FastComm Revs Decline Amid Profit Push

Electronic News, March 15, 1999

Sterling, Va.-FastComm Communications Corp. reported declining revenues for its third quarter and year to date period versus the previous year, but markedly smaller losses. The company is navigating its way through a reorganization and the stigma that Chapter 11 brings. It hopes to emerge from Chapter 11 "shortly" with the implementation of a new creditor-endorsed plan. A hearing is set for March 19.

FastComm reported revenue for the third quarter ended Jan. 30, 1999 of $1.7 million, down from $2.1 million in the same quarter the year before. There was a net loss of $1.2 million, or 10 cents per share, which included reorganization charges of $215,000. This compared favorably to a $3.2 million loss, or 31 cents per share, a year ago, it was said.

Year to date, FastComm reported revenue of $4.0 million, down from $5.6 million for the corresponding period a year ago. There was a net loss of $4.8 million, or 38 cents per share, which included reorganization charges of $529,000. This compared to a $6.9 million loss, or 69 cents per share, the year before.

"The Chapter 11 continues to hamper our selling efforts," said Peter C. Madsen, FastComm president. "We filed our final disclosure statement and plan of reorganization with the endorsement of the creditors committee. We look forward to the confirmation of our plan and anticipate emerging from Chapter 11 shortly."

Third quarter selling, general and administrative expenses decreased $134,000, or 11 percent, from the previous quarter and $771,000, or 43 percent, from the year-ago quarter. Year to date, such costs have declined over $1.5 million, or 29 percent.

FastComm specializes in frame relay access devices (FRADs), routers and ATM access devices. It also offers a family of high speed data compression equipment. Products are said to provide a "seamless" transport in multi-protocol environments for voice/data and video networking over LAN/WAN and global networks. Offerings include WEB Router, ECX-Router and EtherFRAD.

Why Chapter 11? FastComm lost a lawsuit and the judgement creditor (a former officer and director) seized the bank account, EN was told. Breach of contract was the issue.