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Teletouch Reports Second Quarter 2013 Fiscal Year Results

Teletouch Communications, Inc. (OTCBB: TLLE), a leading U.S. cellular services provider and consumer electronics distributor, reported audited consolidated results on Form 10-Q and announced financial results for its second fiscal quarter ended November 30, 2012.

2 nd Quarter Results – Financial

  • Total operating revenues of $5.00 million
  • Income from continuing operations of $0.06 million
  • EBITDA from continuing operations of $0.28 million
  • Net loss from continuing operations of $0.38 million

Year-to-Date Highlights – Financial (as reported)

  • Total operating revenues of $10.22 million
  • Income from continuing operations of $0.43 million
  • EBITDA from continuing operations of $0.88 million
  • Net loss from continuing operations of $0.49 million
  • Reduced total liabilities by $2.47 million

Material Subsequent Event - Settlement of Texas Sales Tax Obligation

  • On January 7, 2013, the Company entered into a settlement agreement with the State of Texas (“State”) related to the prior reported sales tax obligation of its wholly owned subsidiary, Progressive Concepts, Inc. (”PCI”), assessed following an audit of tax periods from January 2006 through October 2009;
  • The settlement reduced PCI’s total sales tax obligation from approximately $1.91 million to $1.41 million as of the settlement date, i.e., approximately $0.50 million in penalties and interest will be waived by the State once the tax obligation is paid pursuant to the terms of the settlement, as further described below;
  • Terms of settlement:
    • Settlement obligation to State - $1,413,888 (actual tax assessed from audit);
    • $625,000 down payment ($150,000 was prior paid voluntarily through December 1, 2012, with the remaining $475,000 paid January 10, 2013);
    • Beginning February 15, 2013, PCI shall make 35 payments of $22,000 each month, with a final payment of $18,888 due January 15, 2016 (total of $788,888);
    • Total settlement obligation amount due is interest free;
    • All penalties and interest will be waived by the State after the settlement obligation is paid in full;
  • As the settlement and related current obligation was agreed to (and financed at zero interest) by the State prior to the Company’s 2 nd quarter financials being released, $1.1 million of the total obligation has been reclassified as a long term obligation on the Consolidated Balance Sheet as of November 30, 2012.

“This year’s quarter is not easily compared to last year’s same period, as we settled the AT&T litigation in late November 2011,” stated T. A. "Kip" Hyde, Jr., President, Chief Operating Officer and Director of Teletouch. “For a more comparable view, adjusted EBITDA for the second quarter was $0.29 million versus an adjusted EBITDA of $0.36 million for the same period last year. Adjusted Operating Income increased to $0.07 million from an adjusted Operating Income of $0.03 million last year. Our adjusted net loss from continuing operations decreased to $0.37 million from $0.59 million in the prior year’s quarter. While all-in-all, we maintained a reasonably comparable quarter, we are still not where we need to be to drive solid top and bottom-line growth.”

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