SOURCE: FTS Group, Inc.

May 15, 2007 16:23 ET

FTS Group Reports Record 2007 Q1 Results

FTS Wireless Posts Sales Growth of More Than 40% Year-Over-Year; Company Reports First Net Profit in Its Four Year History

TAMPA, FL -- (MARKET WIRE) -- May 15, 2007 -- FTS Group, Inc. (OTCBB: FLIP), an acquisition and development Company operating in the wireless, technology and Internet space, today announced record operating results for its 2007 first quarter. The Company reported today that its wholly owned retail wireless subsidiary FTS Wireless generated top line revenue growth of more then 40% year-over-year and turned profitable. The Company will file its form 10QSB with the Securities and Exchange Commission within the next 5 days. The filing will be accessible at www.SEC.gov.

FTS Group Chairman and Chief Executive Officer Scott Gallagher stated, "I'm pleased to report to the stockholders that FTS has delivered a record operating quarter. We experienced top-line sales growth of more than 40% year over year at FTS Wireless, See World delivered another strong quarter of operating results and we paid down nearly $300,000 in outstanding debt. Due to higher legal and accounting fees experienced during the quarter we posted a consolidated loss from operations of ($46,595). Based on our current year to date results we now expect FTS Wireless to post 2007 sales in the range of $2.8 to $3.2 Million versus 2006 sales of $1.84 Million. Almost more important than the tremendous top line growth at FTS Wireless, the Company generated the first operating profit in its four-year history. FTS Wireless now expects to generate an operating profit for the full fiscal year for the first time in its history." Gallagher continued, "Since joining the Company just over a year ago our Chief Operating Officer Dave Rasmussen has led a significant turnaround at FTS Wireless, with his leadership and the momentum he's created I feel confident FTS Wireless will continue to execute our aggressive expansion plans and achieve our goals for '07."

FTS COO and CEO of See World Satellites David Rasmussen stated, "I am pleased to see continued profitability with See World. Our employees continue to work hard and deliver positive results. We continue to deliver very positive operational results for Dish Network by exceeding their expectation for meeting the key metrics they have established for us and providing outstanding service to the customers of Central Pennsylvania. We continue to work with Dish to increase our overall footprint within markets that Dish is looking to improve overall performance in and look forward to the challenges that lie ahead in those areas."

Mr. Rasmussen commented regarding FTS Wireless as follows, "I would like to thank the employees of FTS Wireless for their dedication and determination to make FTS Wireless a respected facet of the Tampa Bay community. The employees have been very instrumental in FTS' success. Now, with the first part of our growth strategy in place, we have begun to clearly see the results of that strategy. I am very pleased with the positive results we have seen from the first quarter which proves we have developed our staff and given them the tools necessary to continue our success and begin to realize the bigger picture of growth and continued positive results. I feel very confident we can achieve our ultimate goal of providing increased shareholder value through continued positive results and growth of FTS Wireless. The next 12 - 15 months will be a very exciting time for the employees of FTS Wireless and all of the shareholders of FTS."

RESULTS OF OPERATIONS


                     FTS GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006


                                                    2007          2006
                                                ------------  ------------
                                                               (restated)
REVENUES
    Service Revenue-See World Satellites, Inc.  $  1,098,458  $  1,138,036
    Product Retail Sales-FTS Wireless, Inc.          702,962       495,578
                                                ------------  ------------
                                                   1,801,420     1,633,614
                                                ------------  ------------

COST OF GOODS SOLD
    Service-See World Satellites, Inc.               176,708       209,208
    Product-FTS Wireless, Inc.                       550,623       374,274
                                                ------------  ------------
                                                     727,331       583,482
                                                ------------  ------------

GROSS PROFIT
    Service-See World Satellites, Inc.               921,750       928,282
    Product-FTS Wireless, Inc.                       152,339       121,304
                                                ------------  ------------
                                                   1,074,089     1,050,132
                                                ------------  ------------

GENERAL AND ADMINISTRATIVE EXPENSES
      Selling, general and administrative
       expenses                                    1,120,684     1,008,186
                                                ------------  ------------
                                                   1,120,684     1,008,186
                                                ------------  ------------

INCOME (LOSS) FROM OPERATIONS                        (46,595)       41,946
                                                ------------  ------------

OTHER INCOME (EXPENSE)
    Change in fair value of Derivative
     Liabilities                                      60,254    (7,478,664)
    Unrealized loss on investments                         -             -
    Interest                                        (130,524)      (39,029)
                                                ------------  ------------
                                                     (70,270)   (7,517,747)
                                                ------------  ------------


NET INCOME (LOSS)                               $   (116,865) $ (7,475,747)
                                                ============  ============

PER SHARE INFORMATION

BASIC SHARES OUTSTANDING                         154,784,894   107,195,939

NET LOSS PER COMMON SHARE
BASIC                                                  (0.00)        (0.07)



SEGMENT RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2007



                            FTS          FTS          See
                           Group       Wireless      World
                            Inc.         Inc.     Satellites      Total
                        -----------  -----------  -----------  -----------
Revenues
   External             $         -  $   702,962  $ 1,098,458  $ 1,801,420
   Internal                 375,000            -            -      375,000
                        -----------  -----------  -----------  -----------
     Segment Revenues       375,000      702,962    1,098,458    2,176,420

Cost of Goods Sold                -      550,623      176,708      727,331
                        -----------  -----------  -----------  -----------

