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2465 Maryland Road
Willow Grove, PA 19090
Phone: (215) 658-8900
Fax: (215) 658-8968
Press Release
Contact: Jon Jensen FOR IMMEDIATE RELEASE
Phone: (215) 658-8900 6 PM EST, January 2, 2001
AMERIQUEST ANNOUNCES FOURTH QUARTER AND ANNUAL RESULTS
Willow Grove, Pennsylvania - January 2, 2001 - AmeriQuest Technologies, Inc.
(OTC BB: AMQT) today reported net sales of $16,553,000 for the fourth quarter
ended September 30, 2000, a decrease of 1% compared to $16,740,000 for the same
quarter last year. The net loss for the fourth quarter was $1,649,000 compared
to a net loss of $591,000 for the comparable period a year ago. The net loss
increased due to continued margin pressure in product sales revenue, costs
associated with a potential acquisition that has been abandoned, and increased
investment in the Company's Business Solution sales force. While the new sales
force has broadened marketing opportunities across several different market
segments, conversion of these opportunities to gross profit has not yet offset
the higher cost structure and investment associated with the new sales force.
Net sales for the year ended September 30, 2000 were $62,153,000, an increase of
9% compared to $56,865,000 in the previous fiscal year ended September 30, 1999.
The increase in net sales was a result of the Company's decision to focus on
business information solution selling during fiscal 2000. The net loss for the
year ended September 30, 2000 was $4,444,000 compared to a net loss of
$1,909,000 for the year ended September 30, 1999.
At September 30, 2000, the principal amount outstanding under its senior bank
line of credit was $5,269,000, but it has been reduced to approximately
$4,250,000 at December 29, 2000. The maturity date of the line of credit is July
20, 2001. The Company is in default under its financial covenants contained in
its credit
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AmeriQuest Technologies, Inc. Page 2
agreement. Those defaults are continuing and have not been waived, although the
Company is seeking a waiver.
In view of the loan covenant violations, the maturity date of the line of credit
and recurring losses from operations, the Company's independent public
accountants, Arthur Andersen LLP, have informed the Company that their opinion
on the Company's fiscal 2000 financial statements will include an explanatory
fourth paragraph raising substantial doubt about the ability of the Company to
continue as a going concern.
In commenting on the Company's performance, Alexander C. Kramer, Jr.,
AmeriQuest's President and Chief Executive Officer said, "The Company's
objective is to achieve long-term improvement in margin and product mix through
its Business Solutions sales force and its consultative selling method to large
corporate accounts. Additionally, the Company's Business Products sales force
has been refocused on those Value Added Resellers and System Integrators that
can provide the Company gross profits sufficient to justify the continuation of
their normal business credit terms."
AmeriQuest provides solutions to large corporate accounts, and product and
value-added services such as engineering design and system configuration,
installation capability, and marketing, financial and technical support, to
"value-added" resellers and systems integrators. AmeriQuest differentiates
itself in the marketplace by offering clients more than a wide variety of
products and product expertise. AmeriQuest enables clients to deliver all or
part of their total solution by offering technical expertise in UNIX, NT, LINUX,
network engineering, telephony, and applications focused around asset
management, ERP systems, Internet e-commerce solutions, high availability
servers, and thin client computing.
This press release contains forward-looking statements that involve a number of
risks and uncertainties. Among other factors that could cause the Company to
fail to meet its business objectives are general economic and business
conditions, the rate of growth in the computer industry, competitive factors and
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AmeriQuest Technologies, Inc. Page 3
pricing pressures, failure of the Company's sales force to generate enough high
margin sales to offset the higher cost structure of providing expert business
solutions, changes in margin and product mix, inventory risks due to shifts in
market demand, changes in agreements with manufacturers and master distributors
regarding the terms of product sales to the Company, changes in forecasted cash
needs and non-renewal of or changes in terms under the Company's senior bank
line of credit. Further information about these and other relevant risks and
uncertainties may be found in the Company's filings with the Securities and
Exchange Commission.
-End-
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AmeriQuest Technologies, Inc. Page 4
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Condensed Consolidated Statement of Operations
(unaudited)
(Amounts in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales................................. $16,553 $16,740 $62,153 $56,865
Net Loss.................................. $(1,649) $ (591) $(4,444) $(1,909)
Net Loss Per Common Share................. $ (0.02) $ (0.01) $ (0.07) $ (0.03)
Shares used in computing net loss
per Common Share.......................... 67,842 67,049 67,842 67,329
</TABLE>
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Selected Consolidated Balance Sheet Data
(unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
Total Assets....................................... $12,317 $14,168
======= =======
Line of Credit..................................... 5,269 2,443
Current Liabilities (excluding Line of Credit)..... 4,323 4,556
Stockholders' Equity............................... 2,725 7,169
------- -------
Total Liabilities and Equity....................... $12,317 $14,168
======= =======
</TABLE>
