SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) MAY 13, 2004 --------------------- MICROTEL INTERNATIONAL, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 001-10346 77-0226211 ---------------------------- --------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 9485 HAVEN AVENUE, SUITE 100, RANCHO CUCAMONGA, CALIFORNIA 91730 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (909) 987-9220 ------------------------------ NOT APPLICABLE -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The information contained in this Item 12 is being "furnished to" the SEC in accordance with SEC Release Nos. 33-8216 and 34-47226 and shall not be deemed "filed with" the SEC for purposes of Section 18 of the Securities Exchange of 1934, as amended, or otherwise subject to the liabilities of that section. The information contained in this Item 12 shall not be deemed incorporated by reference into any registration statement, proxy statement or other report except as shall be expressly set forth by specific reference in such filing and regardless of any general incorporation language in such filing. On May 13, 2004, MicroTel International Inc. (the "Company") issued a press release describing selected financial results of the Company for the first quarter of 2004. A copy of the press release is set forth below in its entirety: MICROTEL INTERNATIONAL INC. REPORTS 6TH CONSECUTIVE PROFITABLE QUARTER FOR FIRST QUARTER OF 2004 SALES ARE UP 9% AND NET PROFIT IS UP 59% FROM 1ST QUARTER, 2003 RANCHO CUCAMONGA, CALIFORNIA, May 13, 2004 - MicroTel International Inc. (OTCBB: MCTL), an international manufacturer of defense and aerospace electronic components and telecommunications equipment, today announced that for the first quarter of 2004 it recorded net income of $70,000 or zero cents per share as compared to $44,000 or zero cents per share in the first quarter of 2003, a 59% improvement. Net sales for the first quarter of 2004 increased by $524,000 or 9% to $6,192,000 compared to net sales of $5,668,000 for the first quarter of 2003. The increase resulted from increases in net sales of both the Company's electronic components segment for the aerospace and defense markets and communications equipment segment. Randolph D. Foote, MicroTel's CFO, said: "We improved sales in both our segments which, along with much higher gross profit margins, up from 38% to 44%, provided the basis for our 59% improvement in net income in the first quarter of 2004 as compared to the first quarter of 2003. We improved our net income in spite of incurring higher marketing expenses and other operational investments to provide for future growth together with higher investor relations expenses. Our cash position and working capital remained strong at $1,076,000 and $5,686,000, respectively. In addition, our backlog remained substantial at $9,830,000." Carmine T. Oliva, chairman, president and CEO of MicroTel International Inc., stated: "We experienced greater than planned revenue in our defense and aerospace Electronic Components business segment and also produced increased sales in our Communications Equipment segment from the first quarter of 2004 in comparison to the first quarter of 2003. Our gross margin improvement from 38% in 2003 to 44% in 2004 is very significant and we believe we are on track for higher levels of profitability in the subsequent quarters of 2004 than in the first quarter." -MORE- 2 ABOUT MICROTEL MicroTel International Inc. is an international manufacturer of defense and aerospace electronic components and subsystems and communication equipment. Our electronic components group, which includes XET Corporation and its international subsidiaries, provides custom power conversion products, digital and rotary switches and subsystem assemblies to the global electronic components market and are primarily used for defense, aerospace and industrial applications. Our communications group, consisting of CXR Telcom Corporation and CXR Anderson Jacobson, provides network access, transmission and test equipment to the North American and European communications industry. Founded in 1983, MicroTel operates out of facilities in the United States, United Kingdom, France and Japan. As of April 30, 2004, we had a total of 181 employees in our various subsidiaries and divisions. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 -------------------------------------------------------------------------------- With the exception of historical information, the matters discussed in this press release are forward looking statements that involve a number of risks and uncertainties. The actual future results of MicroTel could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability of MicroTel to match or improve its first quarter 2004 financial performance in subsequent quarters of 2004 and those factors contained in the "Risk Factors" Section of the Company's Form 10-K for the year ended December 31, 2003. -TABLES FOLLOW- 3 MICROTEL INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended March 31, 2004 2003 --------------------------------------- (in thousands except per share amounts) Net sales $ 6,192 $ 5,668 COST OF SALES 3,445 3,527 -------- -------- Gross profit 2,747 2,141 Operating expenses: Selling, general and administrative 2,217 1,698 Engineering and product development 283 221 -------- -------- Income from operations 247 222 Other expense Interest expense (96) (96) Other income (6) (14) -------- -------- Income before income taxes 145 112 INCOME TAX EXPENSE 75 68 -------- -------- Net income 70 44 ======== ======== Income per share: Basic $ 0.00 $ 0.00 ======== ======== Diluted $ 0.00 $ 0.00 ======== ======== 4 MICROTEL INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2004 2003 --------- --------- Current assets: Cash and equivalents $ 1,076 $ 1,174 Accounts receivable 4,712 5,393 Inventories 6,577 6,683 Prepaid expenses and other 538 555 --------- --------- Total current assets 12,903 13,805 Property, plant and equipment, net 401 322 Goodwill, net 2,475 2,447 Other assets 561 595 --------- --------- $ 16,340 $ 17,169 ========= ========= Liabilities and stockholders' equity: Current liabilities: Notes payable $ 2,320 $ 2,882 Current portion of long-term debt 285 316 Accounts payable 1,432 1,637 Accrued expenses 3,180 3,274 --------- --------- Total current liabilities 7,217 8,109 Long term debt, less current portion 842 819 Other liabilities 296 325 --------- --------- Total liabilities 8,355 9,253 --------- --------- Convertible redeemable preferred stock Stockholders' equity Preferred stock 1 4 Common stock 77 77 Additional paid in capital 25,617 25,613 Accumulated deficit (17,816) (17,886) Accumulated other comprehensive income 106 108 --------- --------- Total stockholders' equity 7,985 7,916 --------- --------- $ 16,340 $ 17,169 ========= ========= 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 14, 2004 MICROTEL INTERNATIONAL INC. By: /s/ RANDOLPH D. FOOTE ------------------------------------------- Randolph D. Foote, Chief Financial Officer 6