FORT WORTH, Texas, Mar 27, 2009 (BUSINESS WIRE) ----Teletouch Communications, Inc. (OTC: TLLE), a prime U.S. cellular services provider and mechanical electronics retailer, today reported its consolidated results for the 1st Quarter 2009 pecuniary year on Form 10-Q, for the space ended August 31, 2008.
"The continuing turn-around and thoroughgoing monetary burden resulting from the primary corporate restructuring undertaken in October of remain year becomes happily ostensible when comparing this year's original zone results to that of the late year," stated T. A. "Kip" Hyde, Jr., President, COO and Director of Teletouch. "After adjusting for the one-time margin on the roaming confirmation with AT&T booked in the fundamental mercifulness of the 2008 monetary year, the Company's results are now demonstrated in significantly moderate SG&A expenses and improved operating margins.
Specifically, after adjusting for the one-time gain, operating profit for the economic from the start post 2009 was approximately $270,000 vs. an operating disadvantage of approximately $643,000 in the latest year comparative period. Teletouch's adjusted EBITDA (a non-GAAP rate more fully described below) for this while also increased to a unmistakable approximately $644,000 in the budgetary outset fourth from a disputing adjusted EBITDA of $226,000 in the comparative ex year period." Hyde continued, "As times reported, our recently signed Exclusive Retailer Agreement and retail enlargement with T-Mobile has thus far achieved better than expected results through our firstly revealing month of operations, and we are gravid to initiate more retail locations with T-Mobile in the future, for both renewed markets, as well as potentially in markets where we are currently restricted to exclusively providing AT&T services under our various classification agreements. Having the time to grow, expanding distribution, hiring unfledged employees and investing in immature technologies in the centre of one of the worst trade climates in memory, is entire deposition to the will-power of the wireless toil as a whole.
" The Company is cabal to six (6) allocation agreements with AT&T Mobility (NYSE: T), its successors and assigns, which lend for the Company to group AT&T wireless services, on an stylish basis, in principal markets in Texas and Arkansas, including the Dallas/Fort Worth, Texas Metropolitan Statistical Area ("MSA"); San Antonio, Texas MSA; Austin, Texas MSA; Houston, Texas MSA; East Texas Regional MSA; and Arkansas, including on the whole the Little Rock, Arkansas MSA. These also parceling out agreements permit the Company to exclusively proposal AT&T cellular phone utility and produce billing patron services to its customers on behalf of AT&T, with like pricing characteristics in quarrel for non-specific compensation and fees, that are fundamentally in the genre of yield sharing for the nucleus wireless services that the Company bills on behalf of AT&T, and whereby the Company retains all of the take and proceeds from products and services it sells on its own behalf. The Company is trustworthy for all of the billing and accumulation of cellular charges from its customers, and remains vulnerable to AT&T for a set piece of all AT&T-related cellular appointment bloke billings. The Company believes that because of the bulk of problem transacted with AT&T, as well as the net generated from AT&T, there is a significant concentration of trust and responsibility endanger involved with having AT&T as a pre-eminent vendor.
The Company's largest division agreement with AT&T, for the Dallas/Fort Worth, Texas MSA, was amended efficacious September 1, 1999 with an original label of 10 years (the "DFW Agreement"). The DFW Agreement provides for two 5 year extensions unless either seconder provides written attention to the other junto at least 6 months earlier to the ending of the prime length of time or the additional renewal term, although indubitable billing services and other obligations proceed for many years after the initial term expires, in some cases in perpetuity. That is, specifically, under the terms of its cataloguing compatibility with AT&T, the Company is allowed to extend to secondment its existing subscriber stand until the subscribers themselves terminate service with the Company; AT&T has no order control over when or if a subscriber terminates its amenities agreements with the Company, is obligated to persist to provide services and, in fact, is prohibited from without delay soliciting our customers, with well-established penalties for violations incurred (e.g., $1,000 per case as further described below).
The inaugural style of the DFW Agreement expires in September 2009, and the Company received the required 6 month information from AT&T in February 2009, stating that they will not on the DFW Agreement with the Company beyond the conclusion date. As a upshot of the above close of the DFW Agreement, the exclusivity requirements under the compact cease at the beginning of September 2009, which will deduct the Company to expand its cellular offerings in the before AT&T elegant areas, under new agreements with one or more carriers. However, AT&T has indicated to the Company that it would take to to prolong a long-term relation with the Company, under new agreements that would, at a minimum, retain the Company's exclusivity with AT&T in all of the markets that the Company currently serves under its various AT&T agreements. The Company and AT&T are currently in discussions on how to construction such brand-new agreements, and the Company may or may not shape that maintaining an sole relationship with AT&T is in its best interests.
Most importantly, with thoughtfulness to the Company's beginning parcelling unity with AT&T, Management believes that there will be no constituents affect on these revenues for the foreseeable future, i.e., above the collide with on revenues already being recognized through consumer attrition. Since the set of the iPhone in the summer of 2007, the Company has versed higher subscriber attrition rates due to customers lacking to secure the iPhone.
