategy, William J. Miller, Vice President and Sector Manager for Components and Subsystems Assembly stated, "While 1998 continues to show strong profitability, the implementation of these cost reduction measures will make a substantial additional contribution to further improving the financial operating results of this business unit throughout the remainder of 1998 and into 1999." James P. Butler, MicroTel's CFO, commented that, "These actions are indicative of the corporation's strong bottom line focus as it moves to return MicroTel to near- and long-term profitability."

XIT Corporation, the largest part of the Component and Subsystem Assembly Sector, designs and manufactures a wide range of information technology products, including custom-designed display and data input subsystems for telecommunication, aerospace and industrial markets.

The statements in this press release relating to matters that are not historical are forward-looking statements which involve risks and uncertainties including, without limitation, economic and competitive conditions in the markets served by the Company affecting the demand for the Company's products, product pricing, market acceptance, access to distribution channels and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. These risks could cause actual results to differ materially from those anticipated or described herein.

   CONTACT:  James P. Butler, CFO
              MicroTel International Inc.
              (909) 456-4321
               or
              Herbert Lanzet/Gerald Ortsman
              (212) 687-0061