FTG Farmstead Telephone Grp.

Farmstead Telephone Group, Inc. Reports Third Quarter 2004 Results EAST HARTFORD, Conn., Nov. 12 /PRNewswire-FirstCall/ -- Farmstead Telephone Group, Inc. (AMEX:FTG) announced operating results for the third quarter and nine months ended September 30, 2004. For the quarter ended September 30, 2004, revenues were $3,338,000, 1% higher than revenues of $3,295,000 reported for 2003. The net loss for the quarter was $175,000, or $(0.05) per share, compared to a net loss of $149,000, or $(0.04) per share, in 2003. For the nine months ended September 30, 2004, revenues were $9,633,000, 17% below revenues of $11,669,000 reported for 2003. The net loss for the nine months was $930,000, or $(0.28) per share, compared to a net loss of $426,000, or $(0.13) per share, in 2003. The Company attributed these operating results to increased competition contributing to sales price and profit margin erosion, sales force turnover, and a continuing cautious capital equipment-spending environment. Jean-Marc Stiegemeier, newly-hired President and CEO commented, "The results of the third quarter were encouraging, to the extent that revenues held consistent with the prior period third quarter, and that third quarter revenues were 16% higher than second quarter revenues. For the first time in over three years revenues were higher in the current quarter when measured against the comparable prior year quarter. The increased third quarter loss as compared to the prior year third quarter loss was a result of increased spending in SG&A to begin positioning the company for revenue growth and profitability. Current initiatives include; rebuilding the Company's sales organization, strategically redirecting the business consistent with the current paradigm shift in the telecom industry and evaluating certain targeted acquisition candidates. To assist in this process the company has retained the services of an experienced telecom advisor. The execution of our new business model has begun, and we are confident that these current initiatives and the continued execution of this plan will provide our shareholders improved results in Q4 and beyond." About Farmstead Farmstead Telephone Group, Inc. is an Avaya Inc. Gold Business Partner, selling both new and refurbished Avaya business communications products nationwide. 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, 2004 2003 2004 2003 Revenues $3,338,000 $3,295,000 $9,633,000 $11,669,000 Net Loss (175,000) (149,000) (930,000) (426,000) Basic and Diluted Net Loss Per Share $(0.05) $(0.04) $(0.28) $(0.13) Weighted Average Shares Outstanding 3,316,634 3,306,317 3,314,985 3,303,363 This news release contains statements based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions, which are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words "believe", "will be", "will continue", "will likely result", "anticipates", "seeks to", "estimates", "expects", "intends", "plans", "predicts", "projects", and similar words, expressions or phrases of similar meaning. Investors are cautioned that all forward-looking statements are subject to certain risks and uncertainties which are difficult to predict and which could cause actual results to differ materially from those projected. For a description of such risks and uncertainties, see the reports filed by Farmstead with the Securities and Exchange Commission. Farmstead disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. CONTACT: Jean-Marc Stiegemeier, Chief Executive Officer Farmstead Telephone Group, Inc. Voice: 860-610-6033 Fax: 860-610-6001 DATASOURCE: Farmstead Telephone Group, Inc. CONTACT: Jean-Marc Stiegemeier, Chief Executive Officer of Farmstead Telephone Group, Inc., +1-860-610-6033 Web site: http://www.farmstead.com/

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