-- 44% year-over-year revenue growth from $6.5 million to $9.4 million
driven by an increase in VoIP carrier services traffic of 28% from
approximately 105,213,932 minutes of voice traffic during the quarter ended
October 31, 2006 to approximately 134,380,145 minutes of voice traffic
during the quarter ended October 31, 2007.
-- Record gross profit of $642,000 and 6th consecutive quarter of
positive cash flow from operations
-- 4th consecutive quarter of net positive earnings per share on total
net income to common stockholders of $35,000 for the quarter ended October
31, 2007 as opposed to a net loss to common stockholders of $186,000 for
the same period last year
First Quarter and Recent Operating Highlights:
-- Entered into $3 million accounts receivable financing package with
Wells Fargo
-- Appointed Joseph M. Troche as Sr. Vice President of Global Sales
-- Became member of Arbinet-thexchange, Inc., a NASDAQ company, to buy,
sell, deliver and settle VoIP transactions using Arbinet's Internet-based
electronic platform.
Financial Results
Total revenues were $9.4 million compared to $6.5 million in the first
quarter of 2006. Gross profit was $642,000 during the quarter ended
October 31, 2007, compared to $513,000 during the first quarter last year.
Non-GAAP net income for the first fiscal quarter of 2008 was $185,000
compared to a non-GAAP net income of $245,000 in last year's first fiscal
quarter. The Company incurred $519,000 in non-cash expense during the
quarter ended October 31, 2007 vs. $429,000 during the quarter ended
October 31, 2006. Non-cash expenses incurred during the period include
depreciation, amortization, interest, and stock compensation.
Arthur L. Smith, CEO of ATSI stated, "We are extremely pleased with our
quarterly results. Our global VoIP strategy continues to pay-off as
evidenced by increased voice communications traffic on our network and
continued revenue growth. Against this backdrop, our trend for improvement
in gross profit has continued and we are optimistic that our commitment to
control expenses will contribute to stronger bottom-line results going
forward."
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
stock-based compensation expenses 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
on-going 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 two wholly owned
subsidiaries, Digerati Networks, Inc. and Telefamilia Communications, Inc.
Digerati Networks, Inc. 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 NexTone powered VoIP network, ATSI believes it has clear
advantages over its competition. Telefamilia Communications provides
specialized retail communication services that includes VoIP services to
the high-growth Hispanic market in the United States. 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 share and per share amounts)
(Unaudited)
Three months ended
October 31,
2007 2006
---------- ----------
OPERATING REVENUES:
Carrier services $ 9,402 $ 6,499
Communication services 25 33
---------- ----------
Total operating revenues 9,427 6,532
---------- ----------
OPERATING EXPENSES:
Cost of services (exclusive of depreciation
and amortization, shown below) 8,785 6,019
Selling, general and administrative expense
(exclusive of legal and professional fees) 823 571
Legal and professional fees 89 58
Bad debt expense - 23
Depreciation and amortization expense 40 17
---------- ----------
Total operating expenses 9,737 6,688
---------- ----------
OPERATING INCOME (LOSS) (310) (156)
---------- ----------
OTHER INCOME (EXPENSE):
Debt forgiveness income 41 -
Interest income (expense) (24) (28)
---------- ----------
Total other income (expense), net 17 (28)
---------- ----------
NET INCOME (LOSS) (293) (184)
---------- ----------
LESS: PREFERRED DIVIDEND (12) (2)
ADD: REVERSAL OF PREVIOUSLY RECORDED PREFERRED
DIVIDEND 340 -
---------- ----------
NET INCOME (LOSS) TO COMMON STOCKHOLDERS $ 35 $ (186)
========== ==========
BASIC INCOME (LOSS) PER SHARE: $ 0.00 $ (0.01)
========== ==========
DILUTED INCOME (LOSS) PER SHARE $ 0.00 $ (0.01)
========== ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 38,792,388 17,569,410
DILUTED COMMON SHARES OUTSTANDING 38,796,275 17,569,410
---------- ----------
NET INCOME (LOSS) TO COMMON STOCKHOLDERS: $ 35 $ (186)
---------- ----------
EXCLUDING NON-CASH ITEMS:
ADD:
Non-cash issuance of common stock and
warrants for services 15 46
Non-cash stock-based compensation, employees 440 315
Bad debt expense - 23
Depreciation and amortization 40 17
Interest expense 24 28
MINUS:
Debt forgiveness income 41 -
Preferred dividend 328 (2)
NET INCOME (LOSS) TO COMMON STOCKHOLDERS:
---------- ----------
EXCLUDING NON-CASH ITEMS: $ 185 $ 245
---------- ----------
Contact Information: Contact: Jack Eversull The Eversull Group 972-378-7917 972-378-7981 (fax) E-mail: Web Site: www.atsi.net