Record $111 Million in Revenues and $9.3 Million in Operating Cash Flow Underscores Management's Follow Through and Successful Acquisition Strategy
November 30, 2007
Titan Global Holdings (OTCBB:TTGL), a diversified holding company, today announced operating results for fiscal year 2007. The results include record revenues of $111 million and net operating losses of $23.8 million or $.49 cents per share for its fiscal year 2007. Titan generated $9.3 million in operating cash flows during fiscal year 2007, representing a $9.6 million increase from excess cash used from operations of $382,000 in fiscal year 2006.
Net operating losses include the impact of non-cash charges of $13.4 million for derivative expenses and a change in revenue recognition methods for its communications division that resulted in a $12 million deferral of revenue for prepaid international long distance products that were sold to customers but not yet used on the Company's network.
"Fiscal year 2007 was a year of transformation and repositioning for Titan," said Bryan Chance, President and Chief Executive Officer of Titan Global Holdings. "During fiscal year 2007 we transformed Titan through the refinance of the Company's operations, the addition of key management talent, the repositioning of the communications division and the strategic additions of new divisions."
Titan recently completed a $15 million revolving credit facility and $7.6 million senior term loan with Greystone Business Credit II, LLC in December 2006. The refinancing resulted in a cash flow savings and reduced outstanding stock by 1.25 million shares and reduced the fully diluted outstanding shares by more than 3.5 million shares.
In July 2007, the Company formed Titan Global Energy Group to aggregate underutilized assets that can provide significant opportunities for revenue and earnings growth in the energy sector. In September 2007, the Company completed its acquisition of Appalachian Oil Company, a petroleum company in the Southeast that operates an extensive petroleum product distribution network that generated approximately $400 million in revenues for fiscal 2006. Appco distributes petroleum products to more than 165 dealers in the southeastern United States and owns and operates 56 convenience store locations.
The Company also formed Titan Global Brands in August 2007 to integrate, protect and expand brand management capabilities and to leverage and optimize growth from Titan's distribution channels. Through its diverse family of subsidiaries, Titan owns or manages more than 100 trusted brands that are distributed through efficient, overlapping and expansive distribution channels. Titan's distribution channels reach over 86,000 retail locations throughout the United States and over 175 international locations as well.
Titan Communications Division
Titan Communications Division reported net revenues of $87.7 million, a 2% decrease from fiscal year 2006 and net operating losses of $8.4 million. Net operating losses for the communications division include $4.7 million of non-cash derivative expenses incurred during fiscal year 2007. The Communications division reported EBITDA of $4 million for fiscal year 2007, a $4.5 million decrease from the prior year's EBITDA of $8.4 million.
As referenced previously, the Company's Communications division has transitioned the majority of its international long distance traffic to its StartTalk network in the fourth quarter of 2007; the Company changed revenue recognition methods in fiscal year 2007 which resulted in a deferral of $12 million in revenues to future periods.
"Our Communications division repositioned itself in fiscal year 2007," said Kurt Jensen, Executive Vice President for Titan's Acquisitions Group. "During 2007 we migrated from terminating all international long distance traffic through prepaid pin agreements with tier one carriers to carrying the majority of the traffic on our StartTalk network in our fourth quarter. Additionally, we continued to better position our wireless offerings through the Ready Mobile acquisition. This acquisition added significant retail distribution which will be strategic for future growth in the Communications Division in fiscal year 2008."
Titan Electronics and Homeland Security Division
Titan Electronics and Homeland Security Division reported fiscal 2007 net revenues of $23.6 million, a 15% increase from the prior year, and net operating losses of $10.5 million. Net operating losses for the division include $8.7 million of non-cash derivative expenses incurred during fiscal year 2007. The Electronics division reported EBITDA of $1 million for fiscal year 2007, a $2.2 million improvement from the prior year's EBITDA loss of $1.2 million.
"The Electronics and Homeland Security division continues to grow," said Curtis Okumura, President of Titan's Electronics and Homeland Security Division. "We added significant management expertise to our team in fiscal 2007 with the additions of industry veterans Mike Kadlec, Mike Berg and Ed Peterson. Specifically, through our sales team's efforts to create a 'rep-centric' business model, we increased sales, diversified our market coverage and reduced our selling, as well as our general and administrative costs in fiscal year 2007. We are positioned well for further growth in fiscal year 2008."
"Team Titan looks forward to fiscal year 2008," said Mr. Chance. "With the strategic assistance from our equity partners, we were able to capitalize on strategic acquisitions in the first quarter of 2008 that have changed Titan's long-term outlook. We look forward to creating shareholder value through organic and strategic developments in fiscal 2008."
About Titan Global Holdings
Titan Global Holdings is a diversified holding company with a dynamic portfolio of subsidiaries spanning international telecommunications, electronics and homeland security, consumer products and energy resources. Through our nine wholly-owned subsidiaries, we take advantage of valuable synergies between our subsidiaries to maximize revenue growth, internal development and strategic acquisitions. In fiscal 2006 Titan generated in excess of $109 million in revenues on a consolidated basis and projects fiscal 2008 revenues up to $747 million. Titan's operating divisions include the following:
Titan's Telecommunications Division addresses a range of high-growth markets in the telecommunications, wireless and mobile segments. Companies include Oblio Telecom, Inc., the second largest publicly-owned company focused on the international prepaid telecommunications segment, StartTalk, Inc., Pinless, Inc., Titan Wireless Communications, Inc. and Ready Mobile.
The Titan Global Energy Division aggregates traditional and next-generation energy and fuel assets that can provide significant opportunities for growth in one of the world's largest and most critical markets.
Titan Global Brands integrates, protects and expands brand management capabilities to leverage and optimize growth across Titan's worldwide distribution channels. We own or manage more than 100 brands that are distributed through efficient, overlapping and expansive distribution channels.
Titan Card Services capitalizes on the burgeoning multibillion dollar international prepaid money transfer sector. The Card Services division provides a seamless brand extension for Titan's growing family of prepaid products, currently sold through a nationwide network of more than 71,000 retailers.
Titan's Electronics and Homeland Security Division includes Titan PCB East, Inc. and Titan PCB West, Inc. These companies specialize in the manufacture of advanced circuit boards and other electronic products for classified military and defense department customers, and other high-tech clients.
For more information, please visit: www.titanglobalholdings.com.
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Forward-Looking Statements
Safe Harbor Statement Under the Private Securities Litigation Act of 1995 -- With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. The actual future results of TTGL could differ significantly from those statements. Factors that could cause actual results to differ materially include risks and uncertainties such as the inability to finance the company's operations or expansion, inability to hire and retain qualified personnel, changes in the general economic climate, including rising interest rate and unanticipated events such as terrorist activities. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. For further risk factors see the risk factors associated with our Company, review our SEC filings.
