Mitec reports first quarter results



    - Gross margins improved tenfold, or by $1.9 million
    - $3.4 million reduction of the net loss

    MONTREAL, Sept. 13 /CNW Telbec/ - Mitec Telecom Inc. (TSX: MTM) today
reported its results for the first quarter of fiscal 2008, the three-month
period ended July 31, 2007. Results showed sustained improvement both at the
gross margin and the net loss levels.
    "We are extremely pleased with the strides made," said Dan Piergentili,
Mitec's President and CEO. "The introduction of new products and improved
inroads with the OEM market has allowed us to diversify and enhance our
customer and revenue base. Moreover, our efforts to contain costs have allowed
us to significantly increase our operating margins; first quarter bookings
were very strong resulting in a significant backlog as we enter into the
second quarter."
    Sales for the first quarter reached $7.6 million versus $8.7 million
reported in the first quarter of fiscal 2007. Gross profit for the quarter was
$2.1 million, compared to $188,000 in the same period of last fiscal year.
Operating expenses for the first quarter of fiscal 2008 were $2.5 million,
compared to $4.0 million reported in the first quarter of fiscal 2007.
    The net loss for the first quarter was $1.0 million, or $0.01 per share,
compared to a net loss of $4.4 million, or $0.06 a share in the same period of
last fiscal year.

    Mitec's Board of Directors announced that Mitec's Annual General Meeting
will take place at Mitec Headquarters, 9000 Trans-Canada Highway,
Pointe-Claire, Quebec, on October 19, at 11:00 am EST.

    About Mitec Telecom

    Mitec Telecom is a leading designer and provider of radio frequency (RF)
products for the telecommunications and satellite communications industries,
as well as a variety of other sectors. The Company sells its products
worldwide to network providers for incorporation into high-performing wireless
networks used in voice and data/internet communications. Headquartered in
Montreal, Canada, the Company also operates a facility in China.
    Mitec Telecom Inc. is listed on the Toronto Stock Exchange under the
symbol MTM. On-line information about Mitec is available at
www.mitectelecom.com.

    Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of the Company. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of
future events. Such factors may include, without excluding other
considerations, fluctuations in quarterly results, evolution in customer
demand for the Company's products and services, the impact of price pressures
exerted by competitors, and general market trends or economic changes. As a
result, readers are advised that actual results may differ from expected
results.

    
    MITEC TELECOM INC.
    INTERIM CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)
    Unaudited
                                                         As at         As at
                                                       July 31,     April 30,
                                                          2007          2007
                                                            $             $
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                            4,343         6,286
    Short-term investments                                  75            75
    Trade receivables                                    6,870         5,064
    Other receivables                                      659           889
    Income tax recoverable                                 668         1,112
    Inventories                                          7,328         7,672
    Prepaid expenses and other                             798           757
    -------------------------------------------------------------------------
    Total current assets                                20,741        21,855
    -------------------------------------------------------------------------
    Property, plant and equipment                        6,737         7,106
    Intangible assets                                    2,138         2,365
    Investments                                            750           750
    Deferred charges                                       895         1,248
    -------------------------------------------------------------------------
                                                        31,261        33,324
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities             5,845         6,647
    Current portion of long-term debt                      416           500
    -------------------------------------------------------------------------
    Total current liabilities                            6,261         7,147
    -------------------------------------------------------------------------
    Long-term debt                                         277           458
    -------------------------------------------------------------------------
                                                         6,538         7,605
    -------------------------------------------------------------------------

    Shareholders' equity
    Common shares                                      125,631       125,631
    Warrants                                             1,311         1,311
    Contributed surplus                                  8,693         8,645
    Deficit                                           (109,928)     (108,951)
    Accumulated other comprehensive income                (984)         (917)
    -------------------------------------------------------------------------
    Total shareholders' equity                          24,723        25,719
    -------------------------------------------------------------------------
                                                        31,261        33,324
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    (In thousands of Canadian dollars, except per share data and number
     of shares)
    Unaudited
                                                  For the three months ended
                                                                     July 31,
                                                          2007          2006
                                                             $             $
    -------------------------------------------------------------------------
    Sales                                                7,603         8,676
    Cost of sales                                        5,540         8,488
    -------------------------------------------------------------------------
    Gross profit                                         2,063           188
    -------------------------------------------------------------------------

