NEWS RELEASE
Contact: Karen R. Mella, Director Investor Relations (210) 558-6090
E-mail: kmella@atsi.net
Web Site: www.atsi.net
AMERICAN TELESOURCE REPORTS THIRD QUARTER AND NINE MONTH RESULTS; THIRD
CONSECUTIVE QUARTER OF POSITIVE EBITDA
ATSI TO HOST EARNINGS CONFERENCE CALL
(see details below)
SAN ANTONIO, TEXAS, June 7, 1999… American TeleSource International, Inc.
(ATSI) (OTCBB: AMTI-news) today reported revenues for its third quarter
ending April 30, 1999, of $7.4 million compared to $8.8 million for the
same period in the prior year. For the nine months ending April 30, 1999,
the Company reported revenues of $25.8 million, representing a 9% increase
over the $23.6 million reported during the previous year's nine-month
period.
The decline in revenues for the three-month period ending April 30, 1999 is
principally the result of the Company's strategy to focus on core product
offerings which best utilize its own network infrastructure. In an effort
to improve overall gross margins and reduce selling, general and
administrative costs, the Company ceased providing U.S.-based call services
in July of last year, and decreased the level of call services business
with third-party owned telephones and hotels in Mexico, Jamaica and the
Dominican Republic. As a result, call services revenues declined between
periods. However, the objective of improving operating results was
achieved. Following are highlights from the periods ended April 30, 1999
compared to the prior year periods:
THIRD QUARTER PERIOD
· Third consecutive quarter to report positive EBITDA (earnings before
interest, tax, depreciation and amortization) of $49,000, compared to
approximately $853,000 negative EBITDA for the same period of the prior
year
· 44% gross margin compared to 37% in the prior year period
· Selling, general and administrative (SG&A) expenses decreased
approximately $914,000 from the third quarter of the prior year period
· Net loss of $1.3 million, or $0.03 per share, compared to a net loss of
$1.9 million, or $0.04 per share, in the prior year period
NINE MONTH PERIOD
· $511,000 positive EBITDA compared to $1.1 million negative EBITDA for
the prior year period
· 40% gross margin compared to 39% in the prior year period
· SG&A expenses decreased approximately $400,000 from the same period of
the prior year
· A reduction in SG&A expenses, as a percentage of revenues, to 38% from
43% reported in the prior year period
· Net loss of $3.0 million, or $0.07 per share, as compared to a net loss
of $3.7 million, or $0.09 per share, in the prior year period
Randy Poole, ATSI's President, stated, "We had anticipated that the
decrease in call services revenues would be more than offset with revenues
generated from other services. However, this offset did not occur as
expected due to the previously announced delays in establishing the fiber
route between the U.S. and Mexico. Now that the fiber route is secured, as
announced on June 4, the Company is once again positioned for growth into
the future."
Arthur L. Smith, Chairman and CEO of ATSI, stated, "We remain focused on
improving our corporate framework of licenses, agreements, network and
distribution channels, a fundamental component necessary to increase ATSI's
value. As we continue strengthening our framework, we also produced a
third consecutive quarter of positive EBITDA and healthy gross margins.
With the recent completion of our ATM fiber network to Mexico, we are
confident that our future will be marked by increased revenues, lower
direct costs and reduced SG&A expenses."
American TeleSource International, Inc. is an emerging multinational
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 transport.
ATSI has clear advantages over the competition through its corporate
framework consisting of unique licenses, interconnection and service
agreements, network footprint, and extensive distribution channels. ATSI's
wholly-owned subsidiary, GlobalSCAPE, Inc. (www.globalscape.com) is rapidly
becoming a leader in electronic commerce of top Internet-based software,
utilizing the Web as an integral component of its development, marketing,
distribution and customer relationship strategies.
The certain statements contained herein (for example, "Now that the fiber
route is secured, as announced on June 4, the Company is once again
positioned for growth into the future." and "…that our future will be
marked by increased revenues, lower direct costs and reduced SG&A
expenses.") are considered "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements are
based upon the belief of the Company's management, as well as assumptions
made beyond information currently available to the Company's management.
Because such "forward-looking statements" are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause
results to differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to, price
competition, the inability to obtain additional capital, loss of key
personnel, unavailability of leased transmission facilities, damage, loss
or malfunction of satellites, fiber cuts, technological changes, service
interruptions, equipment failures, customer attrition, general economic
conditions, relationships with vendors, government supervision and
regulation, changes in industry practices, and other factors discussed in
filings made by the Company with the Securities and Exchange Commission.
ATSI EARNINGS CONFERENCE CALL
The conference call will be held on Tuesday, June 8, 1999 at 10:00 a.m.
CST.
To participate in the conference call dial (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 11:00
a.m. Tuesday, June 8, through 7:00 p.m. and Wednesday, June 9, beginning at
7:00 a.m. through 7:00 p.m. CST.
American TeleSource International, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ending Nine Months Ending
April 30, April 30,
1998 1999 1998 1999
Call services $3,875 $1,816 $10,382 $5,143
Direct dial services 1,515 1,629 4,657 4,474
Network management services 2,950 3,307 7,477 14,319
Internet E-commerce 493 679 1,053 1,856
Total operating revenues 8,833 7,431 23,569 25,792
Cost of services 5,532 4,142 14,435 15,467
Gross margin 3,301 3,289 9,134 10,325
SG&A expenses 4,154 3,240 10,240 9,814
EBITDA (853) 49 (1,106) 511
Depreciation and amortization 628 942 1,508 2,349
Interest expense 357 398 1,086 1,178
Other, net (67) 39 (117) (18)
Loss before income tax expense (1,771) (1,330) (3,583) (2,998)
Foreign income tax expense 152 (17) 152 45
Net loss ($1,923) ($1,313) ($3,735) ($3,043)
Less: Preferred stock dividends - (31) - (31)
Net loss to common shareholders ($1,923) ($1,344) ($3,735) ($3,074)
Net loss per share ($0.04) ($0.03) ($0.09) ($0.07)
Weighted average common shares
outstanding 43,447 46,816 39,612 46,249
Gross profit margin 37% 44% 39% 40%
SG&A expenses as a % of revenue 47% 44% 43% 38%
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