American TeleSource Reports First Quarter Results
December 6, 1999 08:46 AM
SAN ANTONIO, Texas--(BUSINESS WIRE)--Dec. 6, 1999--
e-commerce subsidiary's monthly downloads increase to over 900,000 during November
ATSI TO HOLD EARNINGS CONFERENCE CALL Monday, December 6 at 10:00 a.m. CST (see details below)
American TeleSource International, Inc. "ATSI" AMTI today reported results for its first quarter ended October 31, 1999. Revenues for the quarter were $9.5 million compared to revenues of $10.2 million for the same period in the prior year. EBITDA results and net loss before preferred dividends for the quarter were ($566,000) and $2.0 million, respectively, compared to $402,000 and a net loss of $642,000 in the prior year.
Revenues were down slightly between periods due to a decline in the number of operator-assisted calls processed by the Company, continued pricing pressures on the Company's network transport services business, and the termination or expiration of several private network contracts. On a quarter to quarter basis, the Company handled fewer calls for third party owned premises, which typically carry a higher cost due to the commissions paid to the premise owner. The Company also experienced a decline in the number of operator assisted calls from its own payphones and Communications Centers due to the introduction of prepaid calling services into the Mexican market. The volume of network transport business processed by the Company increased 59% on a quarter to quarter basis, but the price at which the Company provided the traffic declined, resulting in lower carrier services revenues. The Company did experience an increase in revenues produced by local and intra-Mexico long distance calls from its payphones and Communication Centers on a quarter to quarter basis.
The Company's e-commerce subsidiary, GlobalSCAPE, continued to generate revenues at a near record pace, producing 39% more revenues in the first quarter of fiscal 2000 than in the same period in the prior year. GlobalSCAPE has steadily increased monthly revenues generated from ad banners since it began advertising to its user base in April 1999.
The Company's overall gross margin was down 5% on a quarter to quarter basis due in part to the effects of pricing pressures on the Company's network transport business, but also due to the Company's investment in additional fiber optic network capacity. This additional fiber capacity caused the Company to maintain excess satellite capacity during the first quarter of fiscal 2000. However, effective October 1999, the Company reached an agreement with its satellite bandwidth provider, which not only reduces the capacity and the cost of bandwidth used currently by the Company, but also ensures the Company will have sufficient bandwidth needed to carry out its business plan in the future.
The Company's selling, general and administrative (SG&A) expenses increased on a quarter-to-quarter basis as the Company invested in the development and rollout of new products at GlobalSCAPE over the past twelve-month period, and incurred one-time costs during the quarter related to the consolidation of its operations in Mexico. During the three month period ending October 31, 1999, GlobalSCAPE experienced record-level downloads of its software products via the Internet. Downloads of products typically lead to purchases of the software on a 45 to 60 day lag, increasing the user base that may be targeted with in-product banner advertisements.
During the quarter ended October 31, 1999, the Company moved closer to fully integrating its operating segments in Mexico by reducing the number of employees at its Guadalajara office. The integration is part of the Company's ongoing effort to reduce SG&A costs. In doing so, the Company incurred one-time expenses relating to severance pay. The Company anticipates this integration to be completed by the end of December 1999, and that the Company's Guadalajara offices will be closed.
Arthur L. Smith, Chairman and Chief Executive Officer, stated, "We made some key decisions this past quarter that resulted in investing resources in areas that support our near and long-term objectives. We moved our financial commitments on reserved satellite capacity forward to correspond with our long-term network expansion plans in Mexico. We invested in new product development at GlobalSCAPE that has already resulted in record-breaking results. From July to November, monthly ad banner impressions increased by 206%, from 9.8 million to over 30 million, while monthly software product downloads increased by 50% during the same period, from 600,000 to over 900,000. Finally, we moved to reduce SG&A expenses in Mexico by consolidating operations, which has already resulted in reducing our headcount by 40 and eliminating certain offices."
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 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 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.
ATSI EARNINGS CONFERENCE CALL
The conference call will be held today, December 6, 1999 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, December 6, through 7:00 p.m. Tuesday, December 7
CST.
American TeleSource International, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended October 31,
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1998 1999
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Call Services
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Integrated Prepaid $1,268 $1,401
Postpaid 1,699 1,175
Network Services
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Carrier 5,626 5,368
Private Network 1,087 737
e-commerce 556 773
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Total operating revenues 10,236 9,454
Cost of services 6,501 6,526
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Gross margin 3,735 2,928
Selling, general and administrative 3,109 3,374
Bad debt expense 224 120
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EBITDA 402 (566)
Depreciation and amortization 649 908
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Operating loss (247) (1,474)
Other income (expense) (384) (473)
Foreign income tax expense (11) 0
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Net loss ($642) ($1,947)
Less: Preferred dividends 0 1,260
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Net loss to common shareholders ($642) ($3,207)
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Basic and diluted loss per share ($0.01) ($0.07)
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Weighted average common
shares outstanding 45,627 48,687
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sw/sa
CONTACT: American TeleSource International, Inc. Karen R. Mella Director, Investor Relations (210) 547-1000 kmella@atsi.net atsi.net
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