    Expenses
    Selling and administrative                           1,486         2,023
    Research and development                             1,007         2,022
    Amortization of intangible assets                      227           497
    Financial expenses                                      30           135
    Foreign exchange                                       245            33
    Interest income                                         (3)          (51)
    Stock-based compensation                                48            64
    -------------------------------------------------------------------------
                                                         3,040         4,723
    -------------------------------------------------------------------------

    Loss from continuing operations before income
     taxes                                                (977)       (4,535)
    Income tax recovery                                      -          (114)
    -------------------------------------------------------------------------
    Loss from continuing operations                       (977)       (4,421)
    Loss from discontinued operations                        -            (8)
    -------------------------------------------------------------------------
    Net loss for the period                               (977)       (4,429)
    -------------------------------------------------------------------------

    Unrealized gain (loss) on translating financial
     statements of self-sustaining foreign operations      (67)           60
    -------------------------------------------------------------------------
    Comprehensive loss for the period                   (1,044)       (4,369)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per common share from
     continuing operations                               (0.01)        (0.06)
    Basic and diluted loss per common share from
     discontinued operations                             (0.00)        (0.00)
    Basic and diluted loss per common share              (0.01)        (0.06)
    -------------------------------------------------------------------------
    Weighted average number of outstanding
     common shares                                 174,502,223    76,405,263
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF DEFICIT
    (In thousands of Canadian dollars)
    Unaudited
                                                  For the three months ended
                                                                     July 31,
                                                          2007          2006
                                                             $             $
    -------------------------------------------------------------------------
    Deficit, beginning of the period                  (108,951)      (96,579)
    Net loss for the period                               (977)       (4,429)
    -------------------------------------------------------------------------
    Deficit, end of the period                        (109,928)     (101,008)
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of Canadian dollars)
    Unaudited
                                                  For the three months ended
                                                                     July 31,
                                                          2007          2006
                                                             $             $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Loss from continuing operations                       (977)       (4,421)
    Add items not affecting cash
      Amortization of property, plant and equipment,
       intangible assets and deferred charges              770         1,112
      Loss on disposal of property, plant and equipment     33             2
      Stock-based compensation                              48            64
    -------------------------------------------------------------------------
                                                          (126)       (3,243)
    Changes in non-cash working capital balances
     related to continuing operations                   (1,631)        1,781
    -------------------------------------------------------------------------
    Cash flows used in operating activities             (1,757)       (1,462)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property, plant and equipment and
     intangible assets                                     (32)         (107)
    Proceeds on disposal of property, plant and
     equipment                                              14             -
    Purchase of short-term investment                      (75)            -
    Sale of short-term investments                          75         9,492
    -------------------------------------------------------------------------
    Cash flows provided (used) in investing activities     (18)        9,385
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank indebtedness                            -           349
    Repayment of bank indebtedness                           -        (6,365)
    Repayment of long-term debt                           (127)         (177)
    -------------------------------------------------------------------------
    Cash flows used by financing activities               (127)       (6,193)
    -------------------------------------------------------------------------
    Effect of exchange rate fluctuations changes on
     cash and cash equivalents                             (41)          226
    -------------------------------------------------------------------------
    Net increase (decrease) in cash and cash
     equivalents from continuing operations             (1,943)        1,956
    Cash used by discontinued activities                     -           (36)
    -------------------------------------------------------------------------
    Net cash (decrease) in cash and cash equivalents    (1,943)        1,920
    Cash and cash equivalents, beginning of the period   6,286         1,468
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of the period         4,343         3,388
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Dan Piergentili, President and Chief Executive
Officer, Mitec Telecom, (514) 694-9000; Bruno Dumais, Vice-President and Chief
Financial Officer, Mitec Telecom, (514) 694-9000

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Mitec Telecom Inc.

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