NORWOOD, Mass., Nov. 10 /PRNewswire-FirstCall/ -- Elcom
International, Inc. (OTC:ELCOOTC:andOTC:AIM:OTC:ELCOTC:andOTC:ELCS)
(BULLETIN BOARD: ELCO and AIM: ELC and ELCS) , today announced
operating results for its third quarter ended September 30, 2006.
Financial Summary Table (Unaudited) (in thousands, except per share
amounts) Quarter Ended Nine Months Ended September 30, September
30, 2006 2005 2006 2005 Net revenues $683 $547 $2,457 $1,924 Gross
profit 559 436 2,010 1,585 Operating loss (1,563) (1,050) (3,842)
(3,010) Net loss $(1,523) $(1,115) $(3,770) $(3,209) Basic and
diluted net loss per share $(--) $(0.02) $(0.01) $(0.05) Basic and
diluted weighted average common shares outstanding 402,080 61,282
401,396 61,282 The above table, the following description and the
appended condensed consolidated financial information should be
read in conjunction with the Risk Factors and other information
contained in the Company's Forms 10-QSB for the periods ended March
31, June 30, and September 30, 2006 and 2005 Annual Report on Form
10-KSB, as amended. Quarter ended September 30, 2006 compared to
the quarter ended September 30, 2005. Net Revenues. Net revenues
for the quarter ended September 30, 2006 increased to $683,000,
from $547,000 in the same period of 2005, an increase of $136,000,
or 25%. License, hosting services and other fees for the quarter
ended September 30, 2006 increased to $636,000 from $505,000 in the
same period of 2005, an increase of $131,000, or 25%. This increase
is primarily due to higher hosting services revenue related to the
Scottish Executive's eProcurement Scotl@nd Programme. License,
hosting services and other fees include license fees, hosting
services fees, test system fees, supplier fees, usage fees, and
eMarketplace agent and affiliate fees. Professional services fees
for the quarter ended September 30, 2006 increased to $47,000, from
$42,000 in the same period of 2005, an increase of $5,000, or 12%.
While the Company anticipates that professional services will
increase in future quarters, the accounting for professional
implementation and development services revenues related to the
Zanzibar eMarketplace will be accreted to revenue over the
remaining term of the contract (which expires in July of 2010,
subject to client renewal) which will minimize the impact of these
revenues on reported earnings. Deferred revenue includes $67,000
related to the Zanzibar eMarketplace, the bulk of which relates to
implementation services that are ongoing as of September 30, 2006.
The Company did not begin accreting professional services revenue
related to the Zanzibar eMarketplace in third quarter of 2006 as
originally anticipated, and now believes that such accretion will
commence in the fourth quarter of 2006, or first quarter of 2007.
Gross Profit. Gross profit for the quarter ended September 30, 2006
increased to $559,000 from $436,000 in the comparable 2005
quarterly period, an increase of $123,000, or 28%. This increase is
primarily a result of the increase in revenue in the 2006 quarter
over that recognized in the third quarter of 2005. Selling, General
and Administrative Expenses. Selling, general and administrative
("SG&A") expenses for the quarter ended September 30, 2006 were
$1,740,000 compared to $1,317,000 in the second quarter of 2005, an
increase of $423,000, or 32%. Because of the cash constraints
experienced by the Company over the last several years, Elcom has
operated with as few personnel as possible, and certain of its
personnel have been compensated at below market rates. In order to
address staffing requirements related to its increasing level of
business activity, the Company engaged third party contractors
during late 2005 and through the beginning of the second quarter of
2006, and began to hire additional personnel in April 2006. The
Company's headcount (full and part-time) has increased by ten, from
36 at September 30, 2005 to 46 at September 30, 2006. The Company's
personnel costs increased $233,000 in the third quarter of 2006 as
compared to the third quarter of 2005, and increased $120,000 over
the amounts recorded in the second quarter of 2006. Personnel
expenses recorded in the third quarter of 2006 include $99,000 of
stock option expense related to the initial implementation of SFAS
123R, which requires the expensing of stock-based compensation
(stock options), which was not required in the third quarter of
2005. In addition to the increase in personnel expenses, the
primary reasons for the increase in SG&A expenses in the third
quarter of 2006 as compared to the third quarter of 2005 relate to
additional software licensing, computer supplies and other computer
infrastructure expenses related to the Company's growing business,
as well as increases in legal expenses related to the change in
control of the Company. Increases in travel and marketing expenses
in the third quarter of 2006 as compared to the third quarter of
2005, were generally offset by a reduction in facilities expenses
in the third quarter of 2006 as compared to the third quarter of
