ATSI Communications Reports Third Quarter Results.

Business Editors & Technology Writers

SAN ANTONIO--(BUSINESS WIRE)--June 14, 2001

ATSI Communications, Inc. (AMEX:AI)

-- Largest Revenue Quarter in Company History

-- Positive EBITDA in March and April

-- Telco SG&A Lowest Level in Three Years

ATSI TO HOLD EARNINGS CONFERENCE CALL

Thursday, June 14, 2001 at 10:00 a.m Central Daylight Savings Time

(see details below)

ATSI Communications, Inc. (AMEX:AI) today reported results for the three and nine-month periods ended April 30, 2001. A table summarizing those results is included at the end of this release.

For the quarter ended April 30, 2001, the Company produced record consolidated revenues of $11.5 million, which included telco revenues of $10.0 million and GlobalSCAPE revenues of $1.5 million. This compares to telco revenues of $8.1 million and GlobalSCAPE revenues of $1.4 million for the same period last year. The increase in revenues represents a 20% increase over last year's quarter and a 42% improvement over the preceding quarter ended January 31, 2001. The consolidated gross margin improved to 34% compared to 29% reported in the previous year's quarter. Excluding a $405,000 non-recurring, non-cash compensation expense related to GlobalSCAPE, the Company's consolidated SG&A expense increased approximately $200,000 from the previous year's quarter. Additionally, the Company's telco SG&A expense, as a percentage of related revenue, fell to approximately 27%, the lowest level in three years. As a result of these factors, ATSI's EBITDA improved from a loss of $1.1 million to a loss of $283,000 (excluding the non-recurring, non-cash compensation expense related to GlobalSCAPE), an improvement of approximately 75 percent. When compared to the preceding quarter, EBITDA improved approximately 81 percent. On a consolidated basis, the Company produced positive EBITDA results during the months of March and April, and its telco operations produced positive EBITDA results during the month of April. During the third quarter ending April 30, 2001, the net loss to common shareholders improved to $2.3 million, compared to a loss of $7.3 million in last year's quarter.

Arthur L. Smith, ATSI's Chairman and Chief Executive Officer, stated, "The telecommunications sector as a whole continues to experience unprecedented challenges. More than ever, companies are being valued based on their ability to perform both operationally and financially. I am very encouraged that even during these challenging times we have realized significant improvements in many of the financial and operational benchmarks by which we, as well as others, measure the quality of our performance. By remaining focused on our strategic goals, during the last two quarters we were able to increase capacity and routing diversity and reduce both variable and fixed costs of operating our network, contributing to the significant increases we are experiencing in our telco revenues and net results. We have made significant progress over the last two quarters, leading to positive telco EBITDA results during the month of April, which is four months ahead of our previously stated objective. I assure you that all the members of the ATSI team, including the new members of its technical and sales teams, remain focused and are committed to continue delivering quality results, both operationally and financially. I look forward to discussing the Company's performance in greater detail during our conference call later this morning."

ATSI Communications, Inc. is an emerging international carrier serving the rapidly expanding niche markets in and between Latin America and the United States. The Company's borderless strategy includes the deployment of a "next generation" network for more efficient and cost effective service offerings of domestic and international voice and data. ATSI has clear advantages over the competition through its corporate framework consisting of unique licenses, interconnection and service agreements, network footprint, and extensive retail distribution. ATSI's Internet software subsidiary, GlobalSCAPE, Inc. (www.globalscape.com), is recognized as a leader in the development, marketing and support of award-winning content and file management solutions and collaborative peer-to-peer technologies.

This news release contains forward-looking statements. These statements describe management's beliefs and expectations about the future. We have identified forward looking statements by using words such as "expect," "believe," and "should." 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. More detailed information about ATSI Communications, Inc. is available in the Company's public filings with the Security and Exchange Commission.

ATSI EARNINGS CONFERENCE CALL

The conference call will be held on Thursday, June 14, 2001 at 10:00 a.m. CDT. To participate in the conference call dial 800/275-3210 (Domestic callers) or 973/628-6885 (International callers). For your convenience, you may listen to the replay of the discussion by dialing 973/341-3080 and entering the following PIN number 2643629. This service will be available beginning at 12:00 noon CDT, Thursday, June 14, 2001 through 5:00 p.m. CDT, Friday, June 15, 2001. A transcript of the call will be also available on the ATSI website at www.atsi.net beginning at 12:00 noon. CDT, Thursday, June 14, 2001.

                       ATSI Communications Inc.
                           and Subsidiaries
               (In thousands, except per share amounts)

                  Consolidated Statements     Consolidated Statements
                       of Operations               of Operations
                   For the Three Months         For the Nine Months
                      Ended April 30,             Ended April 30,
                   --------------------        --------------------
                     2001        2000            2001        2000
                     ----        ----            ----        ----
                        (unaudited)                 (unaudited)
Telco services
 Network services  $  8,330    $  5,850        $ 17,804    $ 18,847
 Integrated prepaid   1,512       1,590           4,406       4,511
 Postpaid               177         690             682       2,853
Internet e-commerce   1,449       1,394           4,125       3,465
                   --------    --------        --------    --------
Total operating
 revenues            11,468       9,524          27,017      29,676
Cost of services      7,619       6,723          18,564      20,353
                   --------    --------        --------    --------
Gross margin          3,849       2,801           8,453       9,323
Selling, general
 and administrative   4,132       3,927          13,945      10,767
                   --------    --------        --------    --------
EBITDA                 (283)     (1,126)         (5,492)     (1,444)
Depreciation and
 amortization         1,041       1,129           3,277       3,464
                   --------    --------        --------    --------
Operating loss       (1,324)     (2,255)         (8,769)     (4,908)
Other expense, net     (222)       (357)           (331)     (1,463)
                   --------    --------        --------    --------
Income tax expense
 (benefit)              --          --               65         --
Minority interest       122         --              251         --
                   --------    --------        --------    --------
Net loss           ($ 1,424)   ($ 2,612)       ($ 8,914)   ($ 6,371)
Less: preferred
 dividends             (475)     (4,683)         (1,596)     (6,734)
                   --------    --------        --------    --------
Net loss to common
 shareholders      ($ 1,899)   ($ 7,295)       ($10,510)   ($13,105)
                   ========    ========        ========    ========
Basic and diluted
 loss per share    ($  0.03)   ($  0.11)       ($  0.15)   ($  0.24)
                   ========    ========        ========    ========
Weighted average
 common shares
  outstanding        74,331      61,780          69,831      53,448
                   ========    ========        ========    ========

    1)  Results for the three-months ended April 30, 2001 exclude $405
        of non-recurring non-cash compensation expense. Actual results
        including the $405 of compensation expense are as follows:
        SG&A, EBITDA, Operating loss, Net loss and Net loss to common
        shareholders of $4,537, ($688), ($1,729), ($1,829) and
        ($2,304), respectively.