TXP Announces a 34% Increase in Revenue for the Fiscal Year Ended December 31, 2007
RICHARDSON, Texas, April 15 /PRNewswire-FirstCall/ -- TXP Corporation (BULLETIN BOARD: TXPO) , an Original Design Manufacturer (ODM) for the telecommunications industry, today announced financial results for the three and twelve months ended December 31, 2007.
 Recent Highlights:
- Revenue increased 34% for the twelve months ended December 31, 2007 compared to the twelve months ended December 31, 2006;
- Revenue decreased 9% for the three months ended December 31, 2007 due to $997,000 of one-time ONT development revenue recorded in the 4th quarter of 2006; excluding this revenue, TXP revenues increased 33% for the three months ended December 31, 2007 compared to the three months ended December 31, 2006
- Signed ONT distribution agreement with FONEX Data Systems
- Partnered with NorthStar Communications Group for retrofit installations
- Successfully reached interoperability with 16 global GPON Optical Line Terminal (OLT) providers
- Hired new Chief Operating Officer and new Controller and appointed new board member
Michael C. Shores, President and Chief Executive Officer of TXP, commented, "TXP continued its momentum during the fourth quarter and we achieved record revenue for the full year. Excluding the one-time ONT development revenue of $997,000 in 2006, revenue growth for the fourth quarter of 2007 was up approximately 33% to approximately $2.8 million versus the fourth quarter of 2006 and our customer base increased to 139 by the end of the fourth quarter of 2007 versus 110 in the fourth quarter of 2006. Our product and service offerings are all about supplying the telecom industry and high technology companies with technological design capabilities that (a) speed time-to-market for their products, (b) are cost effective, and (c) provide superior product innovation. We believe that our commitment to exceed our clients' expectations is helping us establish a reputation for quality, as is evidenced by our growing client list, repeat business and partnership agreements with high profile firms."
"On the partnership front, we recently signed a distribution agreement with FONEX Data Systems for the marketing of our Optical Network Terminal (ONT) solutions in Canada and France. FONEX provides telecommunications equipment worldwide and is focused on delivering optimized, purpose-built solutions for wireline and wireless operators. We are excited about this opportunity because our new 7200G family of mini-size, Power-over-Ethernet (POE) Gigabit Passive Optical Network (GPON) ONTs are only one quarter the size of current generation GPON ONTs, which we believe makes them ideally suited for FONEX's customers who are looking for an indoor ONT solution."
"We also partnered with NorthStar Communications Group for our retrofit solutions. We believe that NorthStar excels at delivering custom packaged services to meet the specific needs of carriers as their networks grow. Our retrofit kits enable customers to cost effectively upgrade their local access networks by retrofitting existing outside plant cabinets with new access systems, rather than going through the expensive and time consuming process of completely replacing the cabinets in which the access equipment is housed. TXP's retrofit solutions are typically 60-75% less than the cost of a new cabinet installation. NorthStar plans to add TXP's kits into its resale portfolio, offering customers a fully integrated hybrid solution consisting of products and services providing a seamless upgrade path for outside plant cabinet upgrades."
"Our prototype services business unit was the largest contributor to revenue in the fourth quarter of 2007 with approximately $2,000,000 in revenue compared to approximately $2,000,000 in the fourth quarter of 2006. For the fiscal year ended December 31, 2007 our prototype services business unit experienced growth of approximately 38% to approximately $8,525,000 versus approximately $6,202,000 in the fiscal year ended December 31,2006. We feel that our demonstrated ability to offer quick turnaround in prototype design and pre-production services is enabling us to add customers at a rapid pace."
Mr. Shores continued, "Our retrofit solutions, which provide an economically compelling alternative for telecom carriers who must overhaul their local access infrastructures, are also selling well. Revenue in this division increased by approximately 378% in the fourth quarter of 2007 to approximately $578,000 versus the fourth quarter of 2006. For the fiscal year ended December 31, 2007 revenue from our retrofit solutions business increased approximately 35% to approximately $1,387,000."
