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EARNINGS

StarTel's Net for Year Drops; Revenues Up 10%

March 09, 1986

StarTel Corp. of Irvine, makers of computer products that interface with telephones and other telecommunications systems, said Friday that net income fell last year to $70,000 from $638,000 the prior year when it had a $202,000 tax credit.

Revenues for the year were $11 million, a 10% increase over $10 million in revenues the previous year.

StarTel started out 1985 sluggishly, but record revenues in the fourth quarter helped the company hit black ink. Net income for the quarter ended Dec. 31 rose 87% to $219,000 from $117,000 earned in 1984's last quarter. Revenues hit $3.2 million, a 14% increase over $2.8 million in sales for the same period a year earlier.

"We are entering 1986 debt free and with cash of $1.3 million, so we are well positioned for future growth," said Don M. Berry, chairman and chief executive officer of StarTel. "We are continuing to invest heavily in our future, with (research and development) expenditures up nearly 40% to $1.2 million in 1985."

The research and development costs and other expenses incurred in the first part of the fiscal year were the primary causes for the drop in income, said Thomas L. Schauer, vice president of finance.

Berry said the company was beginning to penetrate new markets--hospitals, executive suites and telemarketing--for its messaging systems.

StarTel, which was formed in 1980 and went public in the fall of 1983, makes and markets messaging systems with integrated voice, data and network capabilities.

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