Teletouch Subsidiary Progressive Concepts, Inc. (dba Hawk Electronics) Provides Limited Details on Settlement Framework with AT&T as Negotiations Near Conclusion
FORT WORTH, Texas--(BUSINESS WIRE)--Teletouch Communications, Inc. (OTCBB: TLLE), a leading U.S. wireless services, cellular, consumer electronics and public safety equipment provider today provided a status update with certain limited settlement details regarding the ongoing litigation between its wholly-owned subsidiary, Progressive Concepts, Inc. dba Hawk Electronics (“PCI”) and AT&T (NYSE: T). Teletouch reported today that the parties have made substantive progress towards completing the terms of their final settlement agreement, whereby the parties have agreed and documented many of the major outstanding items of the mediated settlement framework, as well as additional agreements made as a part of the final settlement terms and conditions.
Terms of the settlement contemplate the Company receiving certain cash and other consideration, as well as a restructured, six-year minimum sales and distribution relationship with AT&T, which will allow the Company to continue operating under an updated and expanded arrangement in all of its current and prior market areas, including DFW, San Antonio, Houston/South Texas, Austin/Central Texas, Tyler/East Texas and Arkansas. The parties' agreement in principle would allow the Company to offer an expanded portfolio of AT&T products and services, including all cellular handsets supported by AT&T to both new and existing customers.
Given the complexity and breadth of the various required distribution and related agreements, the parties were unable to finish documenting their agreements in the three–four week timeframe previously announced, but the parties hope and expect to complete these agreements in the near future.
HOWEVER, INVESTORS ARE CAUTIONED: If the parties are unable to agree upon the final terms of the contemplated agreements within the next few weeks, the current settlement discussions will cease and the arbitration process will resume. If the arbitration resumes, new hearing dates will be scheduled and announced, with an expected start date no later than 30-45 days following the date that settlement discussions are terminated, subject to the Arbitrator’s schedule.
“Up to this point, the parties continue to work well together to complete the final settlement and distribution agreements,” stated T. A. "Kip" Hyde, Jr., President, Chief Operating Officer and Director of Teletouch. “While the parties remain in basic agreement on the majority of the terms of the settlement, there are still a number of matters that remain unresolved or need additional clarity. But, we remain optimistic that a final agreement can and will be reached in the near future and we look forward to being once again a strong distribution channel partner of AT&T. If not, we remain confident in our legal position and are fully prepared to take this matter back into the arbitration process, with a new hearing start date to be set as soon as possible.”
As initially reported on September 30, 2009, Teletouch’s subsidiary, PCI dba Hawk Electronics, the largest remaining Master Distributor and Authorized Services Provider for AT&T cellular products and services in the U.S., initiated legal action against AT&T seeking damages incurred when AT&T prevented the Company from selling Apple, Inc.’s (NASDAQ: AAPL) popular iPhone and other "AT&T exclusive" products and services that PCI contends it is entitled by contract to provide to its customers.
For a more detailed description of the Company’s legal action Notice and detailed Initial Statement of Claim, please refer to the related Form 8-K, filed October 1, 2009 (also available at the Company’s website: www.teletouch.com and on EDGAR at www.sec.gov), as well as updates provided through press releases and the Company’s public filings over the period.
About Teletouch Communications
For over 46 years, Teletouch has offered a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is a leading direct Authorized Service Provider and billing agent of AT&T (NYSE: T) products and services to consumers, businesses and government agencies, as well as an operator of its own two-way radio network and LTR systems in Texas. Teletouch also maintains a distribution agreement with Clearwire (Nasdaq: CLWR), as a provider of advanced 4G and WiMax wireless network services. Teletouch operates a chain of 20 retail and authorized agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, call center operations, and various retail eCommerce websites including: www.hawkelectronics.com, www.hawkwireless.com and www.hawkexpress.com. Through its wholly owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through www.pciwholesale.com and www.pcidropship.com, among other B2B oriented websites.
Teletouch's common stock is traded Over-The-Counter under stock symbol: TLLE. Additional information about the Teletouch family of companies can be found at www.teletouch.com.
The registered trademarks of AT&T, Apple, Inc. and each, any and all product or service names discussed in relation to Teletouch Communications, Inc. and its affiliates are the property of their respective owners.
All statements from Teletouch Communications, Inc. in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the PSLRA of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While the Company's management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Risk Factors" in the Company’s most recent Form 10-K and 10-Q filings, and amendments thereto, as well as other public filings with the SEC since such date. The Company operates in a rapidly changing and competitive environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement.