Teletouch Communications, Texas-based cellular services provider and growing consumer electronics distributor, recently held a shareholder conference call highlighting previously released financial results for the 4th fiscal quarter and fiscal year ending June 7, 2012, along with a number of operational issues. The call included Robert McMurrey (Chairman and CEO of Teletouch), Thomas "Kip" Hyde, Jr. (President & COO, and CEO of primary operating company PCI Hawk Electronics), Douglas Sloan (NASDAQ:CFO), and Mike Dickens (Sr. VP of Operations).
The core of the presentation dealt with the company's move back to profitability and growth, coming out of a particularly challenging year involving unpredictable events.
In spite of these unavoidable pressures, Teletech ended up generating reported net income of $6.3 million and $.08 fully diluted earnings per share for the year, the strongest earnings the company has seen in a decade. Fourth quarter net income was $161,000. The company also settled a two year long litigation with AT&T, and expects to close on new financing, all of which allows Teletouch to focus on their core strategy of growing their distribution operations. The company's goal remains the transitioning of Teletouch into a market leader in the distribution business.
Shortly after the end of the fiscal year, Teletouch announced the signing of their first direct handset manufacturing distribution agreement with TCT Mobile, one of the largest consumer manufacturing companies in the world and the maker of the Alcatel OneTouch brand of cellular handsets, as well as a dozen other cellular equipment and accessory distribution agreements to support their wholesale business growth strategy.
During the call's question and answer period, the anticipated effect of the TCT agreement on Teletouch revenues was discussed. The company believes that the new relationship should clearly generate several million dollars top line and then the related margins bottom line. It was pointed out that the initial order was just signed, and it takes about 45 days for product to be on the ground. Kip Hyde said of the agreement: "It's our first handset deal. We're pretty excited about it. We do have another handset deal that we will be announcing shortly…, and the combination of these will represent a real foundation to growth over the next 12 months."
Another question arose regarding the recent Samsung-Apple software litigation, and whether there was any software on the incoming Alcatel handsets that might be negatively impacted by the jury decision in the case. The response was that Teletouch has not been given any indication by the manufacturer that they're in violation of any of the patents that were in dispute in the Samsung-Apple litigation. To the extent that there is, the assumption is that they would modify their operating system accordingly, but that there is no indication that any ordered product would be impacted.
The complete earnings call is available at the Teletouch website at www.teletouch.com/EarningsCalls.asp
For more information on Teletouch Communications, Inc., visit teletouch.com
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