TMCnet News
GlobeTel Communications Reports First Quarter 2006 ResultsFORT LAUDERDALE, Fla. --(Business Wire)-- May 12, 2006 -- GlobeTel Communications Corp. (AMEX:GTE) reported its results for the quarter ended March 31, 2006. During the quarter, the Company achieved revenue of $22,294,725, or 24% more than revenue of $18,010,643 reported for the first quarter 2005 and a 5.5% sequential rise over fourth quarter 2005 revenue of $21,133,147. The Company reported a net loss of $3,510,358 for the quarter ended March 31, 2006, compared to a net loss of $3,600,053 reported during the first quarter of 2005. The first quarter 2006 net loss, compared sequentially, is about 80% less than the prior quarter's, fourth quarter 2005, net loss of $16,430,767. Of the $3,510,358 reported as net loss, $582,224 is attributable to non-cash items, resulting in a net loss before non-cash items of $2,928,134. Timothy Huff, GlobeTel Chief Executive Officer, said, "Our net loss for the first quarter of 2006 was relatively flat, but smaller, compared to last year's first quarter, and a vast improvement over our previous quarter. This is our smallest quarterly loss of the last four quarters. This was achieved while the company was investing to expand all five of its business units. This reduction in loss is indicative of an overall movement toward profitability." Mr. Huff continued, "While we were successful in the first quarter in considerably reducing consulting and professional fees, as well as investment banking and financing fees, we did incur a small increase in the cost of research and development costs for our Sanswire project, mainly for development of the Stratellite and costs related to the successful floating of Sanswire II Technology Demonstrator Airship along with the initial testing phases. We've continued to make significant progress in the execution of our strategic business plan. Most importantly, our five business divisions have shown that they are working toward the aggressive goals that were set by our Board of Directors and myself on April 10. -- During March, April and continuing into May, our subsidiary Centerline Communications Corp, LLC (CLC) has experienced gross margins of between 6% and 9%. As CLC grows its direct routes through its switch facility in Los Angles and moves away from less profitable off-net revenues, we expect CLC's profitability to increase to a bottom line profit of $350,000 per month by the end of June. -- Our GlobeTel Wireless pilot installations continue worldwide, with significant progress being made in Germany and China. We successfully concluded a pilot test in Mexico, which we expect to precipitate a build out of the wireless systems throughout Mexico. Our goal is to have one metropolitan wireless network installed and operating by September 30. -- Sanswire Networks, our High Altitude Airship program, is set to deliver Sanswire II, a technology demonstrator, which will test the subsystems of the airship program at low and high altitudes. The tethered testing is scheduled to start at the end of May and continue for 60 to 90 days ending with an untethered flight or free flight test at a significant record-breaking attitude. The achievements of Sanswire Networks have generated tremendous interest from both the private and government sectors. This heightened interest will be shared with you in the coming weeks. -- Our GlobeTel VoIP division is launching their product in Latin America this month and is expected to be at a profitable run rate by June 30. Once launched, our VoIP product is expected to spread throughout Latin America and the corresponding ethnic markets in the US. -- Magic Money, Stored Value Card division will be launching its product in India on July 1 and is expected, based upon the initial projected volume and activity, to be profitable by the end of the third quarter. We are continuing to implement our existing projects, as well as adding new ones, into the pipeline across all five of our businesses. Over the next 60 to 90 days, we will let our performance show how "real" we are. Our employees continue to grow in number, and remain committed to producing value for our clients, shareholders and society. We are continuing our journey to completion." About GlobeTel Communications Corp. GlobeTel Communications Corp. develops and provides an integrated suite of telecommunications products and services, leveraging its advances in Stored Value, VOIP and Wireless Access technologies. Individually, each of GlobeTel's five business units function as distinct, strong stand-alone entities: Together they form a powerful alliance of human talent and technological innovation resulting in the SuperHub(TM) worldwide VOIP network, Sanswire Stratellite(TM) platform and products enabling simpler, cheaper transmission of voice, data and money. GlobeTel has historically focused its business development on markets outside of the United States. Current and pending operations exist in Asia, Europe, South America, Mexico and the Caribbean. For more information, please visit: http://www.globetel.net. Certain statements in this release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Placement Act of 1995. The words "forecast," "project," "intend," "expect," "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (finance or operating) or achievements to differ from future results, performance (financing and operating) or achievements expressed or implied by such forward-looking statements. The above are more fully discussed in the Company's SEC filings.
GLOBETEL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS (Unaudited)
For the three months ended
March 31,
2006 2005
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