Farmstead Telephone Group, Inc. Reports Year-End and Fourth Quarter Results EAST HARTFORD, Conn., March 26 /PRNewswire-FirstCall/ -- Farmstead Telephone Group, Inc. announced operating results for the year and fourth quarter ended December 31, 2003. For the year ended December 31, 2003 revenues were $14,680,000, 23 percent below revenues of $19,150,000 reported for 2002. The net loss for the year was $709,000, or $(.21) per share, compared with a net loss of $2,530,000, or $0.77 per share, in 2002. The Company reported an 11 percent decrease in revenues for the fourth quarter, totaling $3,193,000, compared with revenues of $3,593,000 reported for the fourth quarter of 2002. For the quarter, the Company reported a net loss of $283,000 or $(.09) per share, compared with a net loss of $1,285,000, or $0.39 per share, during the same period in 2002. The net loss for the fourth quarter and full year 2002 included $889,000 in non-cash charges, consisting of $455,000 to provide a full valuation reserve against deferred tax assets, $333,000 in inventory valuation charges, and a $101,000 charge to write off all goodwill arising from the acquisition of InfiNet Systems LLC. The Company attributed the declines in revenues to continued softness in corporate buying in the telecom equipment sector. George J. Taylor, Jr., Chairman and President of Farmstead Telephone, commented, "as our financial results indicate, our revenues continued to decline, although at a much slower rate. We attribute the revenue decline primarily to continued softness in corporate buying in the telecommunications equipment sector. Many corporations, faced with a sluggish economy and a downturn in their own financial performance, simply reduced their capital expenditures. These events triggered a defensive strategy on our part, with particular emphasis placed on margin and cost containment as we attempted to restructure the Company to drive down its cost of operations at reduced revenue run rates. As a result of our efforts, despite a 23% decline in 2003 revenues from 2002, we managed to reduce our comparative net loss by 72%." Mr. Taylor continued, "Farmstead has chosen to focus on three core areas - -Avaya parts, Avaya systems and associated applications, and Avaya services -- all wrapped into an e-commerce framework. While stability is not assured given the uncertainties of business and the economy today, we have made every effort to manage the cost and margin sides of our business. We expect these effortsto put us on a path of growth and profitability in the years ahead." 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/. CONTACT: George Taylor, Jr., Chairman and Chief Executive Officer Farmstead Telephone Group, Inc. Voice: 860-610-6006 Fax: 860-610-6001 Farmstead Telephone Group Financial Highlights Quarter Ended December 31, Year Ended December 31, 2003 2002 2003 2002 Revenues $3,193,000 $3,593,000 $14,680,000 $19,150,000 Net Loss (283,000) (1,285,000) (709,000) (2,530,000) Basic and Diluted Net Loss Per Share$ (.09) $(0.39) $(.21) $(0.77) Basic and Diluted Weighted Average Shares Outstanding: 3,311,601 3,298,958 3,305,439 3,288,748 This release contains forward-looking statements that involve risks and uncertainties. In addition to historical information, investors should consider carefully the risks associatedwith an investment in the Company's securities as previously outlined by the Company in its prior filings with the Securities and Exchange Commission. 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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