Gain Results in Net Income of $9.6 million or $1.34 Basic Earnings Per Share
SAN ANTONIO, Oct 25, 2005 (PRIMEZONE via COMTEX) -- ATSI Communications, Inc. (OTCBB:ATSX) today announced annual results for its fiscal year 2005 that ended July 31, 2005. Revenues for the year were $6 million, a 379% increase over revenues of $1.2 million for the previous fiscal year ended July 31, 2004. Due to increased revenues and operating efficiencies as well as the recording of the one-time gain, net income for the year ended July 31, 2005 was $9.6 million or $1.34 basic earnings per share based on the weighted average of common shares outstanding vs. a net loss of $8.8 million or ($7.31) basic loss per share based on the weighted average of common shares outstanding for the previous year ended July 31, 2004. In addition to significantly improving its financial position, the Company has met other key corporate objectives while successfully reaching internal milestones of its business model. Management believes these important accomplishments have strengthened the Company's foundation, thus facilitating future improvement in shareholder value.
The following is a summary of the significant achievements for the year:
-- NASD approval for trading on the OTC Bulletin Board. ATSI commences trading under the symbol ATSX.OB
-- $14.3 million reduction in liabilities
-- 4 consecutive quarters of record revenue since the Company's reincorporation: +1022% growth in 1st quarter + 506% growth in 2nd quarter + 220% growth in 3rd quarter + 405% growth in 4th quarter
-- ATSI acquired assets from Hispanic-based Competitive Local Exchange Carrier ("CLEC") and launches Telefamilia initiative. Positions Hispanic focused subsidiary for implementation of a hybrid VoIP strategy utilizing ATSI's low-cost VoIP network
-- Settlement and/or dismissal of various litigation matters consisting of $2.5 million in claims and attorney fees
-- ATSI expands its VoIP network by 50% with NexTone Communications to support future products and growth
Arthur L. Smith, CEO of ATSI stated, "We achieved improved performance in all areas of our business during FY2005. We are starting FY2006 strong and expect the 1st quarter of FY2006 to be the 5th consecutive quarter of record revenues since our reincorporation. We also anticipate notable balance sheet improvements over the next 2 quarters." Mr. Smith added, "We were able to put some time-consuming corporate items, including several litigation matters, behind us in FY2005. Going forward, not only will we reduce our professional and legal fees, but we will shift resources to the Company's operations." Excluding non-cash items, net loss for the year ended July 31, 2005 was $587,000 vs. a net loss of $704,000 for the previous year ended July 31, 2004. For the year the Company incurred $1,521,000 in non-cash compensation and warrant expense. Additional non-cash items incurred during the quarter include depreciation and amortization expense, interest expense, and preferred dividend expense. The gain of $12.1 million on disposal of investment is a non-cash item.
The Company incurred $417,000 in legal and professional fee expenses for the year related to litigation matters and one-time investor awareness campaigns. Due to the settlement and/or dismissal of various litigation matters, management expects a significant reduction in legal and professional fees during its current fiscal year.
Net loss before non-cash items is not a term defined by generally accepted accounting principles (GAAP) and may not be comparable to other similarly titled measurements used by other companies. Such non-GAAP measures should be considered in addition to, and not as a substitute for, performance measures calculated in accordance with GAAP. The accompanying table includes a detailed reconciliation of net loss reported in accordance with GAAP to net loss before non-cash items.
ATSI Communications, Inc. is an emerging global VoIP carrier serving rapidly expanding markets in Asia, Europe, the Middle East, and Latin America, with an emphasis on Mexico. ATSI believes that it has clear advantages over its competition through its strategic partnerships with established foreign carriers and network operators, interconnection and service agreements, and its unique concession license in Mexico.
Except for the historical information contained herein, the matters discussed in this release include certain forward-looking statements, which are intended to be covered by the safe harbor provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We have identified forward-looking statements by using words such as "expect," "believe," "should," "may," "intend," and "anticipate" or words of similar import. Those statements include, but may not be limited to, all statements regarding our management's intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. Although we believe our expectations are reasonable, our operations involve a number of risks and uncertainties, and these statements may turn out not to be true. These risks and uncertainties include the assumption that we will continue as a going business; our inability to predict or anticipate changes in regulations or the actions of domestic and foreign governments; and the continued availability of funds in amounts and on acceptable terms. More detailed information about ATSI Communications, Inc. is available in the Company's public filings with the Securities and Exchange Commission. We believe that the assumptions underlying the forward- looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. All forward-looking statements made in this release are based on information presently available to our management. We assume no obligation to update any forward-looking statements, except as required by law.
ATSI COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
OPERATING EXPENSES: Cost of services (exclusive of depreciation and amortization, shown below) 5,664 1,071 Selling, general and administrative 517 584 Legal and professional fees 417 303 Non-cash issuance of common stock and warrants for services 1,047 7,055 Non-cash stock-based compensation, employees 474 -- Impairment expense -- 702 Bad debt expense 4 4 Depreciation and amortization 112 20 ------- ------- Total operating expenses 8,235 9,739 ------- ------- OPERATING INCOME (LOSS) (2,224) (8,485)
OTHER INCOME (EXPENSE): other income 27 7 Debt forgiveness income 460 257 Gain on disposal of investment 12,104 -- Gain from sale of assets -- 25 Loss on an unconsolidated affiliate -- (107) Interest expense (71) (166) ------- ------- Total other income 12,520 16
NET INCOME (LOSS) TO COMMON STOCKHOLDERS $9,587 ($8,775) ======= ======= BASIC INCOME (LOSS) PER SHARE $1.34 ($7.31) ======= =======
DILUTED INCOME (LOSS) PER SHARE $0.41 ($7.31) ======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 7,128,847 1,199,892 ======= ======= NET INCOME (LOSS) TO COMMON STOCKHOLDERS $9,587 ($8,775) ------- ------- EXCLUDING:
Non-cash issuance of common stock and warrants for services 1,047 7,055 Non-cash stock-based compensation, employees 474 -- Impairment expense -- 702 Bad debt expense 4 4 Depreciation and amortization 112 20 Other income 27 7 Debt forgiveness income 460 257 Gain on disposal of investment 12,104 -- Gain from sale of assets -- 25 Loss on an unconsolidated affiliate -- (107) Interest expense (71) (166) referred dividends (709) (306)
NET (LOSS) TO COMMON STOCKHOLDERS ------- ------- BEFORE NON-CASH ITEMS ($587) ($704) ======= =======
This news release was distributed by PrimeZone, www.primezone.com SOURCE: ATSI Communications, Inc.
By Staff
CONTACT: The Eversull Group Jack Eversull 972-991-1672 972-991-7359 (fax) E-mail:jack*theeversullgroup.com Web Site: www.atsi.net
(C) 2005 PRIMEZONE, All rights reserved.
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SUBJECT CODE: EARNINGS TELECOMMUNICATIONS Earnings Releases and Operating Results
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