FOR IMMEDIATE RELEASE
COVISTA COMMUNICATIONS, INC. ANNOUNCES OPERATING RESULTS
FOR QUARTER AND NINE MONTHS ENDED OCTOBER 31, 2004
CHATTANOOGA, TN - December 10, 2004 - Covista Communications, Inc. (NASDAQ
symbol: CVST) today announced operating results for the three and nine-month
periods ended October 31, 2004.
For period ended October 31, 2004, the Company significantly improved its cash
position and overall balance sheet when compared to prior periods. As of October
31, 2004, cash on hand was $8,505,000 with zero bank debt and positive working
capital of $4,228,000. At January 31, 2004, the Company had cash on hand of
$3,797,000, bank debt of $1,326,000 and a working capital deficit of $6,088,000.
This $10,316,000 improvement in working capital is the result of proceeds
received from the previously announced sale of selected customers and assets to
PAETEC.
The Company expects to receive total cash proceeds of $14,928,000 from PAETEC,
of which $12,667,000 has been received to date. The Company has deferred the
expected net gain of $1,631,000 until future contingencies are resolved.
Operating results for the period ended October 31, 2004 reflect a net charge of
$1,505,000 to write down tangible and intangible assets related to the customers
sold to PAETEC.
For the three months ended October 31, 2004, the Company reported a loss of
$2,233,000 or $0.13 a share on revenues of $12,552,000 as compared with a loss
of $173,000 or $0.01 per share on revenues of $20,337,000 from the prior year's
fiscal period. The Company reported a loss of $5,383,000 or $0.30 per share on
revenues of $49,101,000 for the nine months ended October 31, 2004, as compared
with a loss of $1,836,000 or $0.10 per share on revenues of $65,064,000 for the
comparable period in the prior fiscal year.
John Leach, Jr., Covista's President and Chief Executive Officer, stated, "The
significant improvement in our working capital position will allow us to
accelerate our sales and marketing efforts as we continue to develop our VOIP
deployment strategy."
We are providing the following consolidated summary of operations (unaudited)
for the three and nine-month periods ended October 31, 2004 and 2003 (000's
except for per share data):
Three-Months Ended October 31 Nine-Months Ended October 31
2004 2003 2004 2003
--------------------------------------------------------------------
Revenues $12,552 $20,337 $49,101 $65,064
Operating expenses (12,966) (20,442) (52,475) (66,665)
Sale of assets (1,505) -- (1,505) --
Operating loss (1,919) (105) (4,879) (1,601)
Other expense, net (314) (68) (504) (235)
Net loss (2,233) (173) (5,383) (1,836)
Comprehensive loss $(2,233) $(173) $(5,383) $(1,836)
------------------------------------------------------------------
Basic loss per common share $(0.13) $(0.01) $(0.30) $(0.10)
Diluted loss per common share $(0.13) $(0.01) $(0.30) $(0.10)
Average number of common shares
Basic 17,822 17,806 17,822 17,791
Diluted 17,822 17,806 17,822 17,791
</Table>
About Covista:
Covista is a facilities-based provider of telecommunications services with a
substantial customer base, principally residential and small sized businesses.
Its products and services include a broad range of voice, data and Internet
solutions, including long distance and toll-free services, local dial tone and
features, calling cards, frame relay, Internet access, VPN, directory assistance
and teleconferencing services. Covista currently owns and operates switches in
Chattanooga, Dallas and Minneapolis. Covista operates Network Operation, call
center and information technology facilities in Chattanooga to monitor its
switched network and to coordinate its various services. For information on
becoming a Covista customer, please telephone 800-805-1000 or visit the
Company's website at www.covista.com.
Information relating to forward-looking statements:
This press release contains historical and forward-looking statements made
pursuant to the safe harbor provisions of the private securities litigation act
of 1995. Investors are cautioned that forward-looking statements such as
statements of the company's plans, objectives, expectations and intentions
involve risks and uncertainties. The cautionary statements made in this release
should be read as being applicable to all related statements wherever they
appear. Statements containing terms such as "believes," "expects," "plans,"
"projects," "intends," "estimates," "anticipates," or similar terms, are
considered to contain uncertainty and are forward-looking statements. The actual
results could differ materially from those discussed. Factors that could
contribute to such differences include: changes in market conditions and
increased competition from other telecommunications and internet service
providers; government regulations; the volatile and competitive environment for
internet telephony; advances in competitive products or technologies that could
reduce demand for services; availability of transmission facilities; management
of rapid growth; customer concentration and attrition; the ability to
successfully integrate acquired companies; the ability to successfully develop
and bring new services to market; inaccurate or incomplete assumptions on the
part of management; and other risks discussed in the company's SEC filings,
including form 10-k and form 10-q, which can be accessed at the SEC web site at
www.sec.gov.
Readers of this release should understand that it is not possible to predict or
identify all such risk factors. Consequently, this list should not be considered
a complete statement of all potential risks or uncertainties. Covista does not
assume the obligation to update any forward-looking statement, except as is
required by applicable law.
Contact:
Frank Pazera
Executive Vice President and Chief Financial Officer
Covista Communications, Inc.
Tel: (423) 648-9500
Fax: (423) 648-9502
E-mail: fpazera@covista.com