Mr. Shores continued, "Our ONT group continues to gain traction in the marketplace. ONTs provide the connectivity for "the last mile" enabling integrated voice, video and high-speed internet access in the home or business location. We made our first significant sales in Europe earlier this year and within the U.S. our family of ONTs are now interoperable across 16 OLT providers. We have begun shipping ONT products to three OEM customers after the successful completion of product trials that had been on-going since the latter half of 2007. Sales of Gigabit Passive Optical Network (GPON) ONTs in Europe are particularly strong as the region is quicker to adapt this new technology versus the U.S., however, we are now seeing increased interest in the U.S., as well."
Mr. Shores concluded, "Our customer base has increased from 110 at the end of the fourth quarter of 2006 to over 139 electronics and telecommunications companies in the fourth quarter of 2007. We are excited by the positive feedback and satisfaction level of our customer base and look forward to working with them and our partners in the months and years ahead."
On an annual basis our revenue increased to $11 million or approximately 34% compared to revenues of $8.2 million in 2006. Operating loss for the year ended December 31, 2007 was approximately $6.2 million, compared to operating loss of approximately $1.3 million for the same period last year. Net loss for the year was approximately $8.9 million, or $0.08 per share, compared to a net loss of approximately $4.6 million, or $0.05 per share, for the same period in 2006. The loss from 2007 included non-cash expenses of approximately $3 million including the "change in the fair value of the derivative financial instruments" that was attributable to the increase in the share price at year-end.
Full results are available in the company's annual report on Form 10-KSB for the twelve months ended December 31, 2007 that was filed with the Securities & Exchange Commission on April 14, 2008.
About TXP
TXP is an Original Design Manufacturer (ODM) for the telecommunications industry. Based in Richardson, Texas, TXP has three primary business units: TXP-Prototyping Solutions, TXP-ONT Solutions and TXP-Retrofit Solutions. TXP-Prototyping Solutions provides pre-manufacturing services for the electronics industry that help Original Equipment Manufacturers (OEMs) bring products to market both faster and more cost effectively. TXP-ONT Solutions develops and markets, via an ODM model, a line of Carrier-Class CPE products including home gateways and the world's broadest independent family of ONT products to both OEMs and ILECs. ONTs are used in FTTH-based services to terminate the passive optical network at the home or business location, and enable integrated voice, video and high-speed internet access. TXP-Retrofit Solutions provides custom engineered kits that enable ILEC's to upgrade their local access service delivery infrastructure at minimum cost and time, enabling a wide range of next generation telecom platforms to easily fit into the variety of remote OSP cabinets that have been broadly deployed over the last 30 years. For more information visit: http://www.txpcorp.com/
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this press release are "forward-looking statements" that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the company's filings with the Securities and Exchange Commission which may cause actual results, performance and achievements of the company to be materially different from any future results, performance or achievements expressed or implied.
                            (tables follow)
                            TXP CORPORATION
                      CONSOLIDATED BALANCE SHEETS
                       December 31, 2007 and 2006
                                                        2007      2006
                         ASSETS
 Current assets
   Cash                                              $210,000   $228,000
   Accounts receivable, net of allowance of
    $23,000 and $0 as of December 31, 2007
    and 2006, respectively.                         1,708,000    976,000
   Inventory                                        1,772,000    673,000
   Other current assets                               212,000    346,000
     Total current assets                           3,902,000  2,223,000
 Property and equipment, net                        2,641,000  2,667,000
 Other assets                                         140,000     13,000
     TOTAL ASSETS                                  $6,683,000 $4,903,000
           LIABILITIES AND STOCKHOLDERS' DEFICIT
 Current liabilities
   Current maturities of notes payable               $144,000   $272,000
   Current capital lease obligations                  120,000     46,000
