Exhibit 99.1
[GRAPHIC OMITTED]
American Telecom Services Announces
Financial Results for Fourth Quarter and Fiscal 2006
Contact: Company Investors: Media:
Bruce Hahn, CEO Brett Maas or Matt Hayden Daniell Ross
(404) 261-7466 Hayden Communications Comunicano, Inc.
Bruce.Hahn@atsphone.com (646) 536-7331 (858) 314-2958
Brett@haydenir.com dross@comunicano.com
City of Industry, California, September 26, 2006 - American Telecom Services
Inc. (AMEX: TES), a provider of converged communications solutions today
announced financial results for its fourth fiscal quarter and audited financial
results for the fiscal year ended June 30, 2006.
For the fourth fiscal quarter ended June 30, 2006, we recognized total revenues
of $2.7 million primarily from the sale of the Company's phone products. Cost of
sales for the quarter was $1.5 million, resulting in gross profit of $1.2
million or 44.4 percent of sales. Total operating expenses were $2.5 million,
inclusive of non cash charges of $255,000 relating to share-based compensation
granted to employees and non-employees for services.
For the full fiscal year ended June 2006, total revenue recognized was $3.1
million, compared to no revenue in fiscal 2005. Cost of sales was $1.8 million,
resulting in a gross profit of $1.3 million, or 41.9 percent of sales for the
fiscal year ended June 30, 2006 compared to no cost of sales and no gross profit
in the fiscal year ended June 30, 2005. Total operating expenses were $4.7
million, inclusive of $380,000 of non cash charges relating to share-based
compensation granted to employees and non-employees for services, compared to
$169,248 of operating expenses for the fiscal year ended June 30, 2005. The
Company incurred $2.6 million in selling, marketing and development expenses
during the fiscal year ended June 30, 2006 compared to $84,813 in selling,
marketing and development expenses last year. General and administrative
expenses for the fiscal year ended June 30, 2006 were $2.2 million, compared to
$84,435 in general and administrative expenses for the prior year. Net loss for
the year ended June 30, 2006 was $5.7 million, or $1.54 per fully diluted share
(based on approximately 3.7 million shares weighted average common shares
outstanding), compared to a net loss of $170,248, or $0.09 per fully diluted
share (based on approximately 2.0 million shares weighted average common shares
outstanding) for the fiscal year ended June 30, 2005. Included in our net loss
for the fiscal year ended June 30, 2006 was approximately $2.9 million in
non-cash charges, including $2.4 million in amortization of debt discount and
debt issuance costs directly related to debt financings which occurred prior to
our initial public offering.
"Fiscal 2006 was a pivotal year for American Telecom Services, as we completed
our IPO, introduced our initial product lines, achieved distribution in 9,500
retail locations nationwide, secured commitments for several diverse marketing
initiatives facilitated through our retail channels and laid the groundwork for
significant growth during fiscal 2007," commented Bruce Hahn,
chief executive officer of American Telecom Services, Inc. "While we incurred a
full-year of expenses during fiscal 2006, as we prepared for our launch for
future product sales, we only recognized substantial revenues in the fourth
quarter."
The Company concluded the fiscal year end June 30, 2006 with $12.4 million in
cash and cash equivalents compared to $50,780 in cash and cash equivalents of as
of June 30, 2005. The Company ended the 2006 fiscal year with $1.1 million in
accounts receivable, $0.8 million in prepaid expenses of which $0.5 million is
related to advances to suppliers to purchase inventory and $2.2 million
inventory consisting of finished goods. Working capital was $15.1 million as of
June 30, 2006.
American Telecom Services offers Internet Phones bundled with Internet Telephone
Service utilizing its patent pending Digital Clear technology and leverages the
backbone of the large VoIP provider named Sun Rocket. This provides its
customers with an integrated platform including clear voice and simple plug and
play connectivity that can be expanded to accommodate multiple handsets
throughout the home. In addition, American Telecom Services' patent pending Pay
N' Talk is a proprietary prepaid residential long distance service provided
through IDT, a NYSE-listed global leader in prepaid.
