<PAGE>

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                       ----------------------------------

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For the Quarterly Period Ended November 30, 2001

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from ____ to ___

                         Commission File Number 1-13436

                         TELETOUCH COMMUNICATIONS, INC.
                       (Name of registrant in its charter)

              DELAWARE                                  75-2556090
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
  Incorporation or Organization)

          110 N. College, Suite 200, Tyler, Texas 75702 (903) 595-8800
          (Address and telephone number of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                      Yes  X                          No

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.001 par value-4,807,020 shares outstanding as of January 8, 2002

<PAGE>

                         TELETOUCH COMMUNICATIONS, INC.

                                    FORM 10-Q

                         QUARTER ENDED NOVEMBER 30, 2001

<TABLE>
<CAPTION>

                                                                                 Page No.
<S>                                                                              <C>

Part I.       Financial Information

     Item 1.   Financial Statements - Teletouch Communications, Inc.
               (Unaudited)

               Condensed Consolidated Balance Sheets at
               November 30, 2001 and May 31, 2001                                   1

               Condensed Consolidated Statements of Operations -
               Three and Six Months Ended November 30, 2001 and
               November 30, 2000                                                    2

               Condensed Consolidated Statements of Cash Flows -
               Six Months Ended November 30, 2001 and November 30, 2000             3

               Notes to Condensed Consolidated Financial Statements                 4

     Item 2.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                            9

Part II.      Other Information

     Item 1.   Legal Proceedings                                                   15

Signatures                                                                         16

</TABLE>


<PAGE>







                          Part I. Financial Information

<PAGE>


                 TELETOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (In Thousands, except share data)

<TABLE>
<CAPTION>


ASSETS                                                                             November 30, 2001          May 31, 2001
                                                                                   -----------------------------------------
                                                                                       (Unaudited)
<S>                                                                                  <C>                    <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                     $     6,363                $     3,999

     Accounts receivable, net of allowance of $237 in 2002 and $238 in 2001              2,141                      2,351
     Inventory                                                                           4,175                      4,552
     Deferred income tax assets                                                             56                         56
     Certificates of deposit, restricted as to use                                         102                        101
     Prepaid expenses and other current assets                                             495                        532
                                                                                   -----------                -----------
                                                                                        13,332                     11,591

PROPERTY, PLANT AND EQUIPMENT, net of accumulated
      depreciation of $18,016 in 2002 and $16,591 in 2001                               17,155                     18,484

DEBT ISSUE COSTS, net of accumulated amortization of
     $2,936 in 2002 and $2,730 in 2001                                                   1,164                      1,370
                                                                                   -----------                -----------
                                                                                   $    31,651                $    31,445
                                                                                   ===========                ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable and accrued expenses                                         $     4,498                $     3,029
     Current portion of long-term debt                                                  16,657                     12,196
     Long-term debt reclassified as current                                             63,933                     66,935
     Current portion of unearned sale/leaseback profit                                     418                        418
     Deferred revenue                                                                    1,196                      1,312
                                                                                   -----------                -----------
                                                                                        86,702                     83,890

UNEARNED SALE/LEASEBACK PROFIT, net of current portion                                   2,117                      2,327

COMMITMENTS AND CONTINGENCIES                                                               --                         --
DEFERRED INCOME TAXES                                                                    1,042                      1,042
SHAREHOLDERS' EQUITY (DEFICIT):
     Series A cumulative convertible preferred stock, $.001 par value, 15,000
     shares authorized, issued, and outstanding in 2002 and 2001                            --                         --
     Series B convertible preferred stock, $.001 par value, 411,457 shares
     authorized, 86,025 shares issued and outstanding in 2002 and 2001                      --                         --
     Common stock, $.001 par value, 25,000,000 shares authorized, 4,926,210
     shares issued in 2002 and 2001, respectively                                            5                          5
     Treasury stock, 83,990 shares                                                         (77)                       (62)
     Additional paid-in capital                                                         26,371                     26,363
     Accumulated deficit                                                               (84,509)                   (82,120)
                                                                                    ----------                 ----------
                                                                                       (58,210)                   (55,814)
                                                                                    ----------                 ----------
                                                                                    $   31,651                 $   31,445
                                                                                    ==========                 ==========
 </TABLE>