2005, as the Company renegotiated its headquarters lease in the
first quarter of 2006. Research and Development Expenses. Research
and development expense for the quarters ended September 30, 2006
and 2005 were $382,000 and $169,000, respectively, reflecting an
increase in the 2006 quarter of $213,000 over the expense recorded
in the third quarter of 2005. The expense in the 2006 quarter
primarily relates to ongoing work associated with improving the
data interchange and inbound interface capabilities of the
Company's PECOS technology. Additionally, the increase in research
and development expense in the third quarter of 2006, as compared
to the third quarter of 2005, is due to the increased level of
development activity as noted above, as well as approximately
$30,000 of stock-based compensation expense reflected in the third
quarter of 2006, while in the third quarter of 2005 stock-based
compensation expense was not recorded. Research and development
expense for the quarter ended June 30, 2006 was $266,000, which
increased to $382,000 in the third quarter of 2006, reflecting
increased activities related to the development of new releases of
the company's products in the third quarter of 2006. Accordingly,
the Company anticipates that research and development expense will
moderate in future quarters. Operating Loss. The Company reported
an operating loss of $1,563,000 for the quarter ended September 30,
2006 compared to a loss of $1,050,000 reported in the comparable
quarter of 2005, an increase of $513,000 in the loss reported. This
increased operating loss in the third quarter of 2006 compared to
the same quarter in 2005 was primarily due to the increase in
SG&A expenses and research and development expenses in 2006,
net of the increase in recorded gross profit. Interest and Other
Income (Expense), Net. Interest income and other income (expense),
net for the quarter ended September 30, 2006 was income of $49,000
versus income of $6,000 in the third quarter of 2005. The increase
in income, net in 2006 is primarily related to interest income
earned on the funds raised in December of 2005. Interest Expense.
Interest expense for the quarter ended September 30, 2006 was
$9,000, compared to $71,000 in the same period of 2005. The third
quarter 2006 interest expense reflects interest related to capital
leases, while the third quarter 2005 expense primarily reflects
interest on the Company's Convertible Debentures, and amortization
of the related conversion discount. The Debentures converted into
Company common stock in December of 2005. Net Loss. The Company's
net loss for the quarter ended September 30, 2006 was $1,523,000,
an increase in the loss of $408,000 from the loss recorded in the
third quarter 2005 of $1,115,000, as a result of the factors
discussed above. Nine months ended September 30, 2006 compared to
the nine months ended September 30, 2005. Net Revenues. Net
revenues for the nine months ended September 30, 2006 increased to
$2,457,000, from $1,924,000 in the same period of 2005, an increase
of $533,000, or 28%. License, hosting services and other fees
increased from $1,484,000 in the first nine months of 2005, to
$2,072,000 in the first nine months of 2006, an increase of
$588,000, or 40%. This increase is primarily due to $245,000 in
non-recurring eMarketplace agent fees related to a terminated
agreement, as well as an increase in the level of customers using
the Scottish Executive's eProcurement Scotl@nd Programme. License,
hosting services and other fees include license fees, hosting
services fees, test system fees, supplier fees, usage fees, and
eMarketplace agent and affiliate fees. Professional services fees
decreased by $55,000, to $385,000 in the first nine months of 2006,
from $440,000 in the first nine months of 2005, reflecting a
decrease in professional services revenues related to projects
completed in 2005. During the first nine months of 2006, much of
the Company's technical staff was focused on completing a new
version of the Company's PECOS software system (which was released
on June 30, 2006), and therefore the time available for other
professional services projects was limited. Professional services
revenues reflect implementation fees of $152,000 for eProcurement
Scotland clients that went live in the first nine months of 2005,
and professional services revenues in the first nine months of 2006
reflect implementation fees of $154,000 for eProcurement Scotland
clients that went live in the first nine months of 2006. Gross
Profit. Gross profit for the nine months ended September 30, 2006
increased to $2,010,000 from $1,585,000 in the comparable 2005 nine
month period, an increase of $425,000, or 27%. This increase is
primarily a result of the increase in revenue in the first nine
months of 2006 over that recognized in the first nine months of
2005. Selling, General and Administrative Expenses. SG&A
expenses for the nine months ended September 30, 2006 were
$4,874,000 compared to $4,085,000 in the first nine months of 2005,
