posted May 17, 2002
Covista Communications, Inc. (Nasdaq:CVST) today announced results for its fiscal year ended January 31, 2002, including an $11.9 million net loss. But officials said they are optimistic about the future.
The firm is headed by Henry Luken of Soddy-Daisy and has headquarters in Chattanooga.
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 sites in Dallas, Minneapolis, Las Vegas and Chattanooga. 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.
FISCAL YEAR ENDED JANUARY 31
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
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