Science & Technology
Science and Technology
Science and Technology
Thu, March 19, 2009
Wed, March 18, 2009
Tue, March 17, 2009 ATSI Communications: ATSI Reports 2nd Quarter FY2009 Financial Results
SAN ANTONIO, TX--(Marketwire - March 17, 2009) - ATSI Communications, Inc. (
Comments on the first six months of FY2009
The Company's financial results through January 31, 2009 have been negatively impacted by three key factors including:
-- The decline in international voice traffic due to the global economic crisis. Although the Company and its industry peers have experienced decreased call volume from multiple immigrant communities calling their country of origin, the largest impact for ATSI has been on voice traffic between the United States and Mexico. Specifically, workers returning to Mexico due to a weak U.S. economy have caused a significant decrease in call volume. -- The tightening of capital markets has reduced the credit worthiness of certain existing and prospective customers. To minimize risk, the Company has denied or reduced credit, and in some cases, suspended service to these accounts resulting in a negative impact on revenue. -- A market shift towards improved quality that requires the Company to hold its suppliers to a higher standard on international routes. The Company is taking actions to improve quality by eliminating underperforming vendors from its global routing. This initiative that is expected to produce long term benefits has added to the negative impact on call volume and revenue.
Arthur L. Smith, CEO of ATSI, stated, "We were able to increase our gross margin during the second fiscal quarter when compared to the same period for the previous year despite the continued decline in global economic conditions. This increase is attributable to system enhancements that have allowed us to automate key routing functions and the Company's initiative to improve quality. The anticipated result will be a more consistent, stable, and reliable global network that will appeal to top tier carriers."
Mr. Smith added, "Considering the challenges facing the U.S. and World economies, we took the necessary steps in the first half of the year to cut costs by reducing headcount and are evaluating other cost cutting measures to be implemented during the 3rd quarter. Our cash position remains strong, we have an exceptional track record of performance as evidenced by Deloitte's ranking ATSI 383 in the '2008 Technology Fast 500' for fastest growing companies in North America, and we have built a solid business positioned for success. We are confident in our ability to endure these difficult times and return to a growth mode as the global economy improves."
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principals, or GAAP, ATSI uses non-GAAP measures of operating income (loss), net income (loss) and income (loss) per share, which are adjustments from results based on GAAP to exclude non-cash expenses, including non-cash stock-based compensation in accordance with SFAS 123R. ATSI's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of ATSI's ongoing core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors.
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 loss before non-cash items.
ATSI Communications, Inc. operates through its wholly owned subsidiary, Digerati Networks, Inc. Digerati Networks 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 NextPoint powered VoIP network, ATSI believes it has clear advantages over its competition. 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.
The information in this news release includes certain forward-looking statements that are based upon management's expectations and assumptions about certain risks and uncertainties that can affect future events. Although management believes these assumptions and expectations to be reasonable on the date of this news release, these risks and uncertainties may cause actual events to differ material from managements those contained in this news release. The risks and uncertainties include, but are not limited to, continuing as a going concern, availability and cost of our present vendors and suppliers, and absence of any change in government regulations or other costs associated with data transmission over the Internet or termination of transmissions in foreign countries.
ATSI COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three months ended January 31, 2009 2008 ---------- ---------- OPERATING REVENUES: VoIP services $ 5,454 $ 10,309 ---------- ---------- Total operating revenues 5,454 10,309 ---------- ---------- OPERATING EXPENSES: Cost of services (exclusive of depreciation and amortization, shown below) 4,984 9,544 Selling, general and administrative expense (exclusive of legal and professional fees) 529 538 Legal and professional fees 102 65 Bad debt expense 21 21 Depreciation and amortization expense 42 38 ---------- ---------- Total operating expenses 5,678 10,206 ---------- ---------- OPERATING INCOME (LOSS) (224) 103 ---------- ---------- OTHER INCOME (EXPENSE): Gain on early extinguishment of debt - - Investment loss (12) - Interest income (expense) (59) (24) ---------- ---------- Total other income (expense), net (71) (24) ---------- ---------- NET INCOME (LOSS) (295) 79 ---------- ---------- LESS: PREFERRED DIVIDEND - - ADD: REVERSAL OF PREVIOUSLY RECORDED PREFERRED DIVIDEND - - ---------- ---------- NET INCOME (LOSS) TO COMMON STOCKHOLDERS $ (295) $ 79 ========== ========== BASIC INCOME (LOSS) PER SHARE TO COMMON STOCKHOLDERS $ (0.01) $ 0.00 ========== ========== DILUTED INCOME (LOSS) PER SHARE TO COMMON STOCKHOLDERS $ (0.01) $ 0.00 ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 39,938,001 39,134,394 DILUTED COMMON SHARES OUTSTANDING 39,938,001 39,522,972 ---------- ---------- NET INCOME (LOSS) TO COMMON STOCKHOLDERS, as reported: $ (295) $ 79 ---------- ---------- EXCLUDING NON-CASH ITEMS: ADD: Non-cash issuance of common stock and warrants for services - 10 Non-cash stock-based compensation, employees 67 85 Bad debt expense (recovery) 21 21 Depreciation and amortization 42 38 Investment loss 12 - Interest expense 59 24 MINUS: Gain on early extinguishment of debt - - Preferred dividend - - NET INCOME (LOSS) TO COMMON STOCKHOLDERS ---------- ---------- EXCLUDING NON-CASH ITEMS: $ (94) $ 257 ---------- ----------