Gross Profit                375,000      152,339      921,750    1,449,089
                        -----------  -----------  -----------  -----------

Selling, General, &
 Administrative
   External                 268,490      114,686      711,215    1,094,391
   Internal                       -       75,000      300,000      375,000
                        -----------  -----------  -----------  -----------
     Segment Selling,
      General &
      Administrative        268,490      189,686    1,011,215    1,469,391
                        -----------  -----------  -----------  -----------

Subtotal                    106,510      (37,347)     (89,465)     (20,302)
                        -----------  -----------  -----------  -----------

Change in fair value of
 derivative liabilities      60,254            -            -       60,254
Depreciation                 (6,923)     (10,137)      (9,233)     (26,293)
Amortization                (29,573)           -            -      (29,573)
Interest                   (100,443)           -         (508)    (100,951)
                        -----------  -----------  -----------  -----------

Net Income (Loss)            29,825      (47,484)     (99,206)    (116,865)

Intersegment
 Adjustments               (375,000)      75,000      300,000            -
                        -----------  -----------  -----------  -----------

                        $  (345,175) $    27,516  $   200,794  $  (116,865)
                        ===========  ===========  ===========  ===========


                     FTS GROUP, INC. AND SUBSIDIARIES

                        Consolidated Balance Sheets

                  MARCH 31, 2007 AND DECEMBER  31, 2006




                     Assets                           2007         2006
                                                  -----------  -----------
Current assets:
   Cash and cash equivalents                      $    57,617  $   115,056
   Restricted cash                                          -            -
   Accounts receivable                                 18,374      130,025
   Inventories, net                                   328,729      373,734
   Prepaid expenses and current assets                296,474      247,686
                                                  -----------  -----------
         Total current assets                         701,194      866,501

Property and equipment, net of accumulated
 depreciation                                         277,351      303,641
Unamortized discount on convertible debt              342,036      232,925
Unamortized debt issuance costs                             -       29,573
Investments                                           114,734       92,505
Goodwill                                            5,177,696    5,177,696
Deposits                                               16,482       16,482
                                                  -----------  -----------
         Total assets                             $ 6,629,493  $ 6,719,323
                                                  ===========  ===========

      Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable and accrued expenses          $   576,456  $   548,707
   Current portion of notes payable to related
    parties, net of discount                        1,886,796    1,820,215
   Convertible debentures-current portion           1,165,474    1,238,321
   Current installments of long-term
    debt-equipment loans                                    -        4,824
                                                  -----------  -----------
         Total current liabilities                $ 3,628,726  $ 3,612,067

Fair value of derivative liabilities                  392,785      453,039
Convertible debentures                                      -            -
Long-term debt to related parties, less current
 installments                                         750,000    1,000,000
                                                  -----------  -----------
         Total liabilities                        $ 4,771,511  $ 5,065,106
                                                  -----------  -----------

Stockholders' equity:
   10% Convertible Preferred Stock, Series A,
    $0.01 par value: 150,000 shares authorized;
    0 shares issued and outstanding                         -            -
   Preferred Stock, $0.01 par value, 4,850,000
    undesignated shares authorized, none issued             -            -
   Convertible Preferred Stock, Series B, $0.01
    par value: 1,000,000 Shares authorized,
    issued and outstanding at March 31, 2007           10,000       10,000
   Common stock, $.001 par value. Authorized
    855,000,000 shares: 154,784,894 shares issued
    and outstanding at March 31, 2007,
    137,650,469 shares issued and outstanding
    at December 31, 2006.                             154,785      137,650
   Additional paid-in capital                      12,532,621   12,231,626
   Accumulated deficit                            (10,821,091) (10,704,226)
                                                  -----------  -----------
         Total stockholders' equity                 1,876,315    1,675,050
                                                  -----------  -----------

Commitments and contingent liabilities                (18,333)     (20,833)

                                                  -----------  -----------
         Total liabilities and stockholders'
          equity                                  $ 6,629,493  $ 6,719,323
                                                  ===========  ===========
About FTS Group, Inc.

FTS Group, Inc. (OTCBB: FLIP) is a publicly traded acquisition and development Company operating in the Wireless, Technology and Internet space through its wholly owned subsidiaries FTS Wireless, Inc. and See World Satellites, Inc. The Company operates through retail locations in Florida and Pennsylvania and globally over the Internet through its web sites www.FTSGroup.com, www.CellChannel.com, www.SeeWorld.biz and www.FTSWireless.com. For additional information about FTS Group, Inc. or any of its wholly owned subsidiaries please review the Company's quarterly, annual and other filings with the Securities and Exchange Commission at http://www.SEC.gov or contact the Company at the e-mail or phone number below.

Forward-Looking Statements

Included in this release are certain "forward-looking'' statements, involving risks and uncertainties, which are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's financial performance. Such statements are based on management's current expectations and are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to or implied by such statements. In addition, actual future results may differ materially from those anticipated, depending on a variety of factors, sales and earnings growth, ability to attract and retain key personnel, and general economic conditions affecting consumer spending, including uncertainties relating to global political conditions, such as terrorism. Information with respect to important factors that should be considered is contained in the Company's Annual Report on Form 10-K and 10-K/A as filed with the Securities and Exchange Commission. Readers are cautioned not to place reliance on these forward-looking statements, which speak only as of the date hereof.

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