GTS Announces 1998 Year End Results.MARLTON, N.J.--(BUSINESS WIRE)--April 16, 1999-- Global Telecommunication Solutions, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: GTST GTST Goede Tijden, Slechte Tijden (Good Times, Bad Times; Dutch TV soap opera) GTST Grimsby Town Supporters Trust (Grimsby, UK) GTST Global Traffic Safety Trust , GTSTW)("GTS GTS abbr. gas turbine ship " or the "Company") today reported results for the year ended December 31, 1998. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the year ended December 31, 1998 were $31,178,125, compared to $18,234,640 for the comparable period during 1997, a 71% increase. The Company's net loss for the year ended December 31, 1998 was $28,569,796, or $4.41 per share, compared to a net loss of $25,535,939, or $7.47 per share, during the prior year. The net loss included one-time charges of $12,820,868 related to a reduction in goodwill and $1,091,436 in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . The remaining portion of net loss of $14,657,492 for 1998, or $2.26 per share (not including the $13,912,304 one-time charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or restructuring charges) increased by $3,850,313, compared to the remaining portion of net loss for 1997 of $10,807,179 (not including the $14,728,760 one-time charges relating to the goodwill impairment or restructuring charges). During the fourth quarter of 1998 and the first quarter of 1999, the Company took steps to improve its balance sheet by converting an aggregate of $6,574,750 of debt into 7,286,200 shares of its common stock. The conversion of debt to equity eliminated substantially all debt from the Company's balance sheet. Randy Cherkas, the Company's President, stated, "1998 was a transitional year for GTS, as we merged GTS, Networks Around The World and Centerpiece Communications into a single entity. Changes in management while consolidating those three companies made for a challenging integration. Management's plan is to continue to grow the business while improving operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and, ultimately, reaching profitability. The Company's margins, which were 5% for all of 1998, increased throughout the year reaching 11% in the fourth quarter. The Company's margins during the 1997 fourth quarter were negative 13%." Mr. Cherkas continued, "Our business plan is to increase the sale of our phone cards primarily through convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. , supermarkets and drug stores. The Company successfully implemented its business plan during the first quarter of 1999 by establishing relationships with convenience stores such as: Shipley's Stores and More For Less; drug stores and related drug store associations such as King's Drug Stores, the Chain Drug Marketing Association and The Independent Pharmacy An independent pharmacy is a retail pharmacy that is not directly affiliated with any chain pharmacy, such as CVS/pharmacy, Walgreens or Eckerd. However, owners of independent pharmacies will often form alliances with other independents and use their power in numbers to bargain for Association; and supermarkets such as King's Supermarkets. Additionally, the Company is preparing to leverage its relationships to sell additional prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products,
such as prepaid cellular and prepaid local telephone services, into its
distribution channels. The Company is currently developing the system to
electronically distribute its phone cards over the Internet."The Company's ability to implement its business strategy as set forth in this press release is contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent its ability to obtain additional financing. The Company is currently negotiating with several potential financing sources in an attempt to raise additional debt capital, but there can be no assurances that the Company will be successful. If the Company is unable to obtain additional financing, the Company's operations could be materially adversely affected. For a more detailed discussion of the Company's current financial position, please see the Company's Form 10-KSB for the year ended December 31, 1998. Global Telecommunication Solutions, Inc. is a facilities-based provider of prepaid phone cards that allow users to access reliable, convenient and cost-effective domestic and international telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. . The Company's core product line consists of traditional prepaid phone cards marketed domestically and internationally. The Company also offers custom-designed prepaid phone cards for business promotional use. Except for any historical information contained herein, the matters discussed in this press release contain 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. that involve risks and uncertainties which are described in the Company's SEC reports, including the Company's Form 10-KSB for the year ended December 31, 1998, and the Company's Prospectus dated July 9, 1997. -0-
Global Telecommunication Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------------------------------------------
1998 1997 1998 1997
---- ---- ---- ----
Net sales $ 8,654,394 $ 4,217,639 $ 31,178,125 $ 18,234,640
Cost of sales 7,693,681 4,769,013 29,629,086 16,249,773
Selling,
general
and
administrative
expenses 2,945,614 3,026,597 11,194,989 9,640,506
----------- ------------ ------------ ------------
Operating cash
flow (deficit) (1,984,901) (3,577,971) (9,645,950) (7,655,639)
Depreciation
and amortization 450,935 669,505 1,914,337 2,037,222
Restructuring
charge 200,000 1,500,606 1,091,436 1,500,606
Goodwill
impairment 12,820,868 13,228,154 12,820,868 13,228,154
Interest
expense and
non cash
financing
costs 896,907 254,104 3,097,205 1,114,318
------------ ------------ ------------ ------------
Net loss $(16,353,611) $(19,230,340) $(28,569,796) $(25,535,939)
============ ============ ============ ============
Net loss
per share $ (1.94) $ (3.79) $ (4.41) $ (7.47)
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Weighted
average shares 8,436,988 5,074,850 6,483,659 3,418,724
outstanding ============ ============ ============ ============
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