ATSI Files 10K, Reports Fiscal 2002 Results; Expects to File 10Q for Fiscal First Quarter 2003 in Ten Business Days; Company to Reschedule Annual Meeting.Business Editors and Telecommunications Writers SAN ANTONIO--(BUSINESS WIRE)--Feb. 4, 2003 ATSI ATSI Aboriginal and Torres Strait Islander (Australia) ATSI Association of Thai Software Industry ATSI Association of TeleServices International ATSI American Transmission Systems, Inc. Communications, Inc. (AMEX AMEX See: American Stock Exchange :AI) today reported results for its fiscal year ended July 31, 2002. The report had been delayed due to the change from Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing , the Company's previous year auditors and accounting interpretations related to the sale of GlobalSCAPE, Inc., which resulted in the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. halting trading. For the year ended July 31, 2002, revenues increased 41% to $50.7 million, compared to $35.9 million reported last year. The principal reason for the increase in operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for fiscal 2002 was an increase in carrier services revenues of $14.6 million from $26.3 million to $40.9 million. While the gross margin improved from $7.6 million to $7.8 million, it decreased as a percentage of revenues due to the larger percentage of carrier service revenues, which generates lower margins than our network and retail services products. Selling, general and administrative expenses decreased slightly year to year but improved as a percentage of revenues from 35% to 24%. The improvements in gross margin and SG&A expense -- led to a slightly improved EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the year of ($4.8 million) as compared to ($5.0 million) last year. In conjunction with our yearly valuation of long-lived assets as required by SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 121, we determined that certain of the Company's assets, namely the concession license and the goodwill related to the 1997 purchase of Computel had carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. less than the amount per the financial statements and the Company recorded impairment losses of approximately $6.4 million. This resulted in a net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $15.4 million as compared to $8.9 million for fiscal 2001. Exclusive of the Company's impairment adjustment, net loss for fiscal 2002 would have been approximately $8.9 million as compared to $9.8 million for fiscal 2001. As a result of the sale of GlobalSCAPE in June 2002, the Company recorded a gain on disposition of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , net of tax of $1.1 million. Income from GlobalSCAPE, which has been shown as discontinued operations was $194,000 for fiscal 2002 as compared to a net loss of $771,000 for fiscal 2001. Net loss to common shareholders, which includes the effect of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends, a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) related to the preferred stock issuances, was approximately $15.0 million for the year as compared to $12.8 million for last year. Exclusive of the impairment loss and the income related to GlobalSCAPE's operations and sale, the Company's net loss to common shareholders for the year would have been $9.8 million as compared to $12.0 million for last year. (A table summarizing these results is included at the end of this release.) J. Christopher Cuevas, acting Chief Financial Officer, said, "We anticipate that our auditors will have completed work and we will be able to file our first fiscal quarter, 2003 10Q which ended October 31, 2002, by February 18th." John Fleming
John Fleming was a judge in Cumberland County, Virginia and had been in the House of Burgesses for 10+ years. , Interim Chairman of the Board, stated, "It is regrettable that we are not able to have our annual shareholder meeting as previously scheduled on February 10th. We will reschedule re·sched·ule tr.v. re·sched·uled, re·sched·ul·ing, re·sched·ules To schedule again or anew: rescheduled the meeting for the following week; rescheduled the debts of many developing nations. the meeting as soon as the company completes the previously announced evaluation of merger opportunities." ATSI Communications, Inc. is an emerging international carrier serving the rapidly expanding niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. in and between Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , primarily Mexico. 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, data and Internet. 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. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 Securities and Exchange Commission.
ATSI Communications, Inc.
And Subsidiaries
(in thousands, except per share amounts)
For the year ended July 31,
---------------------------
2001 2002
---- ----
OPERATING REVENUES:
Telco services
Carrier services $26,349 $40,922
Network services 2,714 2,223
Retail services 6,836 7,556
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Total operating revenues 35,899 50,701
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OPERATING EXPENSES:
Cost of services 28,297 42,862
Gross margin 7,602 7,839
Gross margin percentage 21% 15%
Selling, general and administrative 12,449 12,285
Bad debt expense 150 388
EBITDA (4,997) (4,834)
Impairment loss -- 6,432
Depreciation and amortization 3,920 4,115
--------------- -------------
OPERATING LOSS (8,917) (15,381)
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OTHER INCOME (EXPENSE): (887) (492)
NET LOSS FROM CONTINUING OPERATIONS (9,782) (15,780)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET OF TAX (771) 194
GAIN ON DISPOSITION OF DISCONTINUED
OPERATIONS, NET OF TAX -- 1,069
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NET LOSS (10,553) (14,517)
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LESS: PREFERRED STOCK DIVIDENDS (2,232) (472)
--------------- -------------
NET LOSS TO COMMON SHAREHOLDERS ($12,785) ($14,989)
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BASIC AND DILUTED LOSS PER COMMON
SHARE ($0.18) ($0.17)
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WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 71,180 86,275
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