-- The Company completed the conversion and redemption of its Series H
Preferred Stock that eliminated $1.3 million in liabilities
-- ATSI successfully deployed the NexTone IntelliConnect™ System to
further enhance the Company's VoIP network
-- The Company processed 112 million VoIP minutes of use ("MOU") during
the quarter through its NexTone powered VoIP network
-- 157% improvement in gross profit for the three months ended April 30,
2007 vs. the three months ended April 30, 2006.
"We are extremely pleased with our 3rd quarter performance and the
consistency we have established in meeting key financial and strategic
goals," stated ATSI President and CEO, Arthur L. Smith. "Our 3rd quarter
growth demonstrates we are successfully executing our business plan, a
trend we are continuing to experience well into the 4th quarter. We look
forward to reporting a record fiscal year during which we have met and
delivered on all of the fundamentals critical to the successful execution
of our long term strategic plan."
Adjusted for non-cash items, net income for the three months ended April
30, 2007 was $198,000 vs. a net loss before non-cash items of $64,000 for
the three months ended April 30, 2006. Non-cash items include long-term
incentive compensation for employees and directors that reflects the
Company's adoption of SFAS 123R accounting for the amortization expense of
stock option grants. Additional non-cash items reported during the quarter
include interest, depreciation, amortization, and preferred dividend
expense/income.
Net income 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 income before non-cash items.
ATSI Communications, Inc. operates through its two wholly owned
subsidiaries, Digerati Networks, Inc. and Telefamilia Communications, Inc.
Digerati Networks, Inc. is a premier global VoIP carrier serving rapidly
expanding markets in Asia, Europe, the Middle East, and Latin America, with
an emphasis on Mexico. Through Digerati's partnerships with established
foreign carriers and network operators, interconnection and service
agreements, and a NexTone powered VoIP network, ATSI believes it has clear
advantages over its competition. Telefamilia Communications provides
specialized retail communication services that include VoIP services to the
high-growth Hispanic market in the United States. ATSI also owns a
minority interest of a subsidiary in Mexico, ATSI Comunicaciones, S.A. de
C.V., which operates under a 30-year government issued telecommunications
license.
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 share and per share amounts)
(Unaudited)
Three months ended April 30,
2007 2006
------------- -------------
OPERATING REVENUES:
Carrier services $ 8,109 $ 4,047
Communication services 27 39
Network services 4 5
------------- -------------
Total operating revenues 8,140 4,091
------------- -------------
OPERATING EXPENSES:
Cost of services (exclusive of
depreciation and amortization, shown
below) 7,647 3,899
Selling, general and administrative
expense (exclusive of legal and
professional fees) 317 209
Legal and professional fees 84 72
Bad debt expense 29 -
Depreciation and amortization expense 24 23
------------- -------------
Total operating expenses 8,101 4,203
------------- -------------
OPERATING INCOME (LOSS) 39 (112)
------------- -------------
OTHER INCOME (EXPENSE):
Loss on derivative instrument liabilities - 88
Debt forgiveness income - 11
Other income 4 -
Interest expense (257) (26)
------------- -------------
Total other income (expense), net (253) 73
------------- -------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (214) (39)
------------- -------------
DISCONTINUED OPERATIONS
Gain on disposal of discontinued operations - -
------------- -------------
INCOME FROM DISCONTINUED OPERATIONS - -
------------- -------------
NET INCOME (LOSS) $ (214) $ (39)
LESS: PREFERRED DIVIDEND (7) (23)
ADD: REVERSAL OF PREVIOUSLY RECORDED
PREFERRED DIVIDEND 600 -
------------- -------------
NET INCOME (LOSS) TO COMMON STOCKHOLDERS $ 379 $ (62)
============= =============
BASIC INCOME (LOSS) PER SHARE:
From continuing operations $ 0.01 $ 0.00
From discontinued operations $ - $ -
------------- -------------
Total $ 0.01 $ 0.00
============= =============
DILUTED INCOME (LOSS) PER SHARE
From continuing operations $ 0.01 $ 0.00
From discontinued operations $ - $ -
------------- -------------
Total $ 0.01 $ 0.00
============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 37,005,780 14,819,277
DILUTED 39,842,780 14,819,277
------------- -------------
NET INCOME (LOSS) TO COMMON STOCKHOLDERS: $ 379 $ (62)
------------- -------------
EXCLUDING NON-CASH ITEMS:
ADD:
Non-cash issuance of common stock and
warrants for services 83 25
Non-cash stock-based compensation,
employees 52 -
Depreciation and amortization 24 23
Interest expense 257 26
MINUS:
Debt forgiveness income - 11
Loss on derivative instrument
liabilities - 88
Other income 4 -
Gain on disposal of discontinued operations - -
Preferred dividend 593 (23)
NET INCOME (LOSS) TO COMMON STOCKHOLDERS:
------------- -------------
EXCLUDING NON-CASH ITEMS: $ 198 $ (64)
------------- -------------
Contact Information: Contact: Jack Eversull The Eversull Group 972-991-1672 972-991-7359 (fax) E-mail: Web Site: www.atsi.net