Teletouch Releases Preliminary Unaudited 2005 Results of Operations Pending Filing of Delinquent Annual Report
07 September 2005 - 10:30PM
Business Wire
Teletouch Communications, Inc. (AMEX:TLL) today released
preliminary unaudited financial information in the interest of
providing information to its shareholders with respect to the year
ended May 31, 2005. The Company released this information in light
of its previous announcement that it is delinquent in the filing of
its Annual Report on Form 10-K for the period ended May 31, 2005,
(the "10-K") for the reasons stated below. Readers are cautioned
that the financial information set forth in this release is
preliminary, has not been audited and is subject to further
analysis and independent audit. The actual audited financial
information as of May 31, 2005, and for the year then ended may
vary materially from the guidance provided by this release. Company
management estimates that revenues for the twelve months ended May
31, 2005, were approximately $25 million. Net loss for the year is
estimated to be approximately $4 million, or between $0.85 and
$0.90 per share based upon the 4.6 million weighted average shares
outstanding for the twelve month period. These results include
management's inclusion of a $0.9 million charge for impairment of
goodwill resulting from a decrease in fair value of its two-way
assets and an anticipated valuation allowance related to the
Company's deferred tax assets in which recoverability is not
considered likely. The Company recorded no impairment charges
related to the pager assets group which was disposed of subsequent
to May 31, 2005, as disclosed in a press release dated August 24,
2005. The Company cautions shareholders and potential investors
that BDO Seidman, LLP, the Company's Independent Public
Accountants, have not audited these amounts and disclaims any
responsibility for them. These results are preliminary and are
subject to change, possibly materially, following completion of the
audit. As previously announced, the Annual Report on Form 10-K has
not been filed due to an anticipated restatement of the Company's
Consolidated Statement of Operations for the years ended May 31,
2002 and 2003, and its Consolidated Balance Sheet as of May 31,
2002 and 2003. The Company further stated that it appeared that
there would be no impact on the Company's results of operations,
financial position or cash flows for the years ended May 31, 2004
and 2005, respectively. As soon as possible, the Company intends to
file its Form 10-K and the amended and restated financial
statements with the SEC after the completion of its ongoing
discussions with the SEC staff. In the interim, the Company urged
investors and other users of the Company's SEC filings not to rely
on the Company's financial statements for the years ended May 31,
2002 and 2003, to the extent they are affected by the accounting
issues described above. The readers of this press release are urged
to read carefully the Company's public announcements and regulatory
filings with the Securities and Exchange Commission, including the
press release and a Current Report on Form 8-K filed with the
Securities and Exchange Commission, both dated September 2, 2005.
AMEX Non-Compliance Notification On September 2, 2005, the American
Stock Exchange (AMEX) notified the Company that, as a result of the
Company's failure to file its Annual Report on Form 10-K for the
fiscal year ended May 31, 2005, within the prescribed timeframe,
the Company was not in compliance with the currency in public
reporting continued listing requirement under the AMEX Rules. The
AMEX staff invited the Company to submit a plan of compliance
addressing the continued listing deficiency by no later than
September 16, 2005. The Company must regain its compliance with the
AMEX listing requirements no later than November 28, 2005. On
September 2, 2005, the Company filed a Current Report on Form 8-K
(the "8-K") in which filing the Company outlined the reasons for
the delay in filing of the subject Annual Report. Namely, the
Company stated that as the result of ongoing conversations with the
SEC staff concerning the accounting for its May 2002 extinguishment
of certain junior debt (the "May 2002 Exchange Transaction") and
its November 2002 exchange of Series C Preferred Stock and
redeemable common stock purchase warrants for its Series A and
Series B Preferred Stock, warrants for the purchase of shares of
Series B Preferred Stock, common stock warrants and shares of its
common stock (the "November 2002 Exchange Transaction"), it
appeared likely that the Company would have to restate its
Consolidated Statement of Operations for the years ended May 31,
2002 and 2003, and its Consolidated Balance Sheet as of May 31,
2003. The Company further stated that it appeared that there would
be no impact on the Company's results of operations, financial
position or cash flows for the years ended May 31, 2004 and 2005,
respectively. As soon as possible, the Company intends to file the
subject Annual Report and the amended financial statements with the
SEC after the completion of its discussions with the SEC staff. In
the interim, the Company urged investors and other users of the
Company's SEC filings not to rely on the Company's financial
statements for the years ended May 31, 2002 and 2003, to the extent
they are affected by the accounting issues described above. The
Company plans to make a timely submission to the AMEX staff in
which it will outline the timeframe within which the Company
intends to cure the listing deficiency and to regain its compliance
with the AMEX continued listing requirements. In the event the AMEX
staff does not accept the Company's plan of compliance, the AMEX
staff will initiate de-listing proceedings. There is no assurance
that the AMEX staff will accept the Company's plan of compliance or
that, even if such plan is accepted, the Company will be able to
implement the plan within the prescribed timeframe. The Company may
appeal a staff determination to initiate such proceedings and seek
a hearing before an AMEX panel. The time and place of such a
hearing will be determined by the Panel. If the Panel does not
grant the relief sought by the Company, its securities could be
de-listed from the AMEX and may continue to be listed on the Pink
Sheets trading system. The Company may also apply for listing on
the OTC Bulletin Board Market when it regains currency in the
public reporting. Effective as of the open of business on September
12, 2005, the Company's stock trading symbol will become subject to
the indicator ".LF" to denote its noncompliance. The trading symbol
will bear the foregoing indicator until the Company regains its
compliance with the AMEX continued listing requirements. The
Company plans to make a timely submission to the AMEX staff in
which it will outline the timeframe within which the Company
intends to cure the listing deficiency and to regain its compliance
with the AMEX continued listing requirements. About Teletouch
Teletouch Communications, Inc., a proven U.S. leader in wireless
messaging and related network management, provides a complete suite
of mobile asset tracking solutions using sophisticated, yet
cost-effective GPS-based hardware and software products for fleets,
hazardous materials and "worker-down" emergency notification
applications. In addition to its telemetry business, Teletouch
offers two-way radio communications, cellular and wireless
messaging services throughout the United States. Teletouch's common
stock is traded on the American Stock Exchange under stock symbol:
TLL. Additional product, business and financial information for
Teletouch is available at www.Teletouch.com. This release contains
certain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Exchange Act, as amended, that are based on management's
exercise of business judgment as well as assumptions made by and
information currently available to management. When used in this
document, the words "may," "will," "anticipate," "believe,"
"estimate," "expect," "intend," and words of similar import, are
intended to identify any forward-looking statements. You should not
place undue reliance on these forward-looking statements.
Negotiations with respect to the transaction that are the subject
of this release are ongoing and may result in significant
modifications to the transaction. There can be no assurance that
the transaction that is the focus of this release will be
concluded, or if concluded that it will be concluded on terms
currently contemplated. These statements reflect our current view
of future events and are subject to certain risks and uncertainties
as noted in our securities and other regulatory filings. Should one
or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, our actual results could
differ materially from those anticipated in these forward-looking
statements. We undertake no obligation and do not intend to update,
revise or otherwise publicly release any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of any unanticipated
events. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance that our
expectations will materialize. Many factors could cause actual
results to differ materially from our forward-looking statements.
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