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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR INVESTOR RELATIONS INFORMATION, CONTACT:
Qorvis Communications
Karen Vahouny, 703-744-7809; email: [email protected]
TRANSCRYPT REPORTS THIRD QUARTER RESULTS
LINCOLN, NE - November 7, 2000 - Transcrypt International, Inc. (OTC Bulletin
Board: TRII) today announced financial results for the quarter ended September
30, 2000. The Company reported a net loss of $1.5 million, or $0.11 per share,
in the third quarter of 2000 compared to net income of $149,000, or $0.01 per
share, in the prior year's third quarter. Revenues for the third quarter of this
year were $11.7 million compared to $15.3 million in the same quarter of 1999.
The decrease in revenues between periods was largely due to a drop in sales
associated with systems installation projects in EF Johnson, as well as the fact
that last year's third quarter had included $600,000 of Year 2000 upgrade
revenues. Revenues for Transcrypt Secure Technologies increased from $1.3
million in the third quarter of fiscal 1999 to $2.1 million in the same quarter
of 2000. Revenues for EF Johnson were $9.6 million for the third quarter of
fiscal 2000 compared to $14 million for the same quarter of the previous year.
For the first nine months of 2000, the net loss was $7.3 million, or $0.56 per
share, versus a net loss of $4.1 million, or $0.32 per share, for the first nine
months of 1999. Excluding the positive benefit of litigation reserve
adjustments, the net loss for the first nine months of 2000 was $7.7 million, or
$0.59 per share, compared to a net loss of $6.4 million, or $0.49 per share, in
the first nine months of 1999. Revenues were $34.9 million in the first nine
months of 2000 versus $37.8 million in the first nine months of the prior year.
At September 30, 2000, Transcrypt had $13.3 million in cash, of which $10.0
million is pledged to secure the Company's $10.0 million bank line of credit. At
September 30, 2000, Transcrypt had $7.9 million outstanding under the line of
credit. In addition, Transcrypt had $72,000 in long term debt at September 30,
2000.
According to Michael F. Jalbert, chairman and chief executive officer, "Our
shift from older products to the new generation of wireless communications has
continued to adversely affect our operating results, particularly our ability to
generate revenue growth at EF Johnson. It's important to note that our EF
Johnson gross margins have been improving dramatically this year, moving from
3.9% in the first quarter to 11.9% in the second quarter and up to 21.5% in this
quarter."
Jalbert notes, "Our decision to eliminate unprofitable or marginal product lines
will not only reduce costs, but it will ensure that our sales and marketing
efforts are aligned with our highest potential products. We believe that this
restructuring should produce revenue growth in future periods, and enhance our
prospects for achieving profitability and delivering shareholder value."
Transcrypt International, Inc. (WWW.TRANSCRYPT.COM) designs, manufactures and
markets trunked and convention radio systems, stationary land mobile radio
transmitters and receivers, including mobile and portable radios, and
manufactures information security products that prevent the unauthorized
interception of sensitive voice and data communication.
Certain matters discussed in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements relate to the restructuring and
realignment of product lines and its anticipated impact on future operating
results. These forward looking statements are subject to certain risks and
uncertainties that could cause the actual results, performance or achievements
to differ materially from those expressed, suggested or implied by the
forward-looking statements due to the number of risk factors. These factors
include, but are not limited to, the timing of the full implementation of the
restructuring plan, the level and mix of product sales, price and product
competition, changes in technology, availability and sources of cash and
funding, and other risks detailed in the Company's reports filed with the
Securities & Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 1999.
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TRANSCRYPT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2000 and 1999
(Unaudited and in thousands, except share and per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 11,664 $ 15,323 $ 34,939 $ 37,760
Cost of sales 8,098 9,917 27,786 26,298
------------ ------------ ------------ ------------
Gross profit 3,566 5,406 7,153 11,462
------------ ------------ ------------ ------------
Operating expenses:
Research and development 1,417 1,220 4,377 4,445
Sales and marketing 1,708 1,885 5,241 6,006
General and administrative 2,009 2,287 6,180 7,381
Restructuring charge -- -- -- 523
Provision for litigation settlement -- -- (387) (2,221)
------------ ------------ ------------ ------------
Total operating expenses 5,134 5,392 15,411 16,134
------------ ------------ ------------ ------------
Income (loss) from operations (1,568) 14 (8,258) (4,672)
Other income (expense) 33 (33) 662 256
Interest income 210 263 688 667
Interest expense (155) (95) (417) (395)
------------ ------------ ------------ ------------
Income (loss) before income taxes (1,480) 149 (7,325) (4,144)
Income tax benefit -- -- -- --
------------ ------------ ------------ ------------
Net income (loss) $ (1,480) $ 149 $ (7,325) $ (4,144)
============ ============ ============ ============
Net income (loss) per share - Basic and Diluted $ (0.11) $ 0.01 $ (0.56) $ (0.32)
============ ============ ============ ============
Weighted average common shares - Basic 13,731,297 12,946,624 12,997,555 12,946,624
============ ============ ============ ============
Weighted average common shares - Diluted 13,731,297 13,203,130 12,997,555 12,946,624
============ ============ ============ ============
</TABLE>
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TRANSCRYPT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2000 and December 31, 1999
(in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
-------- --------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,270 $ 21,571
Accounts receivable, net 6,701 12,675
Receivables - other 561 316
Cost in excess of billings on uncompleted contracts 1,818 2,298
Inventory 15,783 16,447
Prepaid expenses 537 500
Deferred tax assets 2,395 2,395
-------- --------
Total current assets 41,065 56,202
Property, plant and equipment, net 2,513 3,766
Deferred tax assets 9,981 9,981
Intangible assets, net 14,031 15,011
Other assets 546 561
-------- --------
$ 68,136 $ 85,521
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 7,950 $ 5,809
Current portion of long-term debt 43 116
Accounts payable 6,595 8,514
Billings in excess of cost on uncompleted contracts 1,178 5,116
Deferred revenue 589 4,090
Accrued expenses 3,273 5,764
-------- --------
Total current liabilities 19,628 29,409
Provision for litigation settlement 4,197 5,996
Long-term debt, net of current portion 29 197
Deferred revenue 450 633
-------- --------
24,304 36,235
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock -- --
Common stock 143 130
Additional paid-in capital 92,188 90,331
Accumulated deficit (48,499) (41,175)
-------- --------
43,832 49,286
-------- --------
$ 68,136 $ 85,521
======== ========
</TABLE>
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