Mitec Telecom reports fiscal 2009 Q1 results



    Sales reach $14.9 million - a 96% increase year-over-year
    EBITDA from continuing operations grew to $831,000
    Net income of $55,000

    MONTREAL, Sept. 11 /CNW Telbec/ - Mitec Telecom (TSX: MTM) today
announced its results for the first quarter of fiscal 2009, the three-month
period ended July 31, 2008.
    Sales were $14.9 million, an increase of 36% over the previous quarter
and 96% year-over-year. A net profit of $55,000, or $0.00 per share was also
reported. This compares to a net loss of $1.8 million or $0.01 per share in
the previous quarter, and a net loss of $977,000 or $0.01 per share in the
first quarter of fiscal 2008.
    EBITDA from continuing operations (earnings before interest, income
taxes, depreciation and amortization) was $831,000 compared to losses of
$507,000 during the previous quarter and $184,000 during the first quarter of
fiscal 2008.
    The majority of revenue during the first quarter was generated by Mitec's
Telecom segment, which experienced sales of $10.4 million-an increase of 250%
year-over-year. This growth resulted from high demand for Mitec's wireless
products from clients that are expanding wireless networks in developing
countries.
    "I'm very pleased with our results this quarter. Our focus on using
Mitec's expertise and operational capability to take advantage of niche market
opportunities continues to generate results. In this quarter, the Telecom
segment growth we experienced helped deliver a profitable quarter", said
President and CEO Dan Piergentili. "We continue to diversify and grow our
product portfolio, expanding this strategy into the mobile wireless, military
and next generation broadcasting areas as well as to our legacy telecom and
satcom products, which have been updated and refined."
    "The results generated this quarter are a further indication that Mitec's
turnaround is succeeding," said Chairman Jeffrey Mandel. "Credit for this
belongs to our CEO, Dan Piergentili and his talented staff in Canada, the
United States and China who have demonstrated that they are able to satisfy
the needs of some of the world's largest and most demanding telecom and
satellite corporations."
    The company's Annual General Meeting will take place on Thursday
October 16, 2008 at 11:00 a.m. at Fraser Milner Casgrain LLP, 1 Place Ville
Marie, Suite 3900, Montreal Quebec. The meeting will be accessible by webcast.
For details please visit www.mitectelecom.com.

    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 facilities in California and
China. Mitec Telecom Inc. is listed on the Toronto Stock Exchange under the
symbol MTM.

    
    MITEC TELECOM INC.
    INTERIM CONSOLIDATED BALANCE SHEETS
    (In thousands of Canadian dollars)                    As at        As at
                                                        July 31,    April 30,
                                                           2008         2008
                                                              $            $
    -------------------------------------------------------------------------
                                                      Unaudited      Audited
    ASSETS
    Current
    Cash and cash equivalents                             3,245        4,784
    Short-term investments                                   79           77
    Trade receivables                                    16,797       10,036
    Other receivables                                       325          630
    Income tax recoverable                                  644          839
    Inventories                                           8,754        8,759
    Prepaid expenses and other                              473          580
    -------------------------------------------------------------------------
    Total current assets                                 30,317       25,705
    -------------------------------------------------------------------------
    Property, plant and equipment                         5,980        6,110
    Intangible assets                                     3,979        4,284
    Goodwill                                              3,598        3,598
    Investments                                              25           25
    Deferred charges                                        128          321
    -------------------------------------------------------------------------
                                                         44,027       40,043
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities             15,106       11,373
    Current portion of long-term debt                       276          382
    -------------------------------------------------------------------------
    Total current liabilities                            15,382       11,755
    -------------------------------------------------------------------------
    Long-term debt                                          791          742
    Future income tax liabilities                           501          515
    -------------------------------------------------------------------------
                                                         16,674       13,012
    -------------------------------------------------------------------------
    Shareholders' equity
    Common shares                                       132,140      132,097
    Warrants                                              1,931        1,931
    Equity component of convertible debentures               46           46
    Contributed surplus                                   9,425        9,223
    Deficit                                            (115,317)    (115,372)
    Accumulated other comprehensive loss                   (872)        (894)
    -------------------------------------------------------------------------
    Total shareholders' equity                           27,353       27,031
    -------------------------------------------------------------------------
                                                         44,027       40,043
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    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,
                                                           2008         2007
                                                              $            $
    -------------------------------------------------------------------------
    Sales                                                14,931        7,603
    Cost of sales                                        11,765        5,540
    -------------------------------------------------------------------------
    Gross profit                                          3,166        2,063
    -------------------------------------------------------------------------

