ATSI Reports Third Quarter Results; Record Traffic Volumes and Retail Revenues; IBM Restructuring and Globalscape Sale to Positively Impact 4th Quarter.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers SAN ANTONIO--(BUSINESS WIRE)--June 17, 2002 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 report results for the third quarter ended April 30, 2002. A table summarizing these results is included at the end of this release. For the third quarter ended April 30, 2002, ATSI's revenues were $14.6 million, compared to $11.5 million in the prior year's quarter, representing a 27% increase in consolidated revenues. Carrier services revenues increased 39% quarter over quarter as the Company processed a record amount of third-party generated traffic during the third quarter, and for the second consecutive quarter the Company's communication centers in Mexico produced a record amount of revenue. Cost of services increased $3.8 million between quarters, due mainly to the growth of the Company's lower margin carrier services business, resulting in a decline in gross margins from 34% to 22%. The Company's communication centers in Mexico produced a record amount of gross margin dollars during the third quarter. SG&A expenses remained at their lowest level in nearly three years at 27% of revenues for the second consecutive quarter, decreasing from $4.5 million in last year's quarter to $3.9 million in this year's quarter. Excluding one-time severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs of $106,000 related to headcount reductions made during the third quarter, the Company's 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 loss decreased from $688,000 to $658,000. The net loss to common stockholders remained at $(0.03) per share between quarters, but included approximately $400,000 of interest expense related to the Company's debt facility with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) which the Company will not have to pay as a result of a new agreement signed with IBM in May 2002. Excluding this amount of interest expense, the net loss to common stockholders would have been $(0.02) per share during this year's third quarter. H. Douglas Saathoff, ATSI's Chief Financial Officer, commented, "The Company was challenged during the quarter with capacity and routing issues related to its third-party generated traffic, but reacted favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. by reducing SG&A costs and initiating transactions, which will positively impact the Company financially in the fourth quarter, such as the sale of our interest in GlobalSCAPE and the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of our obligation with IBM. The Company's carrier services customer base grew during the quarter both in terms of volume of traffic and number of customers. Fixing inefficiencies and constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. in the Company's network and routing should enable the Company to produce better operating results going forward when combined with expense reductions already implemented by the Company." As an informative supplement to its earnings press release, ATSI will provide investors with a quarterly update message, which may be accessed by dialing 888/509-0082 beginning at 10:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on Monday, June 17, 2002. To access the call, participants will be prompted for the title of the call: ATSI Third Quarter Results. This service will be available through 5:00 PM CDT, Wednesday, June 19, 2002. 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . ATSI has clear advantages over the competition through its corporate framework consisting of unique licenses, interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. and service agreements, network footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. , 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
Consolidated Statements of Operations
(In thousands, except per share amounts)
For the Three Months For the Nine Months
Ended April 30, Ended April 30,
-------------------- --------------------
2002 2001 2002 2001
---- ---- ---- ----
(unaudited) (unaudited)
Telco services
Carrier services $10,758 $7,733 $30,784 $15,801
Network services 510 597 1,786 2,003
Retail services 1,983 1,689 5,640 5,088
Internet e-commerce 1,335 1,449 3,809 4,125
-------- -------- -------- --------
Total operating revenues 14,586 11,468 42,019 27,017
Cost of services 11,425 7,619 31,926 18,564
-------- -------- -------- --------
Gross margin 3,161 3,849 10,093 8,453
Selling, general and
administrative 3,925 4,537 11,866 13,945
-------- -------- -------- --------
EBITDA (764) (688) (1,773) (5,492)
Depreciation and
amortization 1,205 1,041 3,494 3,277
-------- -------- -------- --------
Operating loss (1,969) (1,729) (5,267) (8,769)
Other expense, net (602) (222) (1,729) (331)
-------- -------- -------- --------
Income tax expense 26 -- 84 65
Minority interest 207 122 198 251
Net loss ($2,390) ($1,829) ($6,882) ($8,914)
Less: preferred dividends (96) (475) (373) (1,596)
-------- -------- -------- --------
Net loss to common
shareholders ($2,486) ($2,304) ($7,255) ($10,510)
======== ======== ======== ========
Basic and diluted loss
per share ($0.03) ($0.03) ($0.09) ($0.15)
======== ======== ======== ========
Weighted average common
shares outstanding 91,486 74,331 84,271 69,831
======== ======== ======== ========
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