     See Accompanying Notes to Condensed Consolidated Financial Statements


                                        1


<PAGE>

                 TELETOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In Thousands, except shares and per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                  Three Months Ended               Six Months Ended
                                                                     November 30,                    November 30,
                                                             -----------------------------   -----------------------------
                                                                 2001            2000            2001           2000
                                                             --------------  -------------   -------------  --------------
<S>                                                             <C>              <C>              <C>           <C>
Service, rent, and maintenance revenue                            $  8,709       $ 11,205        $ 18,119        $ 22,428
Product sales revenue                                                2,958          3,070           5,889           6,064
                                                            --------------   ------------   -------------  --------------
   Total revenues                                                   11,667         14,275          24,008          28,492
Net book value of products sold                                     (2,065)        (3,509)         (4,295)         (6,386)
                                                             -------------   ------------   -------------  --------------
                                                                     9,602         10,766          19,713          22,106
Costs and expenses:
      Operating                                                      3,437          3,804           7,215           7,908
      Selling                                                        2,034          2,263           4,061           4,654
      General and administrative                                     1,838          1,548           3,669           3,741
      Depreciation and amortization                                  1,596          2,526           3,199           4,992
                                                             -------------   ------------   -------------  --------------
Total costs and expenses                                             8,905         10,141          18,144          21,295
                                                             -------------   ------------   -------------  --------------

Operating income                                                       697            625           1,569             811

Gain/(loss) on disposal of assets                                        2             --             (11)              5

Interest expense, net                                               (1,906)        (2,229)         (3,947)         (4,451)
                                                             -------------   ------------   -------------  --------------

Net loss                                                            (1,207)        (1,604)         (2,389)         (3,635)

Preferred stock dividends                                           (1,212)        (1,056)         (2,383)         (2,077)
                                                             -------------   ------------   -------------  --------------
Loss applicable to common stock                                     (2,419)        (2,660)         (4,772)         (5,712)
                                                             =============   ============   =============  ==============

Loss per share                                                    $  (0.50)      $  (0.56)       $  (0.98)       $  (1.25)
                                                             =============   ============   =============  ==============

Weighted average shares outstanding                              4,858,710      4,744,392       4,866,096       4,552,492
                                                             =============   ============   =============  ==============

</TABLE>


      See Accompanying Notes to Condensed Consolidated Financial Statements

                                       2

<PAGE>

                 TELETOUCH COMMUNICATIONS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                          Six Months Ended
                                                                            November 30,
                                                               ---------------------------------------
                                                                     2001                 2000
                                                               ------------------   ------------------
<S>                                                                <C>                  <C>
Operating Activities:
      Net loss                                                        $   (2,389)          $   (3,633)
      Adjustments to reconcile net loss to net cash
      provided by operating activities:
      Depreciation and amortization                                        3,199                4,992
      Non-cash interest expense                                            1,925                1,736
      Non-cash compensation expense                                            8                   --
      Provision for losses on accounts receivable                            526                  911
      Gain on sale of assets                                                  11                   (5)
      Amortization of unearned sale/leaseback profit
                                                                            (210)                (210)
      Changes in operating assets and liabilities:

        Accounts receivable, net                                            (316)              (1,175)
        Inventories                                                          701                 (350)
        Prepaid expenses and other assets                                     38                  490
        Accounts payable and accrued expenses                              1,469                 (777)
        Deferred  revenue                                                   (116)                 (70)
                                                               -----------------    -----------------
Net cash provided by operating activities                                  4,846                1,907

Investing Activities:
      Capital expenditures, including pagers                              (2,226)              (3,698)
      Redemption of certificates of deposit                                   --                 (650)
      Acquisitions, net of cash acquired                                      (1)                 (99)
      Net proceeds from sale of assets                                        20                   48
                                                               -----------------    -----------------
Net cash used for investing activities                                    (2,207)              (3,099)

Financing Activities:
      Purchase of Treasure Stock                                             (15)                  (8)
      Payments on long-term debt                                            (260)              (2,072)
                                                               -----------------    -----------------
Net cash used for financing activities                                      (275)              (2,080)
                                                               -----------------    -----------------
Net increase  (decrease) in cash and cash equivalents                      2,364               (3,272)
Cash and cash equivalents at beginning of period                           3,999                6,828
                                                               -----------------    -----------------
Cash and cash equivalents at end of period                             $   6,363            $   3,556
                                                               =================    =================
Supplemental disclosure of non cash activities:

     Issuance of common stock related to acquisition                   $      --            $   1,500
</TABLE>

