Jalbert: Transcrypt’s loss belies enormous growth potential
Looking for the bright side of Transcrypt International’s $2.6 million net loss in the second quarter, Chairman Michael Jalbert said, “I’m pleased with the strong progress during the quarter in establishing partnerships and penetrating the federal government market, both of which are important steps in our strategy.”
This year’s second quarter loss matches last year’s, after the exclusion of the positive benefit of a $2.2 million litigation reserve reversal. Revenues for the second quarter of this year were $11.9 million compared to $12.7 million in the 1999 second quarter.
“The transition from older products to the next generation of wireless communications is taking longer than expected, and this has affected both our top- and bottom-line results,” Jalbert explained.
During the quarter, Transcrypt received its initial order for Project 25 digital radios from the FBI, signed a licensing agreement with Motorola for the development and sale of wireless products using LTR-Net technology and co-developed a line of hand-held radios with Unimo Technologies. Under terms of its agreement with Unimo, Unimo will develop and provide portable radio hardware based on specifications by Transcrypt’s E. F. Johnson Company subsidiary. Johnson will develop the software that enables the radios to be used in a various radio systems, including radio-to-radio operation, conventional single-channel systems, LTR multichannel systems and LTR-Net networked multichannel systems.
Transcrypt has revised its revenue growth forecast for fiscal 2000 from 15-20% to 5-10% growth over 1999. It also anticipates that its net loss for 2000 will be about the same as its net loss for 1999, which excluded the positive effect of the reserve adjustment reversal.
“Our goal is to be a company with $200 million in revenues within five years,” noted Jalbert. “With the actions being taken this year to strengthen our management team, improve product development and enhance marketing, we believe that 2001 will be an excellent year for us, and we remain confident in our forecast for profitability next year.”