American TeleSource Reports Second Quarter Results
March 7, 2000 09:05 AM
SAN ANTONIO--(BUSINESS WIRE)--March 7, 2000--American TeleSource International, Inc. AI
-- Positive EBITDA results for the quarter
-- SG&A expenses decrease to 30% from 38%, as a percentage of revenues
-- Internet subsidiary, GlobalSCAPE, experiences record product downloads
-- GlobalSCAPE generates 106% revenue growth
ATSI TO HOLD EARNINGS CONFERENCE CALL Tuesday, March 7, at 10:00 a.m. CST (see details below)
American TeleSource International, Inc. "ATSI" AI today reported results for the three and six month periods ending January 31, 2000. For the quarter, the Company reported a 31% increase in revenues to $10.7 million compared to $8.1 in the prior year, and positive EBITDA of $231,000 compared to $61,000 in the prior year. The net loss before preferred dividends for the quarter was $1.8 million as compared to $1.1 in the prior year.
For the six month period ending January 31, 2000, revenues were $20.1 million compared to $18.4 million during the same period of the previous year. EBITDA results and net loss, before preferred dividends, for the six month period were ($336,000) and $3.8 million, respectively, for the current year, compared to $463,000 and $1.7 million, respectively, for the prior year.
The approximately 31% increase in revenues between quarters is due to an increase in the volume of network services processed by the Company, as well as increased E-commerce activity from the Company's wholly owned subsidiary, GlobalSCAPE. The Company processed a record volume of international carrier services during the quarter. GlobalSCAPE produced record revenues of $1.3 million, a 106% increase over the prior years' quarter. Integrated prepaid services provided by the Company also increased slightly between periods, led by retail-based intra-Mexico traffic produced by the Company's Communication Centers located throughout that country. Postpaid call services revenues declined from period to period as the Company continued to focus on generating these calls from its own properties, rather than those owned by third parties. In addition, in an effort to increase margins on a per call basis, the Company began using third-party owned operator centers to process its operator-assisted calls during the quarter. This also resulted in reduced revenues on a per call basis. Private network revenues declined on a period to period basis, due to the termination or expiration of several private network contracts.
During the quarter ending January 31, 2000, the Company's consolidated gross margin declined to 33% from 41% reported in last year's quarter. Although the Company transported a record amount of traffic during the quarter, the percentage of overall revenues generated by lower margin carrier services increased to 59% compared to 38% in last year's quarter.
Selling, general and administrative ("SG&A") expenses increased to $3.3 million over $3.1 million on a quarter to quarter basis, but decreased as a percentage of revenues to 30% from 38%. The increase in expenses was primarily attributable to the Company's continuing investment in the development and rollout of new products at GlobalSCAPE. SG&A expenses related to the Company's telecommunications operations remained relatively constant on a quarter to quarter basis, in spite of the fact that the Company incurred one-time costs during the January 31, 2000 quarter related to the consolidation of its Mexican operations.
Arthur L. Smith, Chairman and Chief Executive Officer, stated, "On average, ATSI continues to outperform its peer group in various categories such as gross margin and EBITDA results. Also, during the second quarter we gained significant momentum leading to the delivery of some key corporate goals, including a primary stock exchange listing. We also initiated activities that I expect will meet future objectives related to strengthening our balance sheet, financing and expanding our proprietary network in Mexico and the U.S., shifting toward a more retail oriented revenue blend, and funding growth opportunities."
American TeleSource International, Inc. is an emerging international carrier serving certain niche markets in and between Latin America and the United States. 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 and data. 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. ATSI's wholly owned subsidiary, GlobalSCAPE, Inc. (www.globalscape.com) is a leading provider of Internet-based software including file management utilities, Web site development tools and multimedia utilities. With the Internet at the core of its development, marketing, distribution and customer support strategies, GlobalSCAPE is able to provide millions of users with complementary content and a variety of online services designed to enhance their use of its award-winning products.
This News Release contains "forward looking statements," which are statements that 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. Risks that could cause these statements not to be true include loss of key customers, inability to obtain additional capital, inability to make payments to suppliers and lenders on time, dilution of our common stock, equipment failures leading to service interruptions, failure to achieve profitability, and other Risk Factors discussed in filings made by the Company with the SEC.
ATSI EARNINGS CONFERENCE CALL
The conference call will be held today, March 7, 2000 at 10:00 a.m. CST.
The conference call number is 888/222-2994.
For your convenience, the call will be recorded and may be replayed by dialing 973/694-6836. This service will be available beginning at 12:00 noon today, March 7, through 7:00 p.m. Wednesday, March 8, CST.
American TeleSource International, Inc.
Consolidated Statement of Operations
(in thousands, except per share data)
Three months ended Six months ended
January 31, January 31,
------------------- --------------------
1999 2000 1999 2000
-------- -------- -------- --------
Operating Revenues
Network Services
Carrier $ 3,118 $ 6,290 $ 8,743 $ 11,658
Private Network 1,181 602 2,269 1,339
Call Services
Integrated Prepaid 1,356 1,515 2,624 2,916
Postpaid 1,849 992 3,548 2,167
E-Commerce 621 1,281 1,177 2,054
-------- -------- -------- --------
Total operating revenues 8,125 10,680 18,361 20,134
Cost of services 4,824 7,104 11,325 13,631
-------- -------- -------- --------
Gross margin 3,301 3,576 7,036 6,503
Selling, general and
administrative 3,077 3,252 6,186 6,627
Bad debt expense 163 93 387 212
-------- -------- -------- --------
EBITDA 61 231 463 (336)
Depreciation and
amortization 758 1,427 1,407 2,335
-------- -------- -------- --------
Operating loss (697) (1,196) (944) (2,671)
Other income (expense) (392) (616) (787) (1,088)
-------- -------- -------- --------
Net loss ($ 1,089) ($ 1,812) ($ 1,731) ($ 3,759)
Less: Preferred
dividends 0 (634) 0 (1,894)
-------- -------- -------- --------
Net loss to common
shareholders ($ 1,089) ($ 2,446) ($ 1,731) ($ 5,653)
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Basic and diluted loss
per share ($ 0.02) ($ 0.05) ($ 0.04) ($ 0.11)
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Weighted average common
Shares outstanding 46,324 50,058 45,976 49,372
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CONTACT: American TeleSource International Inc., San Antonio Karen R. Mella, 210/547-1000 E-mail: kmella@atsi.net Internet: atsi.net
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