an increase of $789,000, or 19%. Because of the cash constraints
experienced by the Company over the last several years, Elcom has
operated with as few personnel as possible, and certain of its
personnel have been compensated at below market rates. In order to
address staffing requirements related to its increasing level of
business activity, the Company engaged third party contractors
during late 2005 and through the beginning of the second quarter of
2006, and began to hire additional personnel in April 2006. The
Company's headcount (full and part-time) has increased by ten, from
36 at September 30, 2005 to 46 at September 30, 2006. Therefore,
Elcom anticipates that its SG&A expenses will also increase in
future quarters. The Company's personnel costs increased $358,000
the first nine months of 2006 as compared to the first nine months
of 2005, primarily due to an increase in headcount and $213,000 of
stock option expense recorded in the first nine months of 2006,
related to the initial implementation of SFAS 123R which requires
the expensing of stock-based compensation (stock options), which
was not required in the first nine months of 2005. In addition to
the increase in personnel expenses, the primary reasons for the
increase in SG&A expenses in the first nine months of 2006, as
compared to the first nine months of 2005, relate to additional
software licensing, computer supplies and other computer
infrastructure expenses related to the Company's growing business,
as well as increases in insurance and legal expenses related to the
change in control of the Company. Increases in travel and marketing
expenses in the first nine months of 2006 as compared to the first
nine months of 2005, were generally offset by both a reduction in
facilities and professional services expense in the first nine
months of 2006 as compared to the first nine months of 2005, as the
Company renegotiated its headquarters lease in the first quarter of
2006. Due to the acquisition of various equipment and software in
the first nine months of 2006, the Company anticipates that
depreciation and amortization expense will increase in future
periods. Research and Development Expenses. Research and
development expense for the nine months ended September 30, 2006
and 2005 were $978,000 and $510,000, respectively, reflecting an
increase in the first nine months of 2006 of $468,000 over the
expense recorded in the first nine months of 2005. The increase in
expense in the first nine months of 2006, compared to the same nine
month period in 2005, was due primarily to an increased level of
work commenced in late 2005, related to new software for supplier
directories, marketplace portals, client sign on, request for
quotation module, interfaces to other software, as well as
enhancements to improve the data interchange, and inbound interface
capabilities, and a variety of other internal enhancements
incorporated in a new version of the Company's PECOS software
system released on June 30, 2006. Certain of these items were
completed in the first quarter of 2006, and are primarily related
to the Zanzibar eMarketplace, but will also be included in Elcom's
offerings to other customers and potential customers. In the first
nine months of 2006, research and development expense included
approximately $114,000 of third party consulting expense and
$65,000 of stock-based compensation expense, while in the first
nine months of 2005 all expenses were internal and stock-based
compensation expense was not recorded. Operating Loss. The Company
reported an operating loss of $3,842,000 for the nine months ended
September 30, 2006, compared to a loss of $3,010,000 reported in
the first nine months of 2005, an increase of $832,000 in the loss
reported. This increased operating loss in the first nine months of
2006 compared to the same period of 2005 was primarily due to the
increase in SG&A expenses and research and development expenses
in 2006, net of the increase in recorded gross profit. Interest and
Other Income (Expense), Net. Interest income and other income
(expense), net for the first nine months of 2006 was $95,000 versus
$6,000 in the first nine months of 2005. The increase in income,
net in 2006 over 2005 is primarily related to interest income
earned on the funds raised in December of 2005. Interest Expense.
Interest expense for the nine months ended September 30, 2006 was
$23,000, compared to $205,000 in the same period of 2005. The
expense for the first nine months of 2006 reflects interest
primarily related to capitalized leases, while the expense for the
first nine months of 2005 primarily reflects interest on the
Company's Convertible Debentures, and amortization of the related
conversion discount. The Debentures converted into Company common
stock in December of 2005. Net Loss. The Company's net loss for the
nine months ended September 30, 2006 was $3,770,000, an increase in
the loss of $561,000 from the loss recorded in the nine months of
2005 of $3,209,000, as a result of the factors discussed above.
