NORWOOD, MA, April 2, 2002 — Elcom International Inc. announced that subsequent to its sale of its IT products business in the U.S., it expects to be able to substantially reduce its costs and cash expenditures going forward as it repositions itself as a ‘pure play’ eProcurement Marketplace technology company. The company intends to leverage its channel partners as it concentrates on the government, utilities, and healthcare vertical markets going forward.
Robert J. Crowell, Elcom’s Chairman and CEO, said, “With the IT products business now behind us, Elcom can present itself as a single ‘pure play’ to the investment community and potential strategic partners. Indeed, we expect a much more favorable response from potential strategic investors without the perceived risks associated with an IT products-oriented line of business.”
Crowell further stated, “With the eProcurement Marketplace being the company’s core business moving forward, we expect our on-going non-cash operating costs to be substantially reduced with sequential quarterly improvement during the course of this year. With our available cash on hand and lower costs going forward, the company expects to have sufficient capital to fund operations through the third quarter without raising additional equity.” Indeed, with licensing revenue of approximately $2 million in the March (Q1) quarter and with the company’s IT products business having been disposed of, the company expects to report a relatively smaller net loss compared to last year’s quarter, as we approach our (much lower) break-even point.”
Crowell continued, “With the stock market’s current sensitivity, I believe the company’s stock is now so undervalued that, at these levels, I intend to purchase additional stock in the open market as soon as I am able.”
The company stated that Crowell cannot purchase any shares until three business days after the company reports it first quarter results, which are expected to be reported on or about April 30, 2002.
In addition, the company announced that the Government of Scotland’s eProcurement system is now live and operational. The company believes that this will accelerate the adoption rate amongst the Government of Scotland’s agencies, which will allow the company to report additional revenues during 2002. In addition, after over six months of intense effort, the company expects to announce its eProcurement system integrated with GE Capital Financial, Inc.’s (“GECF”) ePcard XML ‘virtual’ procurement card technology at GECF’s Annual Users Conference, which is being held in Salt Lake City from April 21-25, 2002. This will be the first time that Elcom has demonstrated this integrated system to a large number of users and believes this integrated system will enable the company to generate incremental eProcurement Marketplace licenses during 2002.”
Subsequent to the sale of its IT products business in the U.S., the company stated that it is working closely with its investment banker to position the company as a pure play technology business and seek a strategic investor which can use and leverage the company’s eProcurement Marketplace technology.
About Elcom International, Inc.
Elcom International, Inc. (Nasdaq: ELCO), operates two wholly-owned subsidiaries: elcom, inc., a leading international provider of remotely-hosted eProcurement and Private eMarketplace solutions and Elcom Services Group, Inc., which is managing the transition of the recent sale of certain of its assets and the assignment of customers to ePlus.
elcom, inc.’s remotely-hosted technology establishes the next standard of value and enables enterprises of all sizes to realize the many benefits of eProcurement without the burden of significant infrastructure investment and ongoing content and system management.
PECOS Internet Procurement Manager, elcom, inc.’s remotely-hosted eProcurement and eMarketplace enabling platform was the first “live” remotely-hosted eProcurement system in the world. Additional information can be found at www.elcominternational.com.