TELETOUCH COMMUNICATIONS INC

CIK:0000928659|SEC Filings

DISCONTINUED TWO-WAY OPERATIONS (Tables)

9 Months Ended

Feb. 28, 2013

DISCONTINUED TWO-WAY OPERATIONS [Abstract]

Summary results for the two-way operations are reflected as discontinued operations in the Company's consolidated statement of operations for the three months and nine months ended February 28, 2013 and February 29, 2012 and are as follows:

(dollars in thousands)	Three months ended					Nine months ended
	February 28,		February 29,			February 28,		February 29,
	2013		2012			2013		2012
Operating revenues	$	-	$	2,454		$	1,398	$	7,093
Income on sale of assets related to discontinued two-way operations	$	197	$	-		$	39	$	-
Income (loss) from discontinued two-way operations		-		(115	)		28		(187	)
Income tax expense from discontinued two-way operations		-		6			15		19

Net income (loss) from discontinued two-way operations	$	197	$	(121	)	$	52	$	(206	)

A summary of the assets and liabilities sold in conjunction with the sale of the two-way business as determined at May 31, 2012 is as follows:

(dollars in thousands)
	May 31,
	2012
Assets
Current Assets:
Accounts receivable, net of allowance of $26	$	746
Inventory, net of reserve of $176		395
Prepaid expenses and other current assets		20
Total current assets		1,161
Long-term assets:
Property and equipment, net of accumulated depreciation and amortization of $1,459		386
Goodwill		343
Intangible assets, net of accumulated amortization of $217		7
Total long-term assets		736
Total Assets	$	1,897
Liabilities
Current Liabilities:
Accrued expenses and other current liabilities	$	48
Deferred revenue		69
Total Liabilities	$	117

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Feb. 28, 2013	Feb. 29, 2012
Operating Activities:
Net income (loss)	$ (622)	$ 4,009
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	685	899
Non-cash gain on forgiveness of trade payable obligation to AT&T		(5,000)
Non-cash compensation expense	173	296
Non-cash interest expense	62	25
Provision for losses on accounts receivable	186	310
Provision for inventory obsolescence	97	97
Gain on sale of assets related to discontinued two-way business	(39)
Gain on disposal of assets	(32)	(34)
Changes in assets and liabilities:
Accounts receivable	725	(266)
Inventories	447	(317)
Prepaid expenses and other assets	426	(94)
Accounts payable	(1,330)	1,595
Accrued expenses and other current liabilities	(459)	931
Texas sales and use tax obligation voluntary payments	(150)	1,850
Deferred revenue	(48)	(91)
Net cash provided by operating activities	121	4,210
Investing Activities:
Purchases of property and equipment	(74)	(144)
Purchase of intangible asset	(75)	(4)
Restricted cash - discontinued two-way operations	(13)
Redemption of certificates of deposit		25
Net proceeds from insurance claims		33
Proceeds from sale of assets	80
Proceeds from sale of two-way operations	1,466
Payments on Trademark License	(100)	(150)
Receipts from notes payable		1
Net cash provided by (used in) investing activities	1,284	(239)
Financing Activities:
Payments on current debt	(5,473)	(1,339)
Proceeds from issuance of long-term debt	4,300
Payments on Texas sales and use tax obligation	(497)
Proceeds from exercise on non-employee stock options		1
Deferred financing costs	(952)
Net cash used in financing activities	(2,622)	(1,338)
Net (decrease) increase in cash	(1,217)	2,633
Cash at beginning of period	1,973	2,239
Cash at end of period	756	4,872
Supplemental Cash Flow Data:
Cash payments for interest	1,135	1,442
Cash payments for income taxes	211	6
Non-Cash Transactions:
Capitalization of loan origination fees - deferred fees	60
Capitalization of loan origination fees - common stock issued to lender	203
Forgiveness of loan origination fees		$ 158

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Feb. 28, 2013	May 31, 2012
CURRENT ASSETS:
Cash	$ 756	$ 1,973
Restricted cash-sale of discontinued two-way operations	13
Certificates of deposit-restricted	25	25
Accounts receivable, net of allowance of $142 at February 28, 2013 and $150 at May 31, 2012	2,111	2,296
Unbilled accounts receivable	1,389	1,785
Inventories, net of reserve of $186 at February 28, 2013 and $155 at May 31, 2012	418	836
Prepaid expenses and other current assets	321	738
Current assets held for sale		1,161
Total Current Assets	5,033	8,814
ASSETS HELD FOR SALE		736
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $4,789 at February 28, 2013 and $5,038 at May 31, 2012	2,011	2,124
INTANGIBLE ASSETS, net of accumulated amortization of $11,165 at February 28, 2013 and $10,602 at May 31, 2012	3,341	2,615
TOTAL ASSETS	10,385	14,289
CURRENT LIABILITIES:
Accounts payable	3,071	4,402
Accrued expenses and other current liabilities	2,592	2,928
Accrued Texas sales and use tax obligation		1,880
Current portion of long-term debt	3,129	10,932
Current portion of Texas sales and use tax obligation	264
Current portion of trademark purchase obligation	100	100
Deferred revenue	72	117
Current liabilities held for sale		117
Total current liabilities	9,228	20,476
LONG-TERM LIABILITIES:
Long-term debt, net of current portion	6,690
Long-term Texas sales and use tax obligation, net of current portion	1,001
Long-term trademark purchase obligation, net of current portion		100
Total Long Term Liabilities	7,691	100
TOTAL LIABILITIES	16,919	20,576
COMMITMENTS AND CONTINGENCIES (NOTE 15)
SHAREHOLDERS' DEFICIT:
Common stock, $.001 par value, 70,000,000 shares authorized, 50,449,920 shares issued and 49,272,733 shares outstanding at February 28, 2013 and May 31, 2012	51	50
Additional paid-in capital	52,247	51,873
Treasury stock, 1,177,187 shares held at February 28, 2013 and May 31, 2012	(216)	(216)
Accumulated deficit	(58,616)	(57,994)
Total Shareholders' Deficit	(6,534)	(6,287)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$ 10,385	$ 14,289