    Expenses
    Research and development                              1,013        1,007
    Selling and administrative                            1,534        1,486
    Amortization of intangible assets                       305          227
    Financial expenses                                      186           30
    Foreign exchange                                       (108)         245
    Interest income                                          (7)          (3)
    Stock-based compensation                                202           48
    -------------------------------------------------------------------------
                                                          3,125        3,040
    -------------------------------------------------------------------------

    Profit (loss) before income taxes                        41         (977)
    Income tax recovery                                     (14)           -
    -------------------------------------------------------------------------
    Net profit (loss) for the period                         55         (977)
    -------------------------------------------------------------------------

    Unrealized gain (loss) on translating financial
     statements of self-sustaining foreign operations        22          (67)
    -------------------------------------------------------------------------
    Comprehensive profit (loss) for the period               77       (1,044)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted profit (loss) per common share       0.00        (0.01)
    -------------------------------------------------------------------------
    Weighted average number of outstanding
     common shares                                  220,343,256  174,502,223
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
    (In thousands of Canadian dollars, except for number of shares)
    Unaudited

                                                                      Equity
                                                                   component
                                                                          of
                                                                 convertible
                                   Common shares       Warrants   debentures
    -------------------------------------------------------------------------

                            No. (000s)           $            $            $
    -------------------------------------------------------------------------
    Balance, April 30, 2007   174,502      125,631        1,311            -
    Stock-based
     compensation                   -            -            -            -
    Other comprehensive
     loss for the period            -            -            -            -
    Net loss for the period         -            -            -            -
    -------------------------------------------------------------------------
    Balance, July 31, 2007    174,502      125,631        1,311            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, April 30, 2008   220,312      132,097        1,931           46
    Issued upon conversion
     of convertible
     debentures                   354           43            -            -
    Stock-based compensation        -            -            -            -
    Other comprehensive gain
     for the period                 -            -            -            -
    Net profit for the period       -            -            -            -
    -------------------------------------------------------------------------
    Balance, July 31, 2008    220,666      132,140        1,931           46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                    Accumulated
                                                          other
                                                         compre-       Share-
                          Contributed                   hensive      holders'
                              surplus      Deficit         loss       equity
    -------------------------------------------------------------------------
                                    $            $            $            $
    -------------------------------------------------------------------------
    Balance, April 30, 2007     8,645     (108,951)        (917)      25,719
    Stock-based
     compensation                  48            -            -           48
    Other comprehensive
     loss for the period            -            -          (67)         (67)
    Net loss for the period         -         (977)           -         (977)
    -------------------------------------------------------------------------
    Balance, July 31, 2007      8,693     (109,928)        (984)      24,723
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Balance, April 30, 2008     9,223     (115,372)        (894)      27,031
    Issued upon conversion
     of convertible                 -            -            -           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
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    MITEC TELECOM INC.
    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of Canadian dollars)
    Unaudited                                     For the three months ended
                                                                     July 31,
                                                           2008         2007
                                                              $            $
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net profit (loss)                                        55         (977)
    Add items not affecting cash
      Amortization of property, plant and equipment,
       intangible assets and deferred charges               753          770
      Loss on disposal of property, plant and equipment       -           33
      Stock-based compensation                              202           48
      Accretion expense                                     128            -
      Income tax recovery                                   (14)           -
    -------------------------------------------------------------------------
                                                          1,124         (126)
    Changes in non-cash working capital balances
     related to continuing operations                    (2,416)      (1,631)
    -------------------------------------------------------------------------
    Cash flows used in operating activities              (1,292)      (1,757)
    -------------------------------------------------------------------------


    INVESTING ACTIVITIES
    Additions to property, plant and equipment and
     intangible assets                                     (149)         (32)
    Proceeds on disposal of property, plant and
     equipment                                                -           14
    Purchase of short-term investments                      (79)         (75)
    Sale of short-term investments                           77           75
    -------------------------------------------------------------------------
    Cash flows used in investing activities                (151)         (18)
    -------------------------------------------------------------------------


    FINANCING ACTIVITIES
    Repayment of long-term debt                             (94)        (127)
    -------------------------------------------------------------------------
    Cash flows used by financing activities                 (94)        (127)
    -------------------------------------------------------------------------
    Effect of exchange rate fluctuations changes
     on cash and cash equivalents                             -          (41)
    -------------------------------------------------------------------------

    Net increase (decrease) in cash and cash
     equivalents                                         (1,537)      (1,943)

    Cash and cash equivalents, beginning of the
     period                                               4,861        6,286
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of the
     period                                               3,324        4,343
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00002350EF




For further information:

For further information: Jeffrey Mandel, Director, Investor and
Corporate Relations, Mitec Telecom Inc., (514) 694-9000,
jeffrey.mandel@mitectelecom.com; Ms. Mary Anne Freedman, Freedman &
Associates, (416) 868-1500, mafreedman@freedmanandassociates.com

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