Teletouch Communications, Inc. (AMEX:TLL) announced today that it
has reported its audited financial information relating to results
for the fiscal year ended May 31, 2005. The Company also reported
that it filed an amended 2004 Annual Report on Form 10-K/A for the
fiscal year ended May 31, 2004, that also included amended and
restated Consolidated Statements of Operations for the fiscal years
ended May 31, 2002 and 2003, and Consolidated Balance Sheet as of
May 31, 2002. Total revenues for fiscal 2005 declined approximately
7.8% to $24.7 million compared with $26.8 million in fiscal 2004.
Cash and Cash Equivalents significantly improved to approximately
$1.3 million at year-end, from $0.07 million in the comparable 2004
period. In addition to increasing cash, the Company reduced its
total debt in fiscal 2005 to $0.0 (zero) short-term debt at the end
of fiscal 2005, compared with $0.1 million at the end of fiscal
2004, and long-term debt, including the current portion, to $0.2
million in fiscal 2005, from $0.5 million in fiscal 2004 (a
decrease of nearly 65%). Total Paging revenues for the year
declined approximately 17% to $18.6 million for fiscal 2005
compared to $22.5 million for fiscal 2004. Two-way radio service
and product sales increased 58% to over $5.5 million in 2005, from
approximately $3.5 million through 2004. Total Other service and
product sales declined approximately 25% to $0.56 million in fiscal
2005, compared to $0.75 million through the same period in 2004.
Teletouch recorded an operating loss of $3.7 million for fiscal
2005 compared with $166,000 in fiscal 2004. The decline in
operating income was primarily due to the steady decline in service
revenues from fewer pagers in service against the service provision
costs and the continued write-down of related inventories and other
assets. Pagers in service declined to 155,600 at 2005 year-end
compared with 194,000 at fiscal year-end 2004. The Company recorded
a net loss applicable to common stockholders of $3.5 million, or
$0.75 per share in fiscal 2005 compared with a net loss applicable
to common stockholders of $519,000, or $0.11 per share in fiscal
2004. Discussing the year-end financial results, Teletouch CEO, T.
A. "Kip" Hyde, Jr. stated, "We have had a number of legacy business
successes during the 2005 fiscal year, most notably increasing cash
and substantial increasing our two-way radio business product sales
and services. This was due in large part to the acquisition of
Delta Communications last year and the continued availability of
Department of Homeland Security funding for the various state and
local governmental entities we serve. Plus, we have had some
notable successes in commercial two-way radio sales arena, ending
with a record year for Teletouch Two-Way." Hyde continued,
"However, we remain disappointed in our ability to grow the
Telemetry and GPS Location Based Services business. Although many
of our large customer prospects appear promising, closing cycles
continue to be unacceptably long. Also, while our outstanding
relationship with Guidepoint for faster-closing small-fleet sales
is just now beginning to bear fruit, frankly, it is not likely to
have a meaningful impact on overall profitability for the
foreseeable future, and our ability to grow internally is severely
diminished." "As a result, the Company is today principally focused
on completing a fundamental corporate reorganization designed to
reduce operating overhead and rebuild the Company through more
cost-effective internal growth and acquisitions. The first step
towards this goal includes completing the previously announced sale
of the paging business, and evaluating a potential sale of the
two-way radio business. While these actions are and will be subject
to shareholder approval, we are hopeful of a positive outcome, as
the successful conclusion of these events will then allow Teletouch
to better concentrate on new, higher growth opportunities." Hyde
concluded, "Having recently filed our Annual Reports on Forms 10-K
for fiscal 2005 and 10-K/A for fiscal 2004, we plan to file our
Form 10-Q for the quarter ended August 31, 2005, in the near
future. In accordance with our previously submitted and approved
plan to regain compliance with the AMEX listing requirements (no
later than November 28, 2005), these actions will likely result in
the Company's regaining reporting compliance with both the American
Stock Exchange ("AMEX") continued listing and SEC public reporting
requirements. We will then be in a position to file our preliminary
proxy with the SEC related to a special shareholders meeting to
address and allow shareholders to vote on the sale of the paging
business assets and other matters, all of which we expect to
complete before year end." About Teletouch Teletouch offers
telemetry and GPS-location based mobile asset monitoring, cellular,
two-way radio communications and wireless messaging services
throughout the United States. Teletouch's common stock is traded on
the American Stock Exchange under stock symbol: TLL. Additional
business and financial information on Teletouch is available 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 shares and per share amounts) Three Months Ended