The Company has been prohibited from selling the iPhone or servicing any subscribers with an iPhone by AT&T, and has required any of the Company's customers desiring an iPhone to forward their Company-provided usefulness to AT&T's billing services platform. The Company believes these restrictions on the Company and prerequisite to fix the Company's customers modify their billing services to AT&T are in regulate abusing of its agreements with AT&T, including specifically the bilateral non-solicitation equipment contained in such agreements which provides for a $1,000 per Subscriber (cellular number) amercement for these actions. The Company is currently in discussions with AT&T on a steadfastness to this issue, including allot compensation for such AT&T generated guy attrition.
The surviving arrangement agreements with AT&T have varying concluding dates through October 31, 2012. For the year ended May 31, 2008, the Company announced the following results [the Tables below offering selected fiscal data, including established non-GAAP measures; catch a glimpse of filing for crown data]: Overall, the Company's pit strainer subscriber revenues decreased approximately 3% during the period, particularly as a sequel of increased attrition due to the iPhone. Of close note to wisdom our business, the Company bills its customers in superfluous of its reportable revenues, in the profile of "Gross cellular fee billings," prudent as the absolute recurring monthly cellular care charges invoiced to PCI's wireless subscribers. A stubborn interest of the dollars invoiced for cellular routine are retained by PCI as compensation for the services it provides to these subscribers.
PCI takes unshortened (100%) accounts receivable chance for all billings, before deducting the income sharing amounts that are mature under PCI's guide distributor agreements with AT&T. The "Net gate adjustment" is the mount up to pay to AT&T for their component of the subscriber billings, and can be added back to "Total operating revenues" to better sympathize the Company's unconditional annual billings. (dollars in thousands) Three Months Ended August 31, 2008 vs 2007 2008 % of 2007 % of $ Change % Change Oper Rev Oper Rev Service, rent, and continuation takings Cellular operations Gross cellular remittance billings $ 15,374 $ 15,804 $ (430 ) -3 % Net proceeds order (revenue allotment due AT&T) (8,866 ) (9,088 ) 222 -2 % Net interest reported from cellular promise billings 6,508 50 % 6,716 45 % (208 ) -3 % Other servicing profits - 0 % 126 1 % (126 ) -100 % Cellular operations aggregate assistance revenues: 6,508 50 % 6,842 46 % (334 ) -5 % Two-way trannie operations 411 3 % 446 3 % (35 ) -8 % Other operations 82 1 % 169 0 % (87 ) -51 % Service, rent, and living gain $ 7,001 54 % $ 7,457 49 % $ (456 ) -6 % Teletouch Communications, Inc. Financial Highlights (in thousands, excuse shares and per apportion amounts) Three Months Ended August 31, 2008 2007 Change Summary Operating Results: Service, slash and subsistence return $ 7,001 $ 7,457 $ (456 ) Product sales receipts 5,885 7,448 (1,563 ) Total revenues 12,886 14,905 (2,019 ) Net publication value of products sold (5,303 ) (6,514 ) 1,211 7,583 8,391 (808 ) Operating revenue (1) 270 3,181 (2,911 ) Net gain (loss) (446 ) 2,091 (2,537 ) Net return (loss) relevant to trite shareholders $ (446 ) $ 1,867 $ (2,313 ) Income (loss) per division suited to garden shareholders Basic $ (0.01 ) $ 0.04 $ (0.05 ) Diluted $ (0.01 ) $ 0.03 $ (0.04 ) Weighted undistinguished shares outstanding: Basic 49,051,980 48,571,545 480,435 Diluted 49,051,980 55,095,315 (6,043,335 ) Other Data: Operating takings 270 3,181 (2,911 ) Less: Gain on reprieve of buying and selling receivable compulsion to AT&T (1) - (3,824 ) 3,824 Adjusted operating receipts (2) 270 (643 ) 913 Net income (loss) (446 ) 2,091 (2,537 ) Add back: Depreciation 374 417 (43 ) Interest destruction 635 1,030 (395 ) Income tribute detriment 81 60 21 EBITDA 644 3,598 (2,954 ) Less: Gain on mercy of calling due bond to AT&T (1) - (3,824 ) 3,824 Add back: Stock based compensation ruin 42 30 12 Adjusted EBITDA (3) 686 (196 ) 882 Selected Balance Sheet Highlights (in thousands) August 31, May 31, 2008 2008 Change Cash $ 4,466 $ 4,729 $ (263 ) Current apportionment of long-term due (4) 10,145 9,727 418 Long-term debt, netting of trend quota 8,528 7,429 1,099 Current Assets 18,704 19,679 (975 ) Current Liabilities 27,963 28,692 (729 ) Working Capital (9,259 ) (9,013 ) (246 ) Add: Thermo Factoring Debt (4) 8,959 9,091 (132 ) Adjusted Working Capital (5) (300 ) 78 (378 ) (1) In June 2007, Teletouch recognized a one-time close in from the remission of inexorable customers unpaid obligations to AT&T after reaching a post over disputed roaming charges. (2) Adjusted operating income means operating income less the one while increment recorded in June 2009 consanguineous to a roaming assail take exception to with AT&T.
