CHATTANOOGA, Tenn.--(BUSINESS WIRE)--May 16, 2002--Covista Communications, Inc. (Nasdaq:CVST - News) today announced results for its fiscal year ended January 31, 2002.
Revenues for the fiscal year were $95,312,696 as compared with revenues of $133,230,437 for the prior fiscal year. Covista reported a net loss of $11,969,588 or $1.17 per share for the fiscal year ended January 31, 2002, as compared with a net loss of $8,629,304 or $1.18 per share for the prior fiscal year. For the quarter ended January 31, 2002, revenues were $16,509,657 as compared with revenues of $33,426,834 for the comparable quarter of the prior fiscal year. Covista reported a net loss of $5,603,531 or $0.52 per share for the quarter, compared with a net loss of $3,345,924 or $0.45 per share for the comparable quarter of the prior fiscal year. These results are in line with the Company's pre-release announcement on April 30, 2002.
John Leach, Jr., Covista's President and Chief Executive Officer, reviewed the past year and commented on the Company's current business initiatives and prospects: "We are relieved to be able to turn the page on such a difficult year for the entire telecommunications industry, including Covista. In the face of so many well-publicized bankruptcies and also the two-month loss of our New York City switching facility on September 11, we believe Covista has demonstrated remarkable resilience and vitality. Our focus now is on the future, and we have much to report that is positive."
Mr. Leach continued, "Covista has adopted and begun to implement a remodeled business plan consisting of three components: new business initiatives, a significant infusion of new equity capital to support both the current business and the Company's anticipated future growth, and a reduction in operating costs. On the new business side, the Company has moved to scale back its high-risk, low-margin wholesale business in favor of a more secure and stable retail business base. We are proud to report that the successful launch of Covista's KISSLD residential long distance service and the Company's agent-based, custom-branded long distance programs together have yielded over 70,000 new customers since January 1 of this year. With respect to costs, our efforts have included the previously-announced reduction in force that was completed in February 2002, after the close of the last fiscal year. We expect those reductions and other cost savings to be reflected on a prospective basis. The equity infusion, subject to shareholder approval, will be $12.5 million. We believe this should eliminate Covista's current working capital deficit."
In addition to the foregoing, Covista is proceeding toward full integration of Capsule Communications, Inc. which Covista acquired in February 2002. "The Capsule revenue stream already is having a positive impact upon current operations," Mr. Leach added, "and Covista is continuing to develop new ways to benefit from the e-business infrastructure enhancements gained in the Capsule acquisition." Mr. Leach concluded, "We have undertaken a substantial transformation of Covista over the past few months. As we look ahead in the current fiscal year, we are encouraged that our initiatives are beginning to bear fruit."
About Covista:
Covista is a facilities-based long distance telecommunications, Internet and data services provider with a substantial customer base in the commercial, wholesale and residential market segments. Its products and services include a broad range of voice, data and Internet solutions, including long distance and toll-free services, calling card, frame relay, Internet access, VPN, directory assistance and teleconferencing services. The wholesale division provides domestic and international termination services to carriers worldwide. Covista currently owns and operates switches in New York City, Newark, New Jersey and Philadelphia, and has announced plans to expand to additional switch salesgroups in Dallas, Minneapolis, Las Vegas and Chattanooga, Tennessee. Covista operates Network Operations, 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 888/426-8478 or visit the Company's
website at www.covista.com.
FISCAL YEAR ENDED JANUARY 31 We are providing the following consolidated summary of operations for the fiscal year ended January 31, 2002 and 2001 (Amounts and number of shares in thousands except per share data): 2002 2001 -------------- -------------- Revenue $ 95,313 $ 133,230 Cost and Expenses 107,475 141,964 Operating Loss (12,162) (8,734) Other Income (Expense) 192 104 Loss before income taxes (11,970) (8,629) Net loss (11,970) (8,629) Other comprehensive income 80 Comprehensive Loss $(11,970) $ (8,550) Basic loss per common share $ (1.17) $ (1.18) Diluted loss per common share $ (1.17) $ (1.18) Average Number of Shares Basic 10,204 7,324 Diluted 10,204 7,324 QUARTER ENDED JANUARY 31 2002 2001 ------------ ----------- Revenue $ 16,510 $ 33,427 Cost and Expenses 22,061 36,733 Operating Loss (5,551) (3,306) Other Income (Expense) (54) (40) Loss before income taxes (5,605) (3,346) Net loss (5,605) (3,346) Other comprehensive income (30) Comprehensive Loss $ (5,605) $ (3,376) Basic loss per common share $ (0.52) $ (0.45) Diluted loss per common share $ (0.52) $ (0.45) Average Number of Shares Basic 10,836 7,341 Diluted 10,836 7,341
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 salesgroup 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.
Covista Communications, Inc.
Thomas Gunning, 973/812-1100
tgunning@covistacom.com
Fax: 973/237-6414