Teleconference Information
The Company will host a conference call at 4:45 PM ET today to discuss these
results. Interested participants should dial 800-632-2975 when calling within
the country-regionplaceUnited States or 973-935-8755 when calling
internationally. There will be a playback available until October 3. To listen
to the playback, please call 877-519-4471 when calling within the
country-regionplaceUnited States or 973-341-3080 when calling internationally.
Please use pass code 7906050 for the replay. This call is being webcast by
ViaVid Broadcasting and can be accessed at American Telecom's web site at
http://www.atsphone.com. The webcast may also be accessed at ViaVid's website
at: http://viavid.net/dce.aspx?sid=000035ED. The webcast can be accessed until
October 26, 2006 on either site.
About American Telecom Services
American Telecom Services, a leading provider of converged communications
solutions, currently offers Digital Clear Internet phone bundles powered by
SunRocket (voice-over-Internet-Protocol or "VoIP") and Pay N' Talk prepaid
residential long distance services powered by IDT. These services are bundled
with ATS' diverse line of custom designed, cordless multi-handset phones. ATS
sells its phone/service bundles through major retailers under the "American
Telecom," "ATS" "Pay N' Talk" and "Digital Clear" brand names.
Safe Harbor Statement
Any statements in this press release that are not historical facts are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. In some cases, you can identify those
forward-looking statements by words such as "may," "will," "should," "expects,"
"plans," "anticipates," "believes," "estimates," "predicts," "potential," or
"continue" or the negative of those words and some other comparable words. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from historical results or those the
Company anticipates. Factors that could cause
actual results to differ from those contained in the forward-looking statement
include, but are not limited to, those risks and uncertainties described in the
Company's prospectus dated February 1, 2006 and the other reports and documents
the Company files from time to time with the Securities and Exchange Commission.
Statements included in this press release are based upon information known to
the Company as of the date of this press release, and the Company assumes no
obligation to (and expressly disclaims any such obligation to) publicly update
or alter its forward-looking statements made in this press release, whether as a
result of new information, future events or otherwise, except as otherwise
required by applicable federal securities laws.
Statements of Operations Data:
For the fiscal years ended June 30,
--------------------------------------------------------
2006 2005 2004
---------------- ---------------- -----------------
Revenues $ 3,100,177 $ - $ -
Cost of sales 1,801,565 - -
---------------- ---------------- -----------------
Gross profit 1,298,612 - -
Expenses:
Selling, marketing and development 2,556,011 84,813 22,058
General and administrative 2,154,128 84,435 3,000
---------------- ---------------- -----------------
Total expenses 4,710,139 169,248 25,058
Other expenses (income):
Interest income (223,033) - -
Interest expense and bank charges 125,186 75 -
Amortization of debt discounts and debt
issuance costs 2,424,366 925 -
---------------- ---------------- -----------------
Net loss $ (5,738,046) $ (170,248) $ (25,058)
================ ================ =================
Earnings per Share Data:
Net loss per common share:
Basic and diluted $ (1.54) $ (0.09) $ (0.01)
================ ================ =================
Weighted average shares outstanding:
Basic and diluted 3,737,806 1,996,261 1,740,490
================ ================ =================
Other Financial Data:
Net cash (used in) provided by operating activities $ (5,847,855) $ 780 $ -
Net cash used in investing activities (194,544) - -
Net cash provided by financing activities 18,364,384 50,000 -
Balance Sheet Data:
As of
---------------------------------
June 30, 2006 June 30, 2005
--------------- -------------
Working capital (deficit) $ 15,062,582 $ (173,395)
Cash and cash equivalents $ 12,372,765 $ 50,780
Current assets $ 16,423,275 $ 50,780
Total assets $ 16,673,546 $ 174,298
Current liabilities $ 1,360,693 $ 224,175
Total liabilities $ 1,360,693 $ 225,175
Shareholders' equity (deficit) $ 15,312,853 $ (50,877)