Adjusted operating income is a non-GAAP technical gage that the Company believes allows for a better contrasting of the operating results for its financial in the first place direction 2008 to its fiscal premier thirteen weeks 2009. (3) Teletouch's EBITDA means breakdown from continuing operations before depreciation and amortization, incite loss and income stretch expense. Adjusted EBITDA is EBITDA less the one moment increase the lead on the roaming expense deciding with AT&T (see (1) above) and less cost for stock-based compensation.
EBITDA and Adjusted EBITDA are both non-GAAP measures that the Company believes allows for a more do breakdown of our results. (4) Includes a factoring liability demand with Thermo Credit, LLC ("Thermo Factoring Debt") which matures in February 2010 but is classified as a in circulation debt for GAAP purposes. The Thermo Factoring Debt distinguished was as follows: August 31, May 31, 2008 2008 Change Thermo Factoring Debt $ 8,959 $ 9,091 $ (132 ) (5) Adjusted Working Capital is a non-GAAP appraise that the Company believes is a better implication of its stylish operating liquidity because the terms of the Thermo Factoring Debt and the role relationship with Thermo demand for a longer while financing arrangement. Disclosure of Non-GAAP Financial Measures We description our economic results in accordance with in the main accepted accounting principles ("GAAP").
However, governance believes the conferral of destined non-GAAP pecuniary measures provides profitable gen to directorship and investors anenst financial and affair trends relating to the Company's financial form and results of operations, and that when GAAP financial measures are viewed in conjunction with the non-GAAP financial measures, investors are provided with a more valid notion of the Company's progressing operating performance. In addition, these non-GAAP financial measures are middle the germinal indicators board uses as a underpinning for evaluating performance. For all non-GAAP financial measures in this release, we have provided corresponding GAAP financial measures for comparative purposes. We over to the sitting "EBITDA" in various places of our financial discussion.
EBITDA is defined by us as earn income before dispose expense, income impose expense, and depreciation and amortization expense. EBITDA is not a rule of operating execution under GAAP and should not be considered in isolation nor construed as an surrogate to operating profit, grating income (loss) or moolah flows from operating, investing or financing activities, each as decided in accordance with GAAP. You should also not take to be EBITDA as a pace of liquidity. Moreover, since EBITDA is not a theme stubborn in accordance with GAAP and thus is influenceable to varying interpretations and calculations, EBITDA, as presented, may not be comparable to similarly titled measures presented by other companies. Investors should be advised that the Company will not be fully contemporary with all of its financial reporting requirements until it has completed its Quarterly Reports on Form 10-Q for all periods following the procurement of PCI, up to and including the uneaten prevailing fiscal year 2009 trimonthly periods.
The Company expects to become au fait with such old periods at or near the close of its fiscal year 2009 Report on Form 10-K. About Teletouch Communications For over 40 years, Teletouch has offered a sweeping followers of telecommunications products and services including cellular under the AT&T Mobility(R) and T-Mobile(R) retail brands, two-way radio, GPS-telemetry, wireless messaging and conspicuous safety/emergency reply channel products and services throughout the U.S. Teletouch operates a restraint of retail stores under the "Teletouch" brand, including accommodation offerings for T-Mobile and its own two-way present network.
Teletouch's wholly-owned subsidiary, Progressive Concepts, Inc. ("PCI"), is a unsurpassed provider of AT&T services (voice, details and entertainment), as well as other mobile, manageable and live electronics products and services to individuals, businesses and administration agencies. PCI also operates a train of retail stores and sells under the "Hawk Electronics" brand; through Hawk-branded sub-agents; using its own rule sales press and through the Internet at various sites including: www.hawkelectronics.com and www.hawkexpress.com surrounded by others.
PCI also operates a popular wholesale codification business, known as PCI Wholesale, which serves smaller cellular and automotive retailers, auto dealers and exurban cellular carriers throughout the country; Dealers and Retailers, bring www.pciwholesale.com. Teletouch is also an neutrality holder in various cellular-related technology companies, including quick applications developer/provider, Mobui Corporation - www.mobui.com. Teletouch's routine store is traded Over-The-Counter under trade in symbol: TLLE.
Additional facts about the Teletouch folks of companies can be found at www.teletouch.com. All statements from Teletouch Communications, Inc. in this scoop publicity that are not based on recorded reality are "forward-looking statements" within the gist of the PSLRA 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.
While the Company's operation has based any forward-looking statements contained herein on its progress expectations, the bumf on which such expectations were based may change. These forward-looking statements rely on a troop of assumptions relating to prospective events and are subdue to a mob of risks, uncertainties, and other factors, many of which are shell of our control, that could cause physical results to in the long run be separate from such statements. Such risks, uncertainties, and other factors include, but are not surely minimal to, those set forth under the caption "Risk Factors" in the Company's most late Form 10-K and 10-Q filings, and amendments thereto, as well as other obvious filings with the SEC since such date.
The Company operates in a like changing and competitive environment, and supplementary risks may arise. Accordingly, investors should not part of the country any faith on forward-looking statements as a intimation of verifiable results. The Company disclaims any end to, and undertakes no promise to, update or rectify any forward-looking statement. SOURCE: Teletouch Communications, Inc.
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