Liquidity and Capital Resources Net cash used in operating
activities for the nine months ended September 30, 2006 was
$3,895,000, which is attributable primarily to the Company's net
loss of $3,770,000, together with an increase of $110,000 in
prepaid expenses and decreases in accounts payable and accrued
expenses totaling $876,000, which uses were offset by an increase
in deferred revenues totaling $294,000 and non-cash depreciation,
amortization and stock-based compensation expenses aggregating
$596,000. In the U.K., the Company has a small overdraft facility
with its bank, which allows for short-term overdrafts. The largest
overdraft in the first nine months of 2005 was approximately
$18,000. The facility is an informal arrangement, secured by a
pledge of U.K. assets. There was no overdraft position during the
first nine months of 2006. The Company's principal commitments
consist of a lease on its headquarters office facility, capital
lease obligations and a long-term software license payable. The
Company will also require ongoing investments in research and
development, and equipment and software in order to further
increase operating revenues and meet the requirements of its
customers. On December 20, 2005, the Company issued a total of
298,582,044 shares of common stock to investors in the U.K. and
listed the shares on the AIM. Elcom raised a total of $7.9 million,
with net proceeds to the Company of $7.7 million. Of the total
raised, approximately $547,000 represented the conversion of
non-U.S. investor loans and related accrued interest. The funds
derived from the 2005 issuance of common stock on the AIM are being
used to support the Company's working capital requirements. On
October 23, 2006, the Company agreed to issue a total of 76,336,289
shares of common stock to investors in the U.K. and listed the
shares on the AIM. Elcom raised a total of $2.5 million, with net
proceeds to the Company of approximately $2.5 million. The funds
derived from the 2006 issuance of common stock on the AIM are being
used to support the Company's working capital requirements. Risk
Factors Relating to Liquidity The Company's consolidated financial
statements as of September 30, 2006 have been prepared under the
assumption that the Company will continue as a going concern
through the third quarter of 2007. The Company's independent
registered public accounting firm, Vitale, Caturano & Company,
Ltd., issued a report dated March 6, 2006 that included an
explanatory paragraph referring to the Company's significant
operating losses and expressing substantial doubt in Elcom's
ability to continue as a going concern. As of September 30, 2006,
the Company had approximately $991,000 of cash and cash
equivalents, and has used $3,895,000 of cash in operating
activities in the first nine months of 2006. The Company has
incurred $12,882,000 of cumulative net losses for the
twenty-one-month period ended September 30, 2006. As a result of
funds raised via common stock issuances at the end of fiscal 2005
and in October 2006, the Company has substantially improved its
financial position from September 30, 2005. The Company believes it
has sufficient liquidity to fund operations through the second
quarter of 2007, however, it anticipates that it will incur a loss
in fiscal 2006 and fiscal 2007, and will require additional
operating revenues in order to achieve profitable operations. There
can be no assurance that the Company will generate additional
operating revenues. If the Company does not generate additional
operating revenues, it will require additional capital investment
or debt financing in order to continue operations. Factors
Affecting Future Performance A significant portion of the Company's
revenues are from hosting services and associated fees received
from Capgemini under a back-to-back contract between Elcom and
Capgemini which essentially mirrors the primary agreement between
Capgemini and the Scottish Executive's eProcurement Scotl@nd
Programme, executed in November 2001. Future revenue under this
arrangement is contingent on the following significant factors: the
rate of adoption of the Company's ePurchasing software system by
Public Entities associated with the Scottish Executive; renewal by
existing Public Entity clients associated with the Scottish
Executive of their rights to use the ePurchasing software system;
the procurement of additional services from the Company by Public
Entities associated with the Scottish Executive; Capgemini's
relationship with the Scottish Executive; their compliance with the
terms and conditions of their agreement with the Scottish
Executive; and the ability of the Company to perform under its
agreement with Capgemini. In addition, the Company intends to
continue to commit resources to provide the eProcurement and
eMarketplace components of the Zanzibar eMarketplace for public
sector organizations in the U.K. under its agreements with PASSL
and PA. Future revenue under this arrangement is contingent
primarily on the timing and rate of adoption by U.K. Public
Entities of the Zanzibar eMarketplace, as well as the timing and
level of costs incurred to develop the required infrastructure to
support the architecture of the Zanzibar eMarketplace, stage one
(of three stages) of which was accepted in February 2006, and the
ability of the consortium, as a whole, to operate on a profitable
basis. The Company has not recognized any revenues under this
arrangement through September 30, 2006 due to the limited use of
the system, and there is no guarantee of future revenue related to
this agreement. In early October 2006, U.S. Bank officially
launched U.S. Bank Access (R) Purchase using the Company's software
in combination with the bank's commercial credit card program. The
program is aimed at the medium and larger company segment of U.S.
