Mitec Telecom reports first quarter, fiscal 2010 results, provides update on
market opportunities, mergers and acquisitions committee activies and date of
annual general meeting

MONTREAL, Sept. 14 /CNW Telbec/ - Mitec Telecom Inc. ("Mitec") (TSX: MTM), a leading designer and manufacturer of mobile wireless, fixed wireless, broadcast and satellite components, announced today its results for the first quarter of fiscal 2010, the three-month period ended July 31, 2009.

Sales were $6.7 million, which is a decrease of 3% over the previous quarter and 55% in comparison to the first quarter of fiscal 2009 when delivery of a large wireless order was accelerated to accommodate customer demand. A net loss of $2.1 million, or $0.01 per share was also reported, compared with a net loss of $3.1 million or $0.01 per share in the previous quarter, and a net profit of $55,000 or nil per share in the first quarter of fiscal 2009.

Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization) from continuing operations net of stock-based compensation and foreign exchange was negative $1.1 million compared to negative $1.8 million in the previous quarter and positive $925,000 in the first quarter of fiscal 2009. Almost 30 % of the reported EBITDA was negatively impacted by foreign exchange related charges.

"Q1 is historically our weakest quarter but, we're encouraged by recent signs of economic recovery. Several global infrastructure programs that had been put on hold have resumed, generating orders for preferred suppliers including Mitec," said President and Chief Executive Officer Daniel Piergentili. "If you eliminate the effect of foreign exchange fluctuation, which had a dramatic impact on all manufacturing businesses, Mitec hit its quarterly budget numbers. And, that's despite our having to defer revenue from the first part of a major telecom contract that came in after the quarter ended which was in our first quarter budget."

Year-over-year satcom revenue remained stable at $4.5 million. Telecom revenue was significantly lower in the first quarter of fiscal 2010. "The halt in infrastructure build-outs impacted our telecom business last quarter. In addition, Q1 '09 telecom revenue was exceptionally high due to the acceleration of a product order which resolved a major network problem for one of our larger customers," said Bruno Dumais, VP Finance and Chief Financial Officer.

Market Opportunities

As part of its growth strategy Mitec is actively pursuing several large niche market opportunities. This includes an exciting, new approach that helps small telecom operators improve network bandwidth and overcome coverage loss challenges at a reduced cost. "While promising, new initiatives require some expenditure to ensure they are positioned effectively, we are investing in them conservatively. I am very pleased with the results we have achieved in the wireless, satcom and military segments and confident that each these markets will generate significant future returns," said Piergentili.

Mergers and Acquisitions Committee

Earlier in 2009, a Mergers and Acquisitions Committee was formed and given a mandate to review buy and sell-side opportunities that would result in increased shareholder value through a transformative transaction that would ensure Mitec's ongoing future profitability. Opportunities may involve joint ventures, acquisitions, mergers and, under certain circumstances, the divestiture of various divisions of Mitec. Due to the confidential nature of these initiatives and to regulatory requirements, additional information cannot be provided at this time, however the Corporation is actively involved in several initiatives and some of them are more advanced than others.

Due to the confidential nature of these initiatives and regulatory requirements, additional information cannot be provided at this time however the Corporation is actively involved in several initiatives, some more advanced than others.

Annual General Meeting Date

The Corporation's Annual General Meeting will take place on Tuesday, October 20, 2009 at 11:00 a.m. EST. The meeting will be accessible by webcast. For details, please visit www.mitectelecom.com.

Please note: Due to confidentiality provisions, Mitec is generally not able to disclose the names of its major customers or the financial data related to sales transactions.

About Mitec Telecom Inc.

Mitec 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. Mitec 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, Mitec also operates facilities in China and California. Mitec is listed on the Toronto Stock Exchange under the symbol MTM. On-line information about Mitec is available at www.mitectelecom.com.

Certain statements in this release, including statements regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for Mitec's products, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in Mitec's public filings with the appropriate securities regulatory authorities.

    
    MITEC TELECOM INC.
    INTERIM CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)                    As at        As at
                                                        July 31,    April 30,
                                                           2009         2009
                                                              $            $
    -------------------------------------------------------------------------
                                                      Unaudited      Audited
    ASSETS
    Current
    Cash and cash equivalents                             3,344        4,485
    Short-term investments                                  181          181
    Trade receivables                                     5,758        5,592
    Other receivables                                       690          126
    Income tax recoverable                                  353          323
    Inventories                                           7,402        8,088
    Prepaid expenses and other                              935          629
    -------------------------------------------------------------------------
    Total current assets                                 18,663       19,424
    -------------------------------------------------------------------------
    Property, plant and equipment                         5,215        5,493
    Intangible assets                                     3,060        3,263
    Goodwill                                              1,991        1,991
    Investments                                              25           25
    Future income tax                                       164          125
    -------------------------------------------------------------------------
                                                         29,118       30,321
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities              6,506        5,449
    Current portion of long-term debt                     1,316        1,215
    -------------------------------------------------------------------------
    Total current liabilities                             7,822        6,664
    -------------------------------------------------------------------------
    Shareholders' equity
    Common shares                                       132,142      132,142
    Warrants                                              1,925        1,925
    Equity component of convertible debentures                7           14
    Contributed surplus                                   9,895        9,836
    Deficit                                            (122,049)    (119,980)
    Accumulated other comprehensive loss                   (624)        (280)
    -------------------------------------------------------------------------
    Total shareholders' equity                           21,296       23,657
    -------------------------------------------------------------------------
                                                         29,118       30,321
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    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,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    Sales                                                 6,707       14,931
    Cost of sales                                         5,672       11,765
    -------------------------------------------------------------------------
    Gross profit                                          1,035        3,166
    -------------------------------------------------------------------------

