SAN ANTONIO, Dec. 15, 2005 (PRIMEZONE) -- ATSI Communications, Inc. (OTCBB:ATSX) today announced results for the fiscal quarter ended October 31, 2005. Revenues for the 1st quarter totaled $2,322,000, a 176% increase over the previous year's 1st quarter ended October 31, 2004. The increase in revenue for the quarter resulted in the 5th consecutive quarter of record revenues for the Company since ATSI's reincorporation. In addition, the Company reported that it has continued improving its balance sheet by eliminating $1.2 million in current liabilities associated with the sale of an ATSI subsidiary in Mexico that ceased operations in May 2003. As a result of the sale, the Company also recognized a gain of $1.6 million for the quarter. Consequently, ATSI produced a net income for the 1st quarter ended October 31, 2005 of $1.2 million or $0.11 basic earnings per share based on the weighted average of common shares outstanding vs. a net loss of $51,000 or ($0.01) basic loss per share based on the weighted average of common shares outstanding for the previous year's 1st quarter ended October 31, 2004.
In addition to producing record revenues and improving its balance sheet, other highlights for the quarter include:
-- ATSI signed an agreement with NexTone Communications to continue
expanding its NexTone Multiprotocol Signaling Switch ("MSW") and
Multiprotocol Session Controller ("MSC"). The Company expanded
port capacity by 65 percent and purchased the NAT Proxy ("NPX")
product for the expanded system to support continued growth.
-- ATSI secured an accounts receivable factoring agreement with CSI
Business Finance, Inc. that provides ATSI with capital to fund
its growth initiatives and allows the company access to
additional capital in the future as revenues increase.
Arthur L. Smith, CEO of ATSI stated, "We are off to a great start in FY2006. We continued the successful execution of our core VoIP business by producing the 5th consecutive quarter of record revenues since our reincorporation while making a significant improvement to our balance sheet. We also were able to expand our VoIP network capacity and secure a non-dilutive financing arrangement to facilitate future growth." Mr. Smith added, "We are also pleased to report that we reduced our legal and professional fees by over $200,000 during the quarter when compared to the same period in our previous fiscal year. Our management team is committed to maintaining rigorous expense controls and expects this trend to continue during FY2006."
Excluding non-cash items, net loss for the 1st quarter ended October 31, 2005 was $98,000 vs. a net loss of $419,000 for the previous year's 1st quarter ended October 31, 2004. During the quarter, the Company incurred $228,000 in non-cash compensation associated with stock and warrants issued for services. Additional non-cash items incurred during the quarter include depreciation and amortization expense and preferred dividend expense.
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 income 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)
(unaudited)
Three months ended October 31,
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2005 2004
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OPERATING REVENUES:
Carrier services $2,313 $769
Network services 9 73
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Total operating revenues 2,322 842
OPERATING EXPENSES:
Cost of services (exclusive of
depreciation and amortization,
shown below) 2,240 772
Selling, general and administrative 153 250
Legal and professional fees 27 239
Non-cash issuance of common stock and
warrants for services 48 --
Non-cash stock-based compensation,
employees 180 --
Depreciation and amortization 22 23
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Total operating expenses 2,670 1,284
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OPERATING (LOSS) (348) (442)
OTHER INCOME (EXPENSE):
Debt forgiveness income -- 460
Gain on disposal of investment 1,652 --
Interest expense (16) (31)
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Total other income (expense), net 1,636 429
NET INCOME (LOSS) 1,288 (13)
LESS: PREFERRED DIVIDENDS (41) (38)
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NET INCOME (LOSS) TO COMMON
STOCKHOLDERS $1,247 ($51)
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BASIC INCOME (LOSS) PER SHARE $0.11 ($0.01)
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DILUTED INCOME (LOSS) PER SHARE $0.04 ($0.01)
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WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 10,945,338 3,598,383
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NET INCOME (LOSS) TO COMMON
STOCKHOLDERS: $1,247 ($51)
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EXCLUDING NON-CASH ITEMS:
Non-cash issuance of common stock and
warrants for services 48 --
Non-cash stock-based compensation,
employees 180 --
Depreciation and amortization 22 23
Debt forgiveness income -- 460
Gain on disposal of investment 1,652 --
Interest expense (16) (31)
Preferred Dividends (41) (38)
NET INCOME (LOSS) TO COMMON
STOCKHOLDERS:
EXCLUDING NON-CASH ITEMS: ($98) ($419)
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