-- 37% year-over-year revenue growth from $8.1 million to $11.1 million
driven by a 30% increase in VoIP carrier services traffic from
approximately 112 million minutes of voice traffic during the quarter ended
April 30, 2007 to approximately 145 million minutes of voice traffic during
the quarter ended April 30, 2008
-- Record gross profit of $787,000
-- Record cash flow from operations of $287,000
-- 8th consecutive quarter of positive cash flow from operations
-- 6th consecutive quarter of net positive earnings per share on total
net income to common stockholders of $95,000
-- Removal of "going concern" opinion
-- Wells Fargo increased ATSI's factoring line from $3 million to $5
million
-- Board of Directors approved a share buyback plan allowing the Company
to purchase up to $1 million of ATSI's common stock
-- ATSI doubles Internet bandwidth capacity with XO Communications
Arthur L. Smith, Chief Executive Officer of ATSI Communications, stated,
"We continue to perform as demonstrated by record revenues, record gross
profit, record cash flow from operations and the removal of our going
concern opinion. The removal of our going concern opinion is a direct
result of our strong and consistent financial performance over the past 8
fiscal quarters and expected financial performance for the next 12 months."
Mr. Smith added, "We are fortunate to participate in a growing market that
is currently estimated at 340 billion minutes of global voice traffic. We
will not deviate from our objective of increasing ATSI's market share of
this lucrative global market for voice communications."
Financial Results
Total revenues were $11.1 million compared to $8.1 million in the third
quarter of 2007. This 37% year-over-year increase in revenues is primarily
attributable to a 30% year-over-year increase in voice traffic. Gross
profit was $787,000 during the quarter ended April 30, 2008, compared to
$493,000 during the third quarter last year. Non-GAAP net income to common
stockholders for the third fiscal quarter of 2008 was $287,000 compared to
a non-GAAP net income to common stockholders of $227,000 in last year's
third fiscal quarter. The Company incurred $192,000 in net non-cash
expenses during the quarter ended April 30, 2008 vs. $152,000 in net
non-cash benefits during the quarter ended April 30, 2007. Non-cash
benefits and or expenses incurred during the period include depreciation,
amortization, interest, stock compensation and preferred dividends.
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
expenses, including non-cash stock-based compensation 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.
About ATSI Communications, Inc.
ATSI Communications, Inc. operates through its wholly owned subsidiary,
Digerati Networks, Inc. Digerati Networks 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 NextPoint powered VoIP network, ATSI believes
it has clear advantages over its competition. 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
April 30,
2008 2007
------------ ------------
OPERATING REVENUES:
Carrier services $ 11,147 $ 8,113
Communication services 24 27
------------ ------------
Total operating revenues 11,171 8,140
------------ ------------
OPERATING EXPENSES:
Cost of services (exclusive of depreciation
and amortization, shown below) 10,384 7,647
Selling, general and administrative expense
(exclusive of legal and professional fees) 555 317
Legal and professional fees 86 84
Bad debt expense (23) 29
Depreciation and amortization expense 42 24
------------ ------------
Total operating expenses 11,044 8,101
------------ ------------
OPERATING INCOME 127 39
------------ ------------
OTHER INCOME (EXPENSE):
Debt forgiveness income - -
Interest income (expense) (32) (253)
------------ ------------
Total other income (expense), net (32) (253)
------------ ------------
NET INCOME (LOSS) 95 (214)
------------ ------------
LESS: PREFERRED DIVIDEND - (7)
ADD: REVERSAL OF PREVIOUSLY RECORDED PREFERRED
DIVIDEND - 600
------------ ------------
NET INCOME TO COMMON STOCKHOLDERS $ 95 $ 379
============ ============
BASIC INCOME PER SHARE: $ 0.00 $ 0.01
============ ============
DILUTED INCOME PER SHARE $ 0.00 $ 0.01
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 39,186,590 37,005,780
DILUTED COMMON SHARES OUTSTANDING 38,778,587 39,842,780
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NET INCOME TO COMMON STOCKHOLDERS, as reported: $ 95 $ 379
------------ ------------
EXCLUDING NON-CASH ITEMS:
ADD:
Non-cash issuance of common stock and
warrants for services 56 83
Non-cash stock-based compensation, employees 85 52
Bad debt expense (23) 29
Depreciation and amortization 42 24
Interest expense 32 253
MINUS:
Debt forgiveness income - -
Preferred dividend - 593
NET INCOME TO COMMON STOCKHOLDERS EXCLUDING ------------ ------------
NON-CASH ITEMS: $ 287 $ 227
============ ============
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Contact Information: Contact: Jack Eversull The Eversull Group 972-378-7917 972-378-7981 (fax) E-mail: Web Site: www.atsi.net