Proshares Ultrashort Telecommunications (AMEX:TLL)
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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.
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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
=========== ========== ==========
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