Axesstel, Inc. (AXST.OB) Posts Q2 Results; Hints at Positive Second Half for 2010

QualityStocks would like to highlight Axesstel, Inc., (OTCBB: AXST). Axesstel provides fixed wireless voice and broadband access solutions for the telecommunications market worldwide.

In the company’s news yesterday,

Axesstel posted its second quarter and six-month financial results for the period ended June 30, 2010, highlighting its focus for the second half of 2010.

The company reported revenues for the second quarter of 2010 at $11.2 million, as compared to $11.9 million reported for the same quarter of 2009; net loss for the second quarter was $1.4 million, or $0.06 loss per share, compared to a net loss of $2.2 million, or $0.09 per share, for the comparable quarter of last year.

Gross margin for the second quarter 2010 was $2.0 million, or 18 percent of revenue, compared to $2.8 million, or 23 percent of revenue for the same period last year.

“As expected, the second quarter has been a transitional quarter. We continued to execute on our four key initiatives to drive sales in our core markets, increase margins and improve our performance in the second half of 2010,” Clark Hickock, CEO of Axesstel, stated in the press release.

Hickock said the company is preparing to commercially launch its re-engineered, lower cost lines of phones and modems; expand broadband modem sales in North America; increase sales of 3G data and VoIP gateways in Europe; and expects to realize approximately $4 million of annualized operating expense savings in 2010, a reduction of more than 20 percent compared to last year.

For the six months ended June 30, 2010, the company reported revenue of $26.7 million, as compared to $25.6 million for the first half of 2009; net loss for the first half of 2010 was $2.8 million, or $0.12 per share, compared to a net loss of $4.4 million, or $0.19 per diluted share, in the prior year’s first half.

As of June 30, 2010, the company had cash and cash equivalents balance of $770,000, compared to $602,000 as of December 31, 2009.

Pat Gray, Axesstel’s CFO, said the company believes it is set to achieve a solid second half of 2010, backed by efforts made on the backend.

“We believe our cost savings and financing activities have positioned us well for the second half of the year. Second quarter operating expenses were at the lowest level in the past five years on a quarterly basis. We completed the transition of our research and development activities to China ahead of schedule, which will further reduce operating expenses in the second half of the year. We continue to target profitability at approximately $60 million of annual revenue, subject to gross margins returning to the low twenties,” Gray stated.

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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.