Intec reports 9 months revenues up 28%; cashflow and EBITDA positive

Turnover increases 28%; important new contracts signed; positive operating cash flow and EBITDA in quarter and year to date

Intec Telecom Systems PLC (“Intec” or “the Company”), a leading provider of telecoms Operations Support Systems (“OSS”), is pleased to announce its unaudited results for the nine months ended 30 June 2002. Against a challenging industry background, Intec reports revenues of £34.1 million, an increase of 28% over the equivalent period in 2001. In addition, through improvements in cost management, Intec has achieved both positive cash flow and positive EBITDA. Intec won a number of important new customers in the quarter, as well as significant new projects from existing customers. Revenues for the third quarter (“Q3”) were £10.9 million. Business won to date in Q4, together with current business forecasts, allow the Company, subject to the usual closure of ongoing contractual negotiations, to be cautiously confident of meeting consensus expectations for full-year results.

HIGHLIGHTS

• Turnover for the nine months ended 30 June 2002 increased by 28% to £34.1 million (9m 2001: £26.7 million).
  
• Recurring revenues of £14.3 million increased by 36% over 2001 and represent 42% of total revenues (9m 2001 – 39%).
  
• Earnings before interest, tax, depreciation, and amortisation (“EBITDA”) of £800,000 (9m 2001: £1.6 million).
  
• Goodwill impairment of £7.5 million recognised relating to 2001 Asia-Pacific and UK acquisitions; no further impairment identified on US acquisitions.
  
• Operating cash flows improve by £3.6 million - operating cash inflow of £0.8 million for the period compared to £2.8 million outflow in 2001.
  
• Investment in product development increases 51% to £6.0 million.
  
• Strong operating cash inflows in Q3 2002 of £1.5 million (Q3 2001: £2.2 million outflow); cash increases to £11.8 million from £11.0 million from previous quarter end.
  
• 13 new contracted installations in Q3, comprising 3 new InterconnecT family licences, 2 new Inter?mediatE licences, and 8 new InterconnecT CABS licences or service contracts. Major contracts won in the quarter to June 2002, including a first customer in Russia, VimpelCom, an extended installation at Maroc Telecom, and a new South American customer, Smartcom PCS.

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