      See Accompanying Notes to Condensed Consolidated Financial Statements

                                       3

<PAGE>


                         TELETOUCH COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

     The unaudited condensed consolidated financial statements of Teletouch
Communications, Inc., and its subsidiaries ("Teletouch" or the "Company") for
the periods ended November 30, 2001 and November 30, 2000 have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis. Significant accounting policies followed by the Company were disclosed in
the notes to the financial statements included in the Company's Annual Report on
Form 10-K for the year ended May 31, 2001. The balance sheet at May 31, 2001 has
been derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of the
Company's management, the accompanying condensed consolidated financial
statements contain the material adjustments necessary to present fairly the
financial position of the Company and the results of its operations and cash
flows for the periods ended November 30, 2001 and November 30, 2000. All such
adjustments are of a normal recurring nature. Interim period results are not
necessarily indicative of the results to be achieved for the full year.

     Loss Per Share: Loss per share is computed using the weighted- average
number of common shares outstanding during the period.

     New Accounting Announcements: In October 2001, the Financial Accounting
Standards Board issued Statement on Financial Accounting Standards No. 144 -
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144).
SFAS No. 144 is effective for years beginning after December 15, 2001 and
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of. SFAS No. 144 provides a single
accounting model for disposition of long-lived assets. Although retaining many
of the fundamental recognition and measurement provisions of Statement 121, the
new rules significantly change the criteria that would have to be met to
classify an asset as held for sale. The new rules also will supersede the
provisions of the Accounting Principles Board Opinion 30 with regard to
reporting the effects of a disposal of a segment of a business and will require
expected future operating losses from discontinued operations to be displayed in
discontinued operations in the period(s) in which the losses are incurred. In
addition, more dispositions will qualify for discontinued operations treatment
in the income statement. SFAS No. 144 is effective for years beginning after
December 15, 2001. The Company is currently analyzing the effects of the
adoption of SFAS No. 144.


                                       4

<PAGE>

                         TELETOUCH COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE B - BASIS OF PRESENTATION

     The consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As discussed in Note D, the
Company's Credit Agreement requires, among other things, the maintenance of
certain financial and operating covenants and prohibits any payments on the
Junior Subordinated Notes and the payment of dividends. As of November 30, 2001,
the Company has been unable to amend or negotiate new terms under the Credit
Agreement, which would enable the Company to remain in compliance therewith and
thereunder as of November 30, 2001, and for subsequent periods. The Company's
inability to comply with the terms of the Credit Agreement resulted in the
occurrence of an Event of Default under the Credit Agreement which permits the
lender to terminate the commitment and to declare the borrowings totaling $57.1
million ($59 million including accrued and unpaid interest) to be due and
payable. Also, based on the terms of the Junior Subordinated Note agreement, if
the lender declared the Company not in compliance with the terms of the Credit
Agreement, then by definition it would not be in compliance with the terms of
the Junior Subordinated Note Agreement resulting in an additional $23.9 million
becoming due and payable. While the Company continues to have discussions with
the lenders, no assurances can be given that the Company will be able to
successfully negotiate satisfactory terms. The respective defaults under the
Credit Agreement and Junior Subordinated Notes, the continued decline in cash
flow from operations, and the on-going operating difficulties faced by companies
in the wireless telecommunications services industry indicate that the Company
may be unable to continue as a going concern.

NOTE C - LONG-LIVED ASSETS

     The carrying amount of the long-lived assets is reviewed if facts and
circumstances suggest that they may be impaired. If the review indicates that
long-lived assets will not be recoverable, as determined by the undiscounted
cash flow method, the asset will be reduced to its estimated recoverable value
through a charge to operations.

     During the fourth quarter 2001, because of the continued default under the
Credit Agreement (see Note D), the continued decline in cash flow and the
on-going financial and operating difficulties faced by companies in the wireless
telecommunications services industry, the Company determined that the remaining
net book value of its long-lived assets were substantially impaired and the
recovery of such amounts through future operations or disposition was unlikely.
Accordingly, management estimated the future undiscounted cash flows and
determined the goodwill and FCC licenses were significantly impaired and
therefore recorded a charge equal to remaining net book value of these assets of
$ 36.6 million. No events have occurred during the quarter ended November 30,
2001 that have caused the Company to change any of its estimates as to future
undiscounted cash flows, therefore, no additional impairment charges have been
recorded against any remaining long-lived assets which consists of property,
plant and equipment.