    Expenses
    Research and development                              1,064        1,013
    Selling and administrative                            1,210        1,534
    Amortization of intangible assets                       220          305
    Financial expenses                                      154          179
    Foreign exchange                                        411         (108)
    Impairment of property, plant and equipment              25            -
    Stock-based compensation                                 59          202
    -------------------------------------------------------------------------
                                                          3,143        3,125
    -------------------------------------------------------------------------

    Profit (loss) before income taxes                    (2,108)          41
    Income tax recovery                                     (39)         (14)
    -------------------------------------------------------------------------
    Net profit (loss) for the period                     (2,069)          55
    -------------------------------------------------------------------------

    Unrealized gain (loss) on translating financial
     statements of self-sustaining foreign operations      (344)          22
    -------------------------------------------------------------------------
    Comprehensive profit (loss) for the period           (2,413)          77
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted profit (loss) per common share      (0.01)        0.00
    -------------------------------------------------------------------------
    Weighted average number of outstanding
     common shares                                  220,666,756  220,343,256
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
    (In thousands of Canadian dollars,
    except for number of shares)
    Unaudited
                                                                      Equity
                                                                   component
                                                                   of conver-
                                                                   tible deb-
                            Common shares           Warrants         entures
    -------------------------------------------------------------------------
                        No.(000s)         $   No.(000s)         $          $
    -------------------------------------------------------------------------
    Balance,
     April 30, 2008      220,312    132,097     38,016      1,931         46
    Issued under a
     convertible
     debenture
     financing               354         43          -          -          -
    Stock-based
     compensation              -          -          -          -          -
    Other comprehensive
     gain for the period       -          -          -          -          -
    Net profit for the
     period                    -          -          -          -          -
    -------------------------------------------------------------------------
    Balance,
     July 31, 2008       220,666    132,140     38,016      1,931         46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance,
     April 30, 2009      220,666    132,142     37,829      1,925         14
    Issued upon
     conversion of
     convertible
     debentures                -          -          -          -         (7)
    Stock-based
     compensation              -          -          -          -          -
    Other
     comprehensive
     loss for the
     period                    -          -          -          -          -
    Net loss for the
     period                    -          -          -          -          -
    -------------------------------------------------------------------------
    Balance,
     July 31, 2009       220,666    132,142     37,829      1,925          7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                Accumu-
                                                 lated
                                                 other
                             Con-               compre-     Share-
                        tributed               hensive    holders'
                         surplus    Deficit       loss     equity
    ---------------------------------------------------------------
                               $          $          $          $
    ---------------------------------------------------------------
    Balance,
     April 30, 2008        9,223   (115,372)      (894)    27,031
    Issued under a
     convertible
     debenture
     financing                 -          -          -         43
    Stock-based
     compensation            202          -          -        202
    Other comprehensive
     gain for the period       -          -         22         22
    Net profit for the
     period                    -         55          -         55
    ---------------------------------------------------------------
    Balance,
     July 31, 2008         9,425   (115,317)      (872)    27,353
    ---------------------------------------------------------------
    ---------------------------------------------------------------

    Balance,
     April 30, 2009        9,836   (119,980)      (280)    23,657
    Issued upon
     conversion of
     convertible
     debentures                -          -          -         (7)
    Stock-based
     compensation             59          -          -         59
    Other
     comprehensive
     loss for the
     period                    -          -       (344)      (344)
    Net loss for the
     period                    -     (2,069)         -     (2,069)
    ---------------------------------------------------------------
    Balance,
     July 31, 2009         9,895   (122,049)      (624)    21,296
    ---------------------------------------------------------------
    ---------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of Canadian dollars)
    Unaudited                                     For the three months ended
                                                                     July 31,
                                                           2009         2008
                                                              $            $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net profit (loss) for the period                     (2,069)          55
    Add items not affecting cash
      Amortization of property, plant and
       equipment, intangible assets and
       deferred charges                                     468          753
      Impairment of property, plant and
       equipment                                             25            -
      Stock-based compensation                               59          202
      Accretion expense                                     111          128
      Income tax recovery                                   (39)         (14)
    -------------------------------------------------------------------------
                                                         (1,445)       1,124
    Changes in non-cash working capital
     balances related to operating activities               677       (2,416)
    -------------------------------------------------------------------------
    Cash flows used in operating
     activities                                            (768)      (1,292)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property, plant and
     equipment and intangible assets                       (364)        (149)
    Purchase of short-term investments                        -          (79)
    Sale of short-term investments                            -           77
    -------------------------------------------------------------------------
    Cash flows used in investing activities                (364)        (151)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Repayment of long-term debt                               -          (94)
    -------------------------------------------------------------------------
    Cash flows used by financing
     activities                                               -          (94)
    -------------------------------------------------------------------------

    Loss on foreign cash and cash
     equivalents held                                        (9)           -
    -------------------------------------------------------------------------

    Net decrease in cash and cash
     equivalents for the period                          (1,141)      (1,537)

    Cash and cash equivalents, beginning
     of the period                                        4,485        4,861
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of the
     period                                               3,344        3,324
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00002350EF

SOURCE Mitec Telecom Inc.

For further information: For further information: Mr. Jeffrey Mandel, Director, Investor and Corporate Relations, (514) 694-9000, jeffrey.mandel@mitectelecom.com; Source: Mitec Telecom Inc.

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Mitec Telecom Inc.

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