Bank's commercial card customers. In this arrangement, the Company
expects to earn agent or affiliate fees based on the purchases that
are processed through the eMarketplace. If further business fails
to develop under the Capgemini agreement or if the Zanzibar
eMarketplace does not attract a profitable level of clients, or if
the U.S. eMarketplaces do not expand as expected, or if the U.S.
Bank relationship does not generate revenues as planned, or if the
Company is unable to perform under any of these agreements, it
would have a material adverse affect on the Company's future
financial results. Outlook As evidenced by the level of SG&A
expenses, research and development expenses, and cost of revenues,
the Company's expenditures in 2006 have begun to increase as
compared to 2005 in order to more properly staff the Company to
address the increased level of its business and expected further
increases. The Company expects that its expenses will continue to
increase, although at a moderating rate, as described above.
Accordingly, the Company expects that its operating loss will
continue through 2006. Improvements in revenues and operating
results from operations in future periods will not occur without
the Company being able to generate incremental, ongoing operating
revenues from existing and new clients. The Company believes it has
sufficient liquidity to fund operations through the second quarter
of 2007; however, it anticipates that it will incur a loss in
fiscal 2006, and will require additional, ongoing operating
revenues in order to achieve profitable operations. If the Company
is unable to generate incremental, ongoing operating revenues
before the end of the second quarter of 2007, it will require
additional capital investment or debt financing in order to
continue operations. The Company can make no assurance that it will
be able to raise additional capital or arrange a credit facility in
the event its capital resources are exhausted. STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT Except for the historical
information contained herein, the matters discussed in this press
release could include forward-looking statements or information.
All statements, other than statements of historical fact,
including, without limitation, those with respect to the Company's
objectives, plans and strategies set forth herein and those
preceded by or that include the words "believes," "expects,"
"targets," "intends," "anticipates," "plans," or similar
expressions, are forward-looking statements. Although the Company
believes that such forward-looking statements are reasonable, it
can give no assurance that the Company's expectations are, or will
be, correct. These forward-looking statements involve a number of
risks and uncertainties which could cause the Company's future
results to differ materially from those anticipated, including: (i)
the necessity for the Company to control its expenses as well as to
generate incremental, ongoing operating revenues and whether this
objective can be met given the overall marketplace and clients'
acceptance and usage of eCommerce software systems, eProcurement
and eMarketplace solutions including corporate demand therefore,
the impact of competitive technologies, products and pricing,
particularly given the substantially larger size and scale of
certain competitors and potential competitors; (ii) the consequent
results of operations given the aforementioned factors; and (iii)
the necessity of the Company to achieve profitable operations
within the constraints of its existing resources, and if it can
not, the availability of incremental capital funding to the
Company, particularly in light of the audit opinion from the
Company's independent registered public accounting firm in the
Company's 2005 Annual Report on Form 10-KSB, as amended, and other
risks detailed from time to time in this Quarterly Report on Form
10-QSB and in its other SEC reports and statements, including
particularly the Company's "Risk Factors" contained in the
prospectus included as part of the Company's Registration Statement
on Form S-3 filed on June 21, 2002. The Company assumes no
obligation to update any of the information contained or referenced
in this press release. The financial data set forth below should be
read in conjunction with the Consolidated Financial Statements and
other disclosures contained in the Company's 2005 Annual Report on
Form 10-K, as amended and Forms 10-QSB for the periods ended March
31, June 30, and September 30, 2006. ELCOM INTERNATIONAL, INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except
share data) September 30, December 31, 2006 2005 (unaudited) ASSETS
CURRENT ASSETS: Cash and cash equivalents $991 $6,399 Accounts