May 31, May 31, 2005 2004 ---------- ---------- Operating revenues:
Service, rent, and maintenance revenue $4,691 $5,376 Product sales
revenue 1,292 1,322 ---------- ---------- Total operating revenues
5,983 6,698 ---------- ---------- Operating expenses: Cost of
service, rent and maintenance (exclusive of depreciation and
amortization included below) 2,643 2,741 Cost of products sold
1,153 1,300 Selling and general and administrative 2,296 1,764
Depreciation and amortization 700 868 Impairment of goodwill 551 --
Loss on disposal of assets 1,050 6 ---------- ---------- Total
operating expenses 8,393 6,679 ---------- ---------- Operating
income (loss) (2,410) 19 Interest expense, net (100) (81)
---------- ---------- Loss before income tax expense (benefit) and
extraordinary item (2,510) (62) Income tax expense (benefit) (181)
137 ---------- ---------- Loss before extraordinary item (2,329)
(199) Extraordinary item-Gain derived from negative goodwill on
sale of certain PNI assets, net of income tax -- 64 ----------
---------- Net loss (2,329) (135) Net loss applicable to common
shareholders $(2,329) $(135) ========== ========== Earnings (loss)
per share -- basic: Earnings (loss) applicable to common
shareholders before extraordinary item $(0.48) $(0.03)
Extraordinary item $-- $-- ---------- ---------- Earnings (loss)
applicable to common shareholders $(0.48) $(0.03) ==========
========== Earnings (loss) per share -- diluted: Earnings (loss)
applicable to common shareholders before extraordinary item $(0.48)
$(0.03) Extraordinary item $-- $-- ---------- ---------- Earnings
(loss) applicable to common shareholders $(0.48) $(0.03) ==========
========== Weighted average shares outstanding-basic 4,849,499
4,546,980 ========== ========== Weighted average shares
outstanding-diluted 4,849,499 4,546,980 ========== ==========
TELETOUCH COMMUNICATIONS, INC. Selected Balance Sheet Highlights
(In thousands) May 31, 2005 May 31, 2004 ------------ ------------
Cash and cash equivalents $1,283 $72 Current portion of long-term
debt 74 45 Long-term debt, net of current portion 102 448 TELETOUCH
COMMUNICATIONS, INC. Consolidated Statements of Operations (In
thousands, except shares and per share amounts) Years Ended May 31,
May 31, May 31, May 31, 2005 2004 2003 2002 ---------- ----------
----------- ----------- (Restated) (Restated) Operating revenues:
Service, rent and maintenance revenue $19,922 $23,192 $27,929
$34,335 Product sales 4,747 3,562 6,893 12,234 ----------
---------- ----------- ----------- Total operating revenues 24,669
26,754 34,822 46,569 ---------- ---------- ----------- -----------
Operating expenses: Cost of service, rent and maintenance
(exclusive of depreciation and amortization included below) 10,852
11,025 14,460 15,086 Cost of products sold 4,273 3,184 5,315 8,539
Selling and general and administrative 8,449 8,613 11,007 15,177
Depreciation and amortization 3,218 3,726 4,665 6,338 Impairment of
goodwill 551 -- -- -- Loss on disposal of assets 1,019 372 253 109
Write-off of equipment -- -- 810 -- ---------- ----------
----------- ----------- Total operating expenses 28,362 26,920
36,510 45,249 ---------- ---------- ----------- -----------
Operating income (loss) (3,693) (166) (1,688) 1,320 Gain on
extinguishment of debt -- -- 510 64,505 Gain on litigation
setttlement -- -- 429 -- Interest expense, net (432) (357) (384)
(7,412) ---------- ---------- ----------- ----------- Income (loss)
before income taxes (benefit) and extraordinary item (4,125) (523)
(1,133) 58,413 Income tax expense (benefit) (673) 60 (372) --
---------- ---------- ----------- ----------- Income (loss) before
extraordinary item (3,452) (583) (761) 58,413 Extraordinary item --
Gain derived from negative goodwill on purchase of certain assets,
net of income tax -- 64 -- -- ---------- ---------- -----------
----------- Net income (loss) (3,452) (519) (761) 58,413 Gain on
preferred stock transaction -- -- 28,778 -- Participation rights of
Series C Preferred Stock in undistributed earnings -- -- (23,580)
-- Preferred stock dividends -- -- -- (4,789) Net income (loss)
applicable to common stockholders $(3,452) $(519) $4,437 $53,624
========== ========== =========== =========== Earnings (loss) per
common share -- basic: Earnings (loss) applicable to common
shareholders before extraordinary item $(0.75) $(0.12) $.96 $11.09
Extraordinary item -- 0.01 -- -- ---------- ---------- -----------
----------- Earnings (loss) applicable to common shareholders
$(0.75) $(0.11) $.96 $11.09 ========== ========== ===========
=========== Earnings (loss) per common share -- diluted: Earnings
(loss) applicable to common shareholders before extraordinary item
$(0.75) $(0.12) $.30 $.59 Extraordinary item -- 0.01 -- --
---------- ---------- ----------- ----------- Earnings (loss)
applicable to common shareholders $(0.75) $(0.11) $.30 $.59
========== ========== =========== =========== Weighted average
number of common shares outstanding: Basic 4,623,164 4,546,980
4,644,978 4,834,255 ========== ========== =========== ===========
Diluted 4,623,164 4,546,980 92,053,503 98,893,353 ==========
========== =========== =========== *T
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