   Lines of credit                                  3,300,000    400,000
   Current derivative financial instruments                 -  1,288,000
   Current convertible debentures, net of unamortized
    discount of $423,000 as of December 31, 2006            -    467,000
   Accounts payable                                 1,239,000    913,000
   Deferred revenue                                    17,000    332,000
   Accrued expenses                                   704,000    412,000
     Total current liabilities                      5,524,000  4,130,000
 Notes payable, net of current maturities                   -    144,000
 Capital lease obligations, net of current
  obligations                                         165,000     32,000
 Line of credit                                             -  1,000,000
 Convertible debentures, net of unamortized
  discount of $353,000 as of December 31, 2007      1,630,000          -
 Derivative financial instruments, net of current
  obligation                                        5,178,000  2,507,000
 Deferred tax liability                                48,000     48,000
   TOTAL LIABILITIES                               12,545,000  7,861,000
 STOCKHOLDERS' DEFICIT
   Common Stock , $.001 par value, 300,000,000
    authorized, 116,584,428 and 104,080,623 shares
    issued and outstanding as of December 31, 2007
    and 2006, respectively                            117,000    104,000
   Additional paid in capital                       8,133,000  2,121,000
   Accumulated deficit                            (14,117,000) (5,190,000)
   Accumulated other comprehensive income               5,000      7,000
     TOTAL STOCKHOLDERS' DEFICIT                   (5,862,000) (2,958,000)
     TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT   $6,683,000 $4,903,000
                 CONSOLIDATED STATEMENTS OF OPERATIONS
    Three Months and Twelve months ended December 31, 2007 and 2006
                           Three Months Ended     Twelve Months Ended
                               December 31             December 31
 Revenues                   2007       2006        2007       2006
   Prototyping and
    assembly            $1,034,000   1,263,000  $4,678,000  $3,842,000
   Material management
    services               977,000     746,000   3,847,000   2,360,000
   Retrofit Solutions      578,000     121,000   1,387,000   1,029,000
   Product and accessory
    sales                  203,000     --          327,000     --
   Design and development
    services                49,000     997,000     747,000     997,000
     Total Revenues      2,841,000   3,127,000  10,986,000   8,228,000
 Cost of sales           2,064,000   2,324,000   7,332,000   5,523,000
 Gross profit              777,000     803,000   3,654,000   2,705,000
 Costs and expenses
   Selling, general and
    administrative       1,598,000     954,000   5,090,000   3,834,000
   Research and
    development          1,299,000      52,000   4,578,000      52,000
   Depreciation             47,000      29,000     160,000      94,000
     Total costs and
      expenses           2,944,000   1,035,000   9,828,000   3,980,000
 Operating loss         (2,167,000)   (232,000) (6,174,000) (1,275,000)
 Other income and expense
   Interest expense, net  (519,000)   (228,000) (1,707,000)   (943,000)
   Change in fair value of
    derivative financial
    instruments         (3,091,000) (1,040,000) (1,050,000) (2,703,000)
   Other income             --          --          --         150,000
   Gain (loss) on early
    extinguishment of debt  --        (304,000)     --         161,000
   Gain on sale of
    fixed assets             2,000      --           4,000      18,000
     Total other income
      and expense       (3,608,000) (1,572,000) (2,753,000) (3,317,000)
 Income (loss) before
  income taxes          (5,775,000) (1,804,000) (8,927,000) (4,592,000)
 Federal Income tax
  expense                   --          --          --          --
 Net Income (loss)      (5,775,000) (1,804,000) (8,927,000) (4,592,000)
 Foreign currency
  translation adjustment    (2,000)     --          (2,000)     --
 Comprehensive Income
  (loss)               $(5,777,000) $(1,804,000) $(8,929,000) $(4,592,000)
 Basic earnings
  (loss) per share           $(.05)      $(.02)      $(.08)      $(.05)
 Diluted earnings
  (loss) per share           $(.05)      $(.02)      $(.08)      $(.05)
 Basic weighted average
  shares outstanding:  116,545,719 100,593,968 111,580,413  95,024,296
 Diluted weighted average
  shares outstanding:  116,545,719 100,593,968 111,580,413  95,024,296
 Media:                          Investor Relations:
 Paul Forzisi                    David K. Waldman / Klea K. Theoharis
 TXP Corporation                 Crescendo Communications
 (214) 575-9300                  (212) 671-1020
Source: TXP Corporation
