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