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Coyote Reports Record Revenues in 2nd Quarter

November 24, 1998

Coyote Network Systems in Westlake Village reported record revenue of $15.1 million for the second quarter that ended Sept. 30, compared with $106,000 for the same quarter a year earlier.

The results include its telecom equipment subsidiary Coyote Technologies, its network service company American Gateway Telecommunications and Coyote Network Systems' corporate headquarters.

The company completed the acquisition of INET, a network services company, late in the second quarter and will consolidate INET's results beginning with the third quarter.

Despite the record revenue, Coyote had a net loss of $1.3 million or 14 cents per share for the quarter, compared with a loss of $8.7 million or $1.27 per share a year earlier.

"While the majority of the revenue was still from [telecom] equipment sales, we expect network services--through internal growth and acquisitions--to represent a greater portion of our business going forward," said James J. Fiedler, Coyote chairman and chief executive officer.

In September, the company acquired a 20% equity interest in Crescent Communications, a wholesale telecom service provider to select major international markets. Coyote also announced a plan to take a 19% equity position in DTA Communications Network, a provider of wholesale international long-distance services.

The company's board of directors approved a 5% stock dividend, which was distributed Nov. 4.

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