ATSI Communications, Inc. (OTCBB: ATSX) Up Over 26%
ATSX is up over 26% at $0.38 per share. Current Volume of 431,737 is More than Five Times the 3 Month Average!
ATSI Communications, Inc. (OTCBB: ATSX)
ATSI Record Revenues Result in 181% Increase
526% Improvement in Gross Profit
SAN ANTONIO, TX–(MARKET WIRE)–Dec 14, 2006 — ATSI Communications, Inc. (OTC BB:ATSX.OB – News) announced today that revenues for the three months ended October 31, 2006 totaled $6,532,000, a 181% improvement over revenues of $2,682,000 for the three months ended October 31, 2005. The significant gain in revenues resulted in the Company’s ninth consecutive quarter of record revenues and an increase of $1.2 million over the immediately preceding quarter. In addition to record revenues for the quarter, the Company produced positive cash flow from operations or net income before non-cash items of $222,000. 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.
In addition to the Company’s continued revenue growth, recent achievements and highlights for the quarter include:
– 526% improvement in gross profit for the three months ended October
31, 2006 vs. the three months ended October 31, 2005 ($513,000 vs. $82,000
respectively).
– Second consecutive quarter of positive cash flow from operations.
– The Company processed a record volume of 105 million VoIP minutes of
use (”MOU”) during the quarter through its NexTone powered VoIP network.
– ATSI secures $1.2 million financing with CCA Financial Services, Inc.
to fund its growth initiatives.
Arthur L. Smith, CEO of ATSI, stated, “We are pleased to report that we delivered on our plan to increase gross profit while controlling SG&A expenses. The results are evident with the key improvement in cash flow from operations and an increase in cash reserves during th e quarter. Although we do expect our positive revenue growth trend to continue, we remain committed to emphasizing increases in gross profit while maintaining a strict control on expenses.” Mr. Smith added, “Increasing our cash reserve and strengthening our balance sheet will assist us with internally financing our growth and allow us to capitalize on strategic opportunities we could not have considered in the past.”
Including non-cash items, net loss applicable to common stockholders for the three months ended October 31, 2006 was $186,000 vs. net income applicable to common stockholders of $1,217,000 for the three months ended October 31, 2005 that included a gain of $1,652,00 from discontinued operations. The Company incurred $419,000 in non-cash expense for the quarter ended October 31, 2006 that includes $315,000 in non-cash stock-based compensation. Additional non-cash expenses incurred during the quarter include interest, bad debt, depreciation, amortization, and preferred dividend expense.
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 includes 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 c ontinue 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
October 31,
2006 2005
———- –
——–
OPERATING REVENUES:
VoIP Carrier services $ 6,495 $ 2,291
Communication services 33 22
Network services 4 9
———- ———-
Total operating revenues 6,532 2,322
———- ———-
OPERATING EXPENSES:
Cost of services (exclusive of depreciation
and amortization, shown below) 6,019 2,240
Selling, general and administrative expense
(exclusive of legal and professional fees,
non-cash stock compensation, and
stock/warrants for services as shown below) 210 149
Legal and professional fees 58 27
Non-cash issuance of common stock and
warrants for services 46 64
Non-cash stock-based compensation for
Bad debt expense 23 –
Depreciation and amortization expense 17 22
———- ———-
Total operating expenses
6,688 2,682
———- ———-
OPERATING (LOSS) &nbs
p; (156) (360)
———- ———-
OTHER INCOME (EXPENSE):
Loss on derivative instrument liabilities – (26)
Interest expense (28) (26)
&
———- ———-
Total other income (expense), net (28) (52)
&nbs
———- ———-
(LOSS) FROM CONTINUING OPERATIONS (184) (412)
———- ———-
DISCONTINUED OPERATIONS
Gain on disposal of discontinued operations – 1,652
———- ———-
INCOME FROM DISCONTINUED OPERATIONS – 1,652
———- ———-
NET INCOME (LOSS) $ (184) $ 1,240
LESS: PREFERRED DIVIDEND (2) (23)
———- ———-
NET INCOME (LOSS) TO COMMON STOCKHOLDERS $ (186) $ 1,217
; ========== ==========
BASIC INCOME (LOSS) PER SHARE:
From continuing operations $ (0.01) $ (0.04)
From discont
inued operations – 0.15
———- ———-
Total &
$ (0.01) $ 0.11
========== ==========
DILUTE
D INCOME (LOSS) PER SHARE
From continuing operations $ (0.01) $ (0.04)
From discontinued operations – 0.05
———- ———-
Total $ (0.01) $ 0.01
========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC
17,569,410 10,945,338
DILUTED 17,569,410 10,945,338
NET INCOME (LOSS) TO COMMON STOCKHOLDERS:
$ (186) $ 1,217
———- ———-
EXCLUDING NON-CASH ITEMS:
Non-cash issuance of common stock
and
warrants for services 46 64
Non-cash stock-based compensation for
employees and directors
315 180
Depreciation and amortization 17 22
Loss on derivative instrument liabilities – (26)
Interest expense (28) (26)
Gain on disposal of discontinued operations – 1,652
Preferred dividend (2) (23)
———- ———-
NET INCOME (LOSS) TO COMMON STOCKHOLDERS EXCLUDING
NON-CASH ITEMS: $ 222 $ (94)
———- ———-
Contact:
Contact:
Jack Eversull
The Eversull Group
972-991-1672
972-991-7359 (fax)
E-mail: Email Contact
Web Site: http://www.atsi.net
Source: ATSI Communications
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