Teletouch Reports Financial Results for Fiscal 2006
20 September 2006 - 8:51AM
Business Wire
Teletouch Communications, Inc. (AMEX:TLL), a leading U.S. wireless
communications services company today announced its financial
results for the fiscal year ended May 31, 2006. NOTE to INVESTORS
and ANALYSTS: The Teletouch financial results as reported for
fiscal year 2006 are primarily related to the Company's paging
business that was sold on August 14, 2006. On August 11, 2006,
Teletouch acquired Progressive Concepts, Inc. (PCI), a Cingular(R)
Wireless Master Distributor, Reseller and Mobile Virtual Network
Operator (MVNO), commonly controlled by Teletouch Chairman, Robert
M. McMurrey, with unaudited gross revenues of approximately $88.1
million for the fiscal year ended December 31, 2005. As a result of
this acquisition and the subsequent sale of the paging business,
the historical financial results as reported are not indicative of
future operating results. The first fiscal quarter of 2007
consolidated operations and complete prior year financial
information will be available in October through the Company's
currently scheduled 10-Q and acquisition related amended 8-K public
filings. In addition, Teletouch's results for the first quarter
ended August 31, 2006, will include PCI's operations and prior
periods will be restated to include PCI's historical financial
statements and financial information due to accounting for the
business combination in a manner similar to a pooling of interests,
i.e., meaning that the historical basis of the net assets of PCI
are combined from the beginning of the period as if the
transactions had occurred at that date. Teletouch CEO, T. A. "Kip"
Hyde, Jr. stated, "PCI has been a privately-held company for over
thirty years and we are in the process of migrating core systems
and processes under Teletouch to improve overall profitability,
keeping in mind that this acquisition will have the impact of
increasing Teletouch's annual revenues some 400% when compared
year-over-year. In addition, we plan to use PCI as a solid
foundation for growth, both internally and through acquisition
activities in similar services markets and distribution spaces."
Teletouch total revenues for fiscal 2006 were $20.9 million
compared with $24.7 million in fiscal 2005. Total paging revenues
totaled $15.2 million in fiscal 2006, or 72.5% of total revenues.
Two-way radio service and product sales accounted for $5.2 million,
or approximately 24.7% of fiscal 2006 revenues. The Company
recorded an operating loss of $0.57 million for fiscal 2006
compared with $3.7 million in fiscal 2005. The decline in operating
income was primarily due to the decline in service revenues from
fewer pagers in service. The Company recorded a net loss applicable
to common stockholders of $1.2 million, or $0.04 per share in
fiscal 2006 compared with a net loss applicable to common
stockholders of $3.5 million, or $0.75 per share in fiscal 2005.
More detailed information relating to the acquisition of PCI, the
sale of the paging assets and the related contractual arrangements
executed in connection therewith may be found in the Current
Reports on Form 8-K, as well as the current 10-K recently filed by
Teletouch. About Teletouch Communications For over 40 years,
Teletouch has offered a comprehensive suite of telecommunications
products and services, including cellular, two-way radio
communications, GPS-telemetry and wireless messaging services
throughout the United States. Teletouch's wholly-owned subsidiary,
Progressive Concepts, Inc., is a leading U.S. provider of wireless
cellular voice, data, and entertainment products and branded
wireless services to individuals, businesses, and government
agencies. PCI provides these products and services through its
chain of retail stores (under the "Hawk Electronics" brand),
Hawk-branded agents, a direct sales force in Texas and Arkansas,
and through the Internet (www.hawkelectronics.com). PCI also
operates a significant national wholesale distribution business
serving smaller cellular and automotive retailers, car dealers and
cellular service providers throughout the country. Teletouch's
common stock is traded on the American Stock Exchange under stock
symbol: TLL. Additional information about Teletouch can be found
at: www.teletouch.com. All statements in this news release that are
not based on historical fact are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 and the provisions of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended (which Sections were adopted as part of the
Private Securities Litigation Reform Act of 1995). While management
has based any forward-looking statements contained herein on its
current expectations, the information on which such expectations
were based may change. These forward-looking statements rely on a
number of assumptions concerning future events and are subject to a
number of risks, uncertainties, and other factors, many of which
are outside of our control, that could cause actual results to
materially differ from such statements. Such risks, uncertainties,
and other factors include, but are not necessarily limited to,
those set forth under the caption "Additional Factors That May
Affect Our Business" in the Company's most recent Form 10-K and
10-Q filings, and amendments thereto. In addition, we operate in a
highly competitive and rapidly changing environment, and new risks
may arise. Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual results. We
disclaim any intention to, and undertake no obligation to, update
or revise any forward-looking statement. -0- *T TELETOUCH
COMMUNICATIONS, INC. AND SUBSIDIARIES Financial Highlights (in
thousands, except per share amounts) Three Months Ended May 31,
2006 May 31, 2005 ------------ ------------ Operating revenues:
Service, rent and maintenance revenue $3,859 $4,691 Product sales
revenue 1,101 1,292 Total operating revenues 4,960 5,983 Operating
(loss) (368) (2,410) Net loss (464) (2,329) Loss per share -- basic
and diluted (0.01) (0.48) TELETOUCH COMMUNICATIONS, INC. Selected
Balance Sheet Highlights (In thousands) May 31, 2006 May 31, 2005
------------ ------------ Cash and cash equivalents $2,129 $1,283
Current portion of long-term debt 93 74 Long-term debt, net of
current portion 49 102 TELETOUCH COMMUNICATIONS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except shares and per share amounts) Year ended May 31,
--------------------------------- 2006 2005 2004 -----------
---------- ---------- Operating revenues: Service, rent, and
maintenance revenue $16,733 $19,922 $23,192 Product sales revenue
4,173 4,747 3,562 ----------- ---------- ---------- Total operating
revenues 20,906 24,669 26,754 ----------- ---------- ----------
Operating expenses: Cost of service, rent and maintenance
(exclusive of depreciation and amortization included below) 9,670
10,852 11,025 Cost of products sold 2,614 4,273 3,184 Selling and
general and administrative 6,901 8,449 8,613 Depreciation and
amortization 2,123 3,218 3,726 Impairment of goodwill -- 551 --
Loss on disposal of assets 172 1,019 372 ----------- ----------
---------- Total operating expenses 21,480 28,362 26,920
----------- ---------- ---------- Operating loss (574) (3,693)
(166) Interest expense, net (448) (432) (357) -----------
---------- ---------- Loss before income tax expense (benefit) and
extraordinary item (1,022) (4,125) (523) Income tax expense
(benefit) 152 (673) 60 ----------- ---------- ---------- Loss
before extraordinary item (1,174) (3,452) (583) Extraordinary
item-Gain derived from negative goodwill on sale of certain assets,
net of income tax of $0 -- -- 64 ----------- ---------- ----------
Net loss $(1,174) $(3,452) $(519) =========== ========== ==========
Loss per share -- basic and diluted: Loss before extraordinary item
$(0.04) $(0.75) $(0.12) Extraordinary item -- -- 0.01 -----------
---------- ---------- Loss $(0.04) $(0.75) $(0.11) ===========
========== ========== Weighted average shares outstanding -- basic
and diluted 30,221,678 4,623,164 4,546,980 =========== ==========
========== *T
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