                                       5

<PAGE>

                         TELETOUCH COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE D - LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>

                                             November 30,         May 31,
                                                 2001              2001
                                                 ----              ----
<S>                                         <C>                 <C>
Notes payable                                 $  57,147         $  57,322
Junior subordinated notes                        23,433            21,713
Other                                                10                96
                                              ---------         ---------
                                                 80,590            79,131
Less current portion                             16,657            12,196
Less portion reclassified as current debt        63,933            66,935
                                              ---------         ---------
                                              $      --         $      --
                                              =========         =========
</TABLE>

     Notes Payable: The Company's credit agreement with a group of lenders, led
by Chase Manhattan Bank (the "Credit Agreement") provides for loans in an amount
not to exceed $70 million. As of November 30, 2001, $57.1 million of the Credit
Agreement was funded. Direct costs incurred in connection with obtaining the
Credit Agreement of approximately $4.1 million have been deferred and are being
amortized, using the effective interest rate method, over the term of the
existing loans.

     The Credit Agreement bears interest, at the Company's designation, at a
floating rate of the prime rate plus 1% to 2% or LIBOR plus 2% to 3%. These
rates vary depending on the leverage ratio of the Company. The Credit Agreement
is secured by substantially all of the assets of Teletouch and its subsidiaries.
Borrowings under the Credit Agreement require the principal be repaid in
escalating quarterly installments through November 2005.

     The Credit Agreement also requires the maintenance of specified financial
and operating covenants, and prohibits any payments on the Junior Subordinated
Notes and the payment of dividends. These covenants were amended as of the end
of each of the first three quarters of the fiscal year ended May 31, 2001, which
allowed the Company to meet its financial covenant and principal repayment terms
at the end of each of the first three quarters of the prior fiscal year. As of
May 31, 2001 and through November 30, 2001, the Company has been unable to
negotiate new terms under the Credit Agreement, which would allow the Company to
remain in compliance with its terms as of November 30, 2001, and for subsequent
periods. Failure to comply with the terms of the agreement results in an Event
of Default under the Credit Agreement which in turn allows the lender to
terminate the commitment and to declare the borrowings totaling $57.1 ($59
million including accrued and unpaid interest) million to be due and payable.
The Company is in default of its payment obligations under the Credit Agreement
as well as with various financial covenants. The Lenders have refused to waive
the Events of Default, and are in the process of assessing their alternatives.
In any event, no additional borrowings will be available to the Company under
the Credit Agreement. Teletouch has classified amounts due under the Credit
Agreement as a current liability as of November 30, 2001.


                                       6

<PAGE>

                         TELETOUCH COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     Junior Subordinated Notes: In August 1995, in connection with the
acquisition of Dial-A-Page, Inc., Teletouch borrowed $10 million from
Continental Illinois Venture Corporation ("CIVC") and certain other parties both
related and unrelated to CIVC (together with CIVC, the "CIVC Investors") in
exchange for which Teletouch issued 14% Junior Subordinated Notes to the CIVC
Investors. The Subordinated Notes are due in August 2003. The Subordinated Notes
were initially recorded, for financial reporting purposes, at approximately $8
million. Included in the Subordinated Note balance was accrued interest of $13.9
million and $12.3 million at November 30, 2001 and May 31, 2001, respectively.

     The terms of the Subordinated Notes require the maintenance of certain
financial and operating covenants and restrict future acquisitions. Pursuant to
the Junior Subordinated Note Agreement, if the lender declared the Company not
in compliance with the terms of the Credit Agreement, then the Company would not
be in compliance with the terms of the Junior Subordinated Note Agreement. The
resulting inability to comply with the terms of the Junior Subordinated Note
Agreement would cause an additional $23.9 million, as of November 30, 2001, to
become due and payable; therefore, Teletouch has classified the amount
outstanding under the Subordinated Notes as a current liability as of November
30, 2001.

     The Company is pursuing a recapitalization of its debt and certain equity
securities. Although the Company's management believes it will successfully
recapitalize the Company in a timely fashion, there can be no assurance that
payment under the Credit Agreement and Junior Subordinated Notes will not be
declared due and payable. In the event of such an occurrence, the Company may be
unable to meet the repayment obligations, causing the Company to seek protection
from creditors.

NOTE E - STOCK OPTIONS

     In December 1999, the Company reduced the exercise price of all outstanding
employee and director owned stock options to $0.87, which was equal to the
average of the closing price of the Company's common stock for the 20-trading
days prior to December 1, 1999. In November 2001, the Company reduced the
exercise price of all outstanding employee and director owned stock options to
$0.24. For the quarter ended November 30, 2001, based on the fair market value
of Teletouch's common stock and in accordance with the recently issued Financial
Accounting Standards Board Interpretation No. 44, "Accounting for Certain
Transactions Involving Stock Compensation" compensation expense of approximately
$8,000 was recorded. Additional compensation expenses may be recorded in future
periods based on fluctuations in the market value of the Company's common stock.


                                       7

<PAGE>

                         TELETOUCH COMMUNICATIONS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE F - COMPREHENSIVE INCOME

     Total comprehensive income for the three and six months ended November 30,
2000 was a loss of $1,842,000 and $3,768,000, respectively. The difference
between comprehensive income and net loss for periods ended November 30, 2000
was related to unrealized gains on marketable equity securities that were
classified as available for sale. Due to the decline in the market value of
these equity securities as of May 31, 2001, which was considered other than
temporary, the Company wrote off the equity securities during the fourth quarter
of fiscal 2001.


                                       8

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations

     Certain statements contained herein are not based on historical facts, but
are forward-looking statements that are based upon numerous assumptions about
future conditions that could prove not to be accurate. Actual events,
transactions and results may materially differ from the anticipated events,
transactions or results described in such statements. The Company's ability to
consummate such transactions and achieve such events or results is subject to
certain risks and uncertainties. Such risks and uncertainties include, but are
not limited to, the existence of demand for and acceptance of the Company's
products and services, regulatory approvals and developments, economic
conditions, the impact of competition and pricing, results of financing efforts
and other factors affecting the Company's business that are beyond the Company's
control. The Company undertakes no obligation and does not intend to update,
revise, or otherwise publicly release the results of any revisions to these
forward-looking statements that may be made to reflect future events or
circumstances.

OVERVIEW

     The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with the
condensed consolidated financial statements and notes thereto included elsewhere
in this report.

     Teletouch is a leading provider of wireless telecommunications services,
primarily paging services, in non-major metropolitan areas and communities in
the southeast United States. As of November 30, 2001 the Company had
approximately 301,200 pagers in service. The Company derives the majority of its
revenues from fixed periodic fees, not dependent on usage, charged to
subscribers for paging services. As long as a subscriber remains on service,
operating results benefit from the recurring payments of the fixed periodic fees
without incurring additional selling expenses or other fixed costs. A high level
of customer attrition is common in the paging industry and Teletouch must be
able to replace terminating paging subscribers and attract additional wireless
subscribers to maintain operating margins. During recent months, customer
attrition ("churn") has remained relatively flat but continues to result in a
net decline in the number of pagers in service. Teletouch expects that net
paging subscriber deletions will continue in future quarters as the demand for
one-way paging continues to decline. Teletouch is implementing customer
retention programs and expanding its existing product lines to minimize the
impact of the level of customer attrition. The sales and marketing expenses and
other costs associated with attracting new subscribers are substantial and there
is no guarantee that our future efforts in this area will improve subscriber
growth and retention.

     In December 1998, Teletouch launched its own brand of prepaid cellular
telephone service, utilizing the resale of telecommunication service which it
buys at wholesale prices. The company also offers PCS cellular service as an
agent for other PCS carriers, including AT&T Wireless Services Inc. and Cingular
Wireless in all of its markets. In May 2001, the Company decided to discontinue
sales of its own brand of prepaid cellular service and transition all customers
to alternative cellular service under one of the Company's existing agent
agreements by January 2002. At November 30, 2001, the Company was offering some
type of cellular service in all of its sales offices. In April 2000, Teletouch
became an agent for Leap Wireless International Inc. ("Cricket Communications"),
a company that provides unlimited local wireless service for a flat monthly fee.
Cricket currently offers its service in several major metropolitan areas in
Tennessee, Arkansas and Oklahoma and plans to offer the service in other markets
in which Teletouch has retail locations.


                                       9

<PAGE>

RESULTS OF OPERATIONS

         The following table presents certain items from the Company's condensed
consolidated statements of operations and certain other information for the
periods indicated.