receivable: Trade 561 548 Less-Allowance for doubtful accounts 48
45 Accounts receivable, net 513 503 Prepaid expenses and other
current assets 229 119 Total current assets 1,733 7,021 PROPERTY,
EQUIPMENT AND SOFTWARE, AT COST: Computer hardware and software
21,272 20,675 Furniture, equipment and leasehold improvements 3,088
3,088 24,360 23,763 Less -- Accumulated depreciation and
amortization 23,326 23,020 1,034 743 OTHER ASSETS 14 10 Total
assets $2,781 $7,774 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Current portion of capital lease obligations $114 $27
Related party convertible loan payable -- 120 Convertible loans
payable -- 1,179 Accounts payable 369 547 Deferred revenue 839 545
Related party accrued salary, bonuses and interest 1,073 1,163
Accrued expenses and other current liabilities 1,044 2,483 Current
liabilities of discontinued operations 43 62 Total current
liabilities 3,482 6,126 CAPITAL LEASE OBLIGATIONS, NET OF CURRENT
PORTION 194 -- OTHER LONG TERM LIABILITY 324 423 Total liabilities
4,000 6,549 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY
(DEFICIT): Preferred stock, $.01 par value; Authorized --
10,000,000 shares -- Issued and outstanding -- none -- -- Common
stock, $.01 par value; Authorized -- 700,000,000 shares -- Issued
-- 402,611,152 and 399,152,859 shares 4,026 3,992 Additional
paid-in capital 126,364 125,263 Accumulated deficit (126,252)
(122,483) Treasury stock, at cost -- 530,709 shares (4,712) (4,712)
Accumulated other comprehensive loss (645) (835) Total
stockholders' equity (deficit) (1,219) 1,225 $2,781 $7,774 ELCOM
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS AND OTHER COMPREHENSIVE INCOME (in thousands, except per
share data) (unaudited) Three Months Ended Nine Months Ended
September 30, September 30, 2006 2005 2006 2005 Net Revenues:
License, hosting services and other fees $636 $505 $2,072 $1,484
Professional services 47 42 385 440 Total net revenues 683 547
2,457 1,924 Cost of revenues 124 111 447 339 Gross profit 559 436
2,010 1,585 Operating Expenses: Selling, general and administrative
1,740 1,317 4,874 4,085 Research and development 382 169 978 510
Total operating expenses 2,122 1,486 5,852 4,595 Operating loss
(1,563) (1,050) (3,842) (3,010) Interest and other income
(expense), net 49 6 95 6 Interest expense (9) (71) (23) (205) Net
loss before income taxes (1,523) (1,115) (3,770) (3,209) Income
taxes -- -- -- -- Net loss (1,523) (1,115) (3,770) (3,209) Other
comprehensive income, net of tax 37 14 190 39 Comprehensive loss
$(1,486) $(1,101) $(3,580) $(3,170) Basic and diluted net loss per
share $(--) $(0.02) $(0.01) $(0.05) Weighted average number of
basic and diluted shares outstanding 402,080 61,282 401,396 61,282
ELCOM INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended
September 30, 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net
loss $(3,770) $(3,209) Adjustments to reconcile net loss to net
cash used in operating activities: Depreciation and amortization
291 350 Stock based compensation 305 -- Deferred rent expense --
304 Provisions for doubtful accounts receivable 1 2 Changes in
current assets and liabilities: Accounts receivable, net (11) 108
Prepaid expenses and other current assets (110) (130) Accounts
payable (178) 269 Deferred revenue 294 114 Accrued expenses and
other current liabilities (698) 1,148 Net cash used in continuing
operating activities (3,876) (1,044) Net cash (used in) provided by
discontinued operations (19) 6 Net cash used in operating
activities (3,895) (1,038) CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, equipment and software (228) (3) Change in
other assets (4) (20) Net cash used in investing activities (232)
(23) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from loans
payable -- 936 Repayments of loans payable (1,299) -- Repayments of
capital lease obligations (72) (22) Decrease in other long term
liability (99) (90) Net cash provided by (used in) financing
activities (1,470) 824 FOREIGN EXCHANGE EFFECT ON CASH 189 34 NET
DECREASE IN CASH AND CASH EQUIVALENTS (5,408) (203) CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD 6,399 390 CASH AND CASH
EQUIVALENTS, END OF PERIOD $991 $187 SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION: Interest paid $37 $9 Income taxes paid $--
$-- Issuance of common stock in satisfaction of deferred rent $250
$-- Acquisition of equipment under capital leases $353 $-- Cost of
capital reduction $580 $-- AT THE COMPANY: Investor Relations
E-mail: DATASOURCE: Elcom International, Inc. CONTACT: Investor
Relations at Elcom International, Inc., Web site:
http://www.elcom.com/
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