FTG Farmstead Telephone Grp.

Farmstead Telephone Group, Inc. Reports Third Quarter 2003 Results EAST HARTFORD, Conn., Nov. 10 /PRNewswire-FirstCall/ -- Farmstead Telephone Group, Inc. announced operating results for the third quarter and nine months ended September 30, 2003. For the quarter ended September 30, 2003, revenues were $3,237,000, 32% below revenues of $4,766,000 reported for 2002. The net loss for the quarter was $149,000, or $(.05) per share, compared to a net loss of $284,000, or $(0.09) per share, in 2002. For the nine months ended September 30, 2003, revenues were $11,487,000, 26% below revenues of $15,557,000 reported for 2002. The net loss for the nine months was $426,000, or $(0.13) per share, compared to a net loss of $1,245,000, or $(0.38) per share, in 2002. The Company said the decrease in revenues reflects in part the continuing softness in capital spending for telecommunications products. George J. Taylor, Jr., Chairman and CEO of Farmstead Telephone, commented, "We continue to believe that our operating results for 2003 reflect in part the continuing soft market conditions for telecommunications products in the United States. We also experienced some turnover of sales personnel during the past year that impacted sales levels while we undertook the hiring and training of new salespersons. We have remained in a somewhat defensive posture, attempting to offset the financial impact of a reduced revenue stream by reducing, more tightly controlling, and deferring where possible, operating costs and expenses. As a result, although third quarter 2003 revenues were 32% lower than third quarter 2002 revenues, and 26% lower year-to-date, we managed to reduce our comparative net losses by 48% and 66%, respectively. We accomplished this through reducing our selling, general and administrative expenses by 20% quarter-over-quarter, and by 22% year-over-year, and by significantly increasing our profit margins from 22% to 29% quarter-over- quarter, and from 20% to 27% year-over-year, through new revenue opportunities such as selling Avaya maintenance contracts, personnel reductions, improved product buying and outsourcing equipment repair operations." Mr. Taylor continued, "Having made substantial progress in reducing costs and increasing profit margins, our primary business focus for the near term will center on strategies to increase sales revenues. This will include increasing our sales force so as to provide more coverage of existing and potential customers located within the market areas that we serve; broadening our product offerings; and increased marketing of Farmstead's products and capabilities, including our on-line ordering system." About Farmstead Farmstead Telephone Group, Inc. is an Avaya Inc. Gold Business Partner, and an Authorized Remarketing Supplier of Classic Avaya(TM) and new Avaya business communications products. Further information about Farmstead Telephone may be found at http://www.farmstead.com/. Farmstead Telephone Group Financial Highlights Quarter ended Nine months ended September 30, September 30, 2003 2002 2003 2002 Revenues $3,237,000 $4,766,000 $11,487,000 $15,557,000 Net Loss (149,000) (284,000) (426,000) (1,245,000) Basic and Diluted Net Loss Per Share $(0.05) $(0.09) $(0.13) $(0.38) Weighted Average Shares Outstanding: Basic and diluted 3,306,317 3,289,960 3,303,363 3,285,307 This release contains forward-looking statements that involve risks and uncertainties. In addition to historical information, investors should consider carefully the risks associated with an investment in the Company's securities as previously outlined by the Company in its prior filings with the Securities and Exchange Commission. CONTACT: George Taylor, Jr., Chairman and Chief Executive Officer Farmstead Telephone Group, Inc. Voice: 860-610-6006 Fax: 860-610-6001 DATASOURCE: Farmstead Telephone Group, Inc. CONTACT: George Taylor, Jr., Chairman and Chief Executive Officer of Farmstead Telephone Group, Inc., +1-860-610-6006 Web site: http://www.farmstead.com/

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