In the view of multiple computer industry leaders and analysts, IA will drive the next wave of consumer demand. Unlike general-purpose computers, IA’s are networked, intelligent devices that perform specific tasks, and are reasonably intuitive and inexpensive. People are already enjoying the benefits of AMX and PHAST (a wholly owned subsidiary of AMX) networked appliances in their homes, accessing their technology via the Internet. Homeowners can click on their personal "home page" from the office to check the security system, raise the home temperature, start the hot tub, close the pool cover, turn on the outside lighting, or even watch the NannyCam. AMX Internet technology will expand the intimacy of the owner/home relationship, so that the system can send home information e-mails or text paging automatically, and wall and touch panels integrate Web information with home automation. As a leader in home integration technology, AMX is now bringing the Web home.

AMX’s introduction of WebHome technology is not a random or unexpected event. AMX has been laying the foundation for several years, developing a number of successful TCP/IP client/server applications. PHAST systems are networked via PHASTLink, a data bus driven by Echelon technology. In addition, over fifty leading home automation companies including Lutron and Leviton, have become PHAST P3 partners, enabling plug-and-play connectivity over the PHASTLink data bus. In addition, AMX has been an active partner in forward-thinking groups such as Digital Harmony IEEE-1394, HomeRF, and HomePNA, taking a leadership role in advancing standards for home interoperability and networking.

"The home automation systems currently being successfully installed by AMX and PHAST, are the best on the market, as evidenced by our growth and the numerous industry awards we have received. Our WebHome product strategy, while revolutionary in some respects, is merely a logical extension of some of our core capabilities," said Joe Hardt, CEO of AMX Corporation. "The product development initiatives we are undertaking, coupled with the commitment of John McHale, a documented visionary in the data networking and ADSL world, puts AMX in an enviable position. At the same time, we will be expanding our innovation and support in our core commercial and international business, and fully expect to leverage the benefits of IA technology into our traditional markets and distribution channels as well."

States Scott Miller, founder and board member of AMX Corporation, "As the founder and largest shareholder of AMX, I am very pleased with these developments. John McHale’s track record in identifying technology opportunities, as well as his considerable financial commitment to AMX, provides for tremendous competitive advantage, which will benefit all of our dealers, shareholders, employees and customers worldwide."

The Company also announced that its third quarter revenues for the quarter ending December 31, 1998, were $18.5 million, up 23% from $15.1 million during the same quarter last year. Year-to-date revenues were $52.7 million, up 23% for the same period last year. The Company included special charges of $1.2 million, net of taxes, equivalent to $0.14 per share (diluted) in its third quarter. Net income exclusive of these charges would have been $1.4 million, or $.16 per share (diluted). Net income for the quarter was $142,340, or $.02 per share (diluted), compared to a loss of $.09 per share (diluted) for the same quarter last year. Year-to-date net income was $1.8 million, or $.21 per share (diluted). The special charges incurred during the third quarter consisted mostly of the write-off of inventory for products discontinued this quarter, which were charged to cost of goods sold. The discontinued products were primarily from the Company’s former subsidiary, AudioEase Corporation. The Company also recognized losses on bad debts, and wrote off development costs on discontinued projects.