posted December 11, 2004
Covista Communications, Inc. (NASDAQ symbol: CVST) today announced operating results for the three and nine-month periods ended Oct. 31, including a loss of $2,233,000 for the past three months.
The Covista loss for nine months was $5,383,000.
For the period ended Oct. 31, the Company "significantly improved its cash position and overall balance sheet when compared to prior periods," officials said.
As of Oct. 31, cash on hand was $8,505,000 with zero bank debt and positive working capital of $4,228,000. At Jan. 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 Oct. 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 Oct. 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 Oct. 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 Oct. 31, 2004 and 2003 (000's except for per share data):
Three-Months Ended Nine-Months Ended
October 31 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
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.
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