<TABLE>
<CAPTION>

                                                         Three Months Ended              Six Months Ended
                                                             November 30,                   November 30,
                                                         -------------------           --------------------
                                                         2001           2000           2001            2000
                                                         ----           ----           ----            ----

                                                     (in thousands, except pagers, ARPU and per share amounts)
<S>                                                        <C>            <C>            <C>             <C>
  Service, rent and maintenance revenue                    $ 8,709        $11,205        $18,119         $22,428

  Product sales revenue                                      2,958          3,070          5,889           6,064
                                                          --------        -------        -------         -------

       Total revenues                                       11,667         14,275         24,008          28,492

  Net book value of products sold                           (2,065)        (3,509)        (4,295)         (6,386)
                                                          --------        -------        -------         -------

                                                          $  9,602        $10,766        $19,713         $22,106

  Operating expenses                                      $  8,905        $10,141        $18,144         $21,295

  Operating income                                        $    697        $   625        $ 1,569         $   811

  Net loss before preferred stock dividends               $(1,207)        $(1,604)       $(2,389)        $(3,635)

  Net loss after preferred stock dividends                $(2,419)        $(2,660)       $(4,772)        $(5,712)

  Loss per share after preferred stock dividends          $ (0.50)        $ (0.56)       $ (0.98)        $ (1.25)

  EBITDA (1)                                              $  2,304        $ 2,800        $ 4,776         $ 5,803

  Pagers in service at end of period                       301,197        395,643        301,197         395,643

  Average revenue per unit ("ARPU")                       $   8.81        $  8.89        $  8.72         $  8.84
</TABLE>

---------------------------
(1)   EBITDA represents earnings before interest, taxes, depreciation and
      amortization (and certain non-recurring income and expenses). EBITDA is a
      standard measure of financial performance in the paging industry. However,
      EBITDA is not a measure defined in generally accepted accounting
      principles ("GAAP") and should not be construed as an alternative to
      operating income or cash flows from operating activities as determined in
      accordance with GAAP. EBITDA is, however, one of the primary financial
      measures by which the Company's covenants are calculated under its debt
      agreements. The EBITDA shown above does not include gain/(loss) on the
      sale of assets or compensation expense associated with repriced stock
      options.

                                       10

<PAGE>

Results of Operations for the six and three months ended November 30, 2001 and
2000

     Total revenue: Teletouch's total revenue decreased to $24.0 and $11.7
million for the six months and three months ended November 30, 2001 from $28.5
and $14.3 million for the six months and three months ended November 30, 2000,
respectively. This decline is due to losses in paging and messaging revenues
resulting from fewer pagers in service and lower demand for one-way paging which
are offset slightly by increases in cellular and two-way radio revenues. Pagers
in service decreased to approximately 301,200 at November 30, 2001 as compared
to 395,600 at November 30, 2000, due to a continuing decline in the demand for
one-way paging service.

     The negative impact on total revenue of the decrease in pagers in service
is compounded by a decrease in average revenue per unit ("ARPU"). ARPU for the
six months ended November 30, 2001 was $8.72 as compared to $8.84 for the six
months ended November 30, 2000. The decrease in ARPU is primarily due to
increased competitive intensity in the Company's markets from other paging
carriers as well as cellular and PCS providers. Declining pricing from the
cellular and PCS providers is continuing to translate into a decline in demand
for paging services. As competitors continue to pursue its customers in the
marketplace and as the paging industry fully matures, ARPU is expected to
continue to decline. Teletouch expects that the introduction of new products and
services will partially offset the decline in ARPU or paging subscribers and
will lessen the decrease in total revenue.

     Operating expenses, excluding depreciation and amortization: Operating
expenses, excluding depreciation and amortization, were $14.9 million, or 62% of
total revenue, for the first six months of fiscal 2002 as compared to $16.3
million, or 57% of total revenue, for the first six months of fiscal 2001; and
$7.3 million, or 63% of total revenue, for the quarter ended November 30, 2001
as compared to $7.9 million, or 55% of total revenue for the quarter ended
November 30, 2000 ($7.6 million, or 53% of total revenue, including the $350,000
compensation expense reduction associated with repriced stock options, for the
quarter ended November 30, 2000). Costs have declined in fiscal 2002 primarily
in the areas of advertising, bad debts, and telephone service expenses due to
direct efforts by the Company to control these costs. As a percentage of gross
revenues, costs have increased from fiscal year 2001 due to the relatively fixed
cost nature of paging infrastructure that has been required to be maintained to
service the Company's existing paging subscribers.

     Depreciation and amortization: Depreciation and amortization expense
decreased to $3.2 and $1.6 million for the six months and three months ended
November 30, 2001, and from $5.0 and $2.5 million for the six months and three
months ended November 30, 2000, respectively. The decrease is due primarily to
the write off of substantially all of the Company's intangible assets during the
fourth quarter of fiscal year 2001 due to impairment of such assets when
compared to estimated future cash flows (see Note C). This decline was partially
offset by an increase in depreciation related to assets used in new retail
stores.

     Interest expense: Net interest expense decreased to $3.9 and $1.9 million
for the six months and three months ended November 30, 2001, and from $4.5 and
$2.2 million for the six months and three months ended November 30, 2000,
respectively. Lower interest rates on the Company's variable-rate debt
obligations along with principal payments of $2.5 million made against the
Company's credit obligations during the last three quarters of fiscal 2001
resulted in the decline in interest expense.

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     Income tax benefit: For fiscal year 2002, the Company estimates the
effective tax benefit rate will be 0%. A valuation allowance has been recorded
against deferred tax assets which are not likely to be realized. Specifically,
Teletouch's income tax carryforwards expire at specific future dates and
utilization of certain carryforwards is limited to specific amounts each year.
However, due to the uncertain nature of their ultimate realization, the Company
has established a valuation allowance against these carryforward benefits and
will recognize benefits only as reassessment demonstrates they are realizable.
Realization is entirely dependent upon future earnings in specific tax
jurisdictions. While the need for this valuation allowance is subject to
periodic review, if the allowance is reduced, the tax benefits of the
carryforwards will be recorded in future operations as a reduction of the
Company's income tax expense.

     EBITDA: EBITDA decreased to $4.7 million, or 20% of total revenue, for the
six months ended November 30, 2001 from $5.8 million, or 20% of total revenue,
for the six months ended November 30, 2000. EBITDA decreased to $2.2 million
(excluding the $8,000 compensation expense associated with the repriced
options), or 20% of total revenue, for the three months ended November 30, 2001
from $2.8 million (excluding the $350,000 compensation expense reduction
associated with the repriced options), or 20% of total revenue, for the three
months ended November 30, 2000. The decrease in EBITDA in total is due to the
continuing decline in ARPU and number of pagers in service partially offset by
increases in cellular phone margins.

FINANCIAL CONDITION

     Teletouch's cash balance was $6.4 million at November 30, 2001 as compared
to $4.0 million at May 31, 2001. Cash provided by operating activities increased
to $4.8 million for the six months ended November 30, 2001 from $1.9 million for
the six months ended November 30, 2000. The Company expects that cash flow
provided from operations will be sufficient to fund its working capital needs in
the near term, provided that the Company is successful in reorganizing its debt
obligations, which is discussed in greater detail below. In the absence of such
a reorganization and additional financing, the Company may be forced to
terminate its operations.

     The Company's credit agreement with a group of lenders, led by Chase
Manhattan Bank (the "Credit Agreement") provides for loans in an amount not to
exceed $70 million. As of November 30, 2001, $57.1 million of the Credit
Agreement was funded. Direct costs incurred in connection with obtaining the
Credit Agreement of approximately $4.1 million have been deferred and are being
amortized using the effective interest rate method over the term of the existing
loans.

     The Credit Agreement bears interest, at the Company's designation, at a
floating rate of the prime rate plus 1% to 2% or LIBOR plus 2% to 3%. These
rates vary depending on the leverage ratio of the Company. The Credit Agreement
is secured by substantially all of the assets of Teletouch and its subsidiaries.
Borrowings under the Credit Agreement require the principal be repaid in
escalating quarterly installments through November 2005.

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<PAGE>

     The Credit Agreement also requires the maintenance of specified financial
and operating covenants and prohibits any payments on the Junior Subordinated
Notes and the payment of dividends. These covenants were amended as of the end
of each of the first three quarters of the fiscal year ended May 31, 2001, which
allowed the Company to meet its financial covenant and principal repayment terms
at the end of each of the first three quarters of the prior fiscal year. As of
May 31, 2001 and through November 30, 2001, the Company has been unable to
negotiate new terms under the Credit Agreement, which would allow the Company to
remain in compliance with its terms as of November 30, 2001, and for subsequent
periods. Failure to comply with the terms of the agreement results in an Event
of Default under the Credit Agreement which in turn allows the lender to
terminate the commitment and to declare the borrowings totaling $57.1 million
($59 million including accrued and unpaid interest) to be due and payable. The
Company is in default of its payment obligations under the Credit Agreement as
well as with various financial covenants and has ceased making the required
monthly interest payments on the Credit Agreement after May 2001. The Company
has accrued $1.9 million for the unpaid interest on the Credit Agreement. The
Lenders have refused to waive these Events of Default, and are in the process of
assessing their alternatives. In any event, no additional borrowings will be
available to the Company under the Credit Agreement. Teletouch has classified
amounts due under the Credit Agreement as a current liability as of November 30,
2001.

     In August 1995, in connection with the acquisition of Dial-A-Page, Inc.,
Teletouch borrowed $10 million from Continental Illinois Venture Corporation
("CIVC") and certain other parties both related and unrelated to CIVC (together
with CIVC, the "CIVC Investors") in exchange for which Teletouch issued 14%
Junior Subordinated Notes to the CIVC Investors. The Subordinated Notes are due
in August 2003. The Subordinated Notes were initially recorded, for financial
reporting purposes, at approximately $8 million. Included in the Subordinated
Note balance was accrued interest of $13.9 million and $12.3 million at November
30, 2001 and May 31, 2001 respectively.

     The terms of the Subordinated Notes require the maintenance of certain
financial and operating covenants and restrict future acquisitions. Pursuant to
the Junior Subordinated Note Agreement, if the lender declared the Company not
in compliance with the terms of the Credit Agreement, then the Company would not
be in compliance with the terms of the Junior Subordinated Note Agreement. The
resulting inability to comply with the terms of the Junior Subordinated Note
Agreement would cause an additional $23.9 million, as of November 30, 2001, to
become due and payable; therefore, Teletouch has classified the amount
outstanding under the Subordinated Notes as a current liability as of November
30, 2001.

     The Company is pursuing a recapitalization of its debt and certain equity
securities. Although the Company's management believes it will successfully
recapitalize the Company in a timely fashion, there can be no assurance that
payment under the Credit Agreement and Junior Subordinated Notes will not be
declared due and payable. In the event of such an occurrence, the Company may be
unable to meet the repayment obligations, causing the Company to seek protection
from creditors.

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     Teletouch's operations require capital investment to purchase inventory for
lease to customers and to acquire paging infrastructure equipment to support the
Company's growth. Net capital expenditures, including pagers, amounted to $2.2
million and $3.7 million for the first six months of fiscal years 2002 and 2001,
respectively. Teletouch anticipates capital expenditures will decrease in fiscal
2002 as compared to fiscal 2001 as the Company slows its retail expansion and
continues to purchase lower cost pager inventory for lease to its customers.
Teletouch expects to pay for these expenditures with cash generated from
operations.

NEW ACCOUNTING ANNOUNCEMENTS

     In October 2001, the Financial Accounting Standards Board issued Statement
on Financial Accounting Standards No. 144 - Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of, and provides a single accounting model for long-lived
assets to be disposed of. Although retaining many of the fundamental recognition
and measurement provisions of Statement 121, the new rules significantly change
the criteria that would have to be met to classify an asset as held for sale.
The new rules also will supersede the provisions of the Accounting Principles
Board Opinion 30 with regard to reporting the effects of a disposal of a segment
of a business and will require expected future operating losses from
discontinued operations to be displayed in discontinued operations in the
period(s) in which the losses are incurred. In addition, more dispositions will
qualify for discontinued operations treatment in the income statement. SFAS No.
144 is effective for years beginning after December 15, 2001. The Company is
currently analyzing the effects of the adoption of SFAS No. 144.

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<PAGE>

                           Part II. Other Information

Item 1.  Legal Proceedings

     Teletouch is party to various legal proceedings arising in the ordinary
course of business. The Company believes there is no proceeding, either
threatened or pending, against it that could result in a material adverse effect
on its results of operations or financial condition.

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                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           TELETOUCH COMMUNICATIONS, INC.


                                           ------------------------------------
                                                   (Registrant)




Date:  January 11, 2002             /s/ Robert M. McMurrey
                                    ---------------------------
                                    Robert M. McMurrey
                                    Chairman

Date:  January 11, 2001             /s/ J. Kernan Crotty
                                    ---------------------------
                                    J. Kernan Crotty
                                    President
                                    Chief Financial Officer
                                    (Principal