-- 4 consecutive quarters of record revenue: + 182% growth in 1st quarter + 140% growth in 2nd quarter + 99% growth in 3rd quarter + 87% growth in 4th quarter -- 4 consecutive quarters of positive cash flow from operations and 3 consecutive quarters of net profits -- $1.8 million improvement in total assets -- $1.4 million reduction in total liabilities -- ATSI secured $1.2 million accounts receivable financing package to fund continued growth -- ATSI upgraded to IntelliConnect™ System and expanded Company's VoIP network by 40% with NexTone Communications to support growthArthur L. Smith, CEO of ATSI, stated, "We had a phenomenal year during which our team met key financial and operational goals that solidifies a successful track record of execution over the last 3 fiscal years. We exceeded our objective of doubling revenues year over year while producing net earnings per share earlier than expected." Mr. Smith added, "I commend our team for consistently delivering on the Company's goals and objectives over the last 12 quarters. Although we expect our growth trend to continue and result in record annual revenues for FY2008, our management team is emphasizing improvements in gross margin and cash flow from operations. We also anticipate a continued increase in the value of our assets that includes improving our cash reserve during the year." Excluding non-cash items, net income to common stockholders for the year ended July 31, 2007 was $890,000 vs. a net loss to common stockholders of $63,000 for the previous year ended July 31, 2006. For FY2007 the Company incurred $602,000 in non-cash compensation and warrant expense. Additional non-cash items incurred during the year include depreciation and amortization expense, interest expense, bad debt expense, debt forgiveness income, loss on derivative instrument liabilities, gain on disposal of discontinued operations and preferred dividend expense. 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 include 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) Years ended July 31, 2007 2006 ----------- ----------- OPERATING REVENUES: Carrier services $ 31,562 $ 14,549 Communication services 113 125 Network services 17 22 ----------- ----------- Total operating revenues 31,692 14,696 ----------- ----------- OPERATING EXPENSES: Cost of services (exclusive of depreciation and amortization, shown below) 29,521 13,869 Selling, general and administrative expense (exclusive of legal and professional fees) 1,625 1,138 Legal and professional fees 258 195 Bad debt expense 98 - Depreciation and amortization expense 99 92 ----------- ----------- Total operating expenses 31,601 15,294 ----------- ----------- OPERATING INCOME (LOSS) 91 (598) ----------- ----------- OTHER INCOME (EXPENSE): Loss on derivative instrument liabilities - (6) Debt forgiveness income - 50 Interest expense (348) (151) ----------- ----------- Total other income (expense), net (348) (107) ----------- ----------- INCOME (LOSS) FROM CONTINUING OPERATIONS (257) (705) ----------- ----------- DISCONTINUED OPERATIONS Gain on disposal of discontinued operations - 1,652 ----------- ----------- INCOME FROM DISCONTINUED OPERATIONS - 1,652 ----------- ----------- NET INCOME (LOSS) $ (257) $ 947 LESS: PREFERRED DIVIDEND (56) (959) ADD: REVERSAL OF PREVIOUSLY RECORDED PREFERRED DIVIDEND 828 - ----------- ----------- NET INCOME (LOSS) TO COMMON STOCKHOLDERS $ 515 $ (12) =========== =========== BASIC INCOME (LOSS) PER SHARE: From continuing operations $ 0.02 $ (0.12) From discontinued operations $ - $ 0.12 Total $ 0.02 $ 0.00 =========== =========== DILUTED INCOME (LOSS) PER SHARE From continuing operations $ (0.01) $ (0.02) From discontinued operations $ - $ 0.05 Total $ (0.01) $ 0.03 =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 27,908,044 13,516,342 DILUTED COMMON SHARES OUTSTANDING 28,049,739 31,287,366 NET INCOME (LOSS) TO COMMON STOCKHOLDERS: $ 515 $ (12) ----------- ----------- EXCLUDING NON-CASH ITEMS: ADD: Non-cash issuance of common stock and warrants for services 129 176 Non-cash stock-based compensation, employees 473 267 Bad debt expense 98 - Depreciation and amortization 99 92 Interest expense 348 151 MINUS: Debt forgiveness income - 50 Loss on derivative instrument liabilities - (6) Gain on disposal of discontinued operations - 1,652 Preferred dividend 772 (959) NET INCOME (LOSS) TO COMMON STOCKHOLDERS: ----------- ----------- EXCLUDING NON-CASH ITEMS: $ 890 $ (63) ----------- -----------
Contact Information: Contact: Jack Eversull The Eversull Group 972-378-7917 972-378-7981 (fax) E-mail: Web Site: www.atsi.net