Tuesday, October 16, 2012

Teletouch Communications, Inc. (TLLE) Announces First Quarter FY 2013 Results and Highlights

Yesterday after the closing bell, Teletouch Communications reported its financial results and highlights for the first quarter ended August 31, 2012.

1st Quarter Results – Financial (as reported)

• Total operating revenues of $5.22 million
• Income from continuing operations of $0.38 million
• EBITDA from continuing operations of $0.60 million
• Net loss of $0.11 million
• Reduced total liabilities by $2.36 million

1st Quarter Results – Financial (adjusted for non-cash and significant non-recurring items)

• Adjusted income from continuing operations of $0.56 million
• Adjusted EBITDA from continuing operations of $0.78 million
• Adjusted net income of $0.07 million

1st Quarter Highlights – Business

• In June 2012, signed National Distribution Agreement with TCT Mobile Multinational, Limited to sell Alcatel OneTouch® branded cellular handsets. Initial inventory expected to be available by late September to early October 2012.
• In July 2012, hired 30+ year industry veteran and former head of CellStar USA, Timmy Monico, as new distribution division VP and leader of worldwide wholesale sales.
• Sold legacy Two-Way Radio/Public Safety Equipment business to DFW Communications, Inc. for approximately $1.5 million in August 2012.
• Negotiated term sheet with prospective new lender for senior revolving and term credit facilities to replace current credit facility with Thermo Credit LLC. The due diligence process started in late August 2012, with closing targeted for end of October 2012.

“As we prepare for our initial handset deliveries and the related sales growth in our wholesale distribution division, we are making solid progress in the basic blocking and tackling of running the overall business,” commented T. A. “Kip” Hyde, Jr., President, Chief Operating Officer and Director of Teletouch. “With the sale of the two-way radio and public safety equipment division, we continue to pay down debt and reduce our total liabilities. Through segment cost reductions and AT&T subscriber transfer fees, our operating income from continuing operations increased over half-a-million dollars from the same period last year to approximately $375,000 for this year’s quarter. Similarly, our net loss from continuing operations was reduced by over $600,000 from the prior fiscal year’s first quarter results. After guidance from the State, we filed a petition for redetermination and hearing, in order to facilitate and complete the process of creating a formal compromise and payment arrangement for the sales tax assessment with the State of Texas. When adjusted for non-cash stock compensation expense and other items, we generated net income of $73,000 for the quarter.”

Hyde added, “We are now substantially through due diligence with a new lender to replace Thermo Credit, with closing currently targeted for October 2012 month-end. Once closed, this new senior facility is designed to facilitate growth in our wholesale distribution segment, as well as support our ongoing cellular services segment. When combined with our latest distribution agreement with Unimax Communications for the import and sales of UMX® branded low cost CDMA handsets, we feel we are well positioned for strong performance through the back half of this fiscal year.”

A conference call has been scheduled to review the fiscal first quarter 2013 earnings on October 24, 2012, at 4:15 p.m. Eastern (3:15 p.m. Central). Investors interested in joining the call should dial 866-901-2585 or 404-835-7099. Callers will be asked to provide their first and last names, email address, and company and/or financial institution name, as applicable. Participants are advised to dial in approximately 10-15 minutes before the conference call is scheduled to begin. Management will be taking questions after their prepared remarks. The moderator will explain to participants how to queue up their questions.

To learn more about Teletouch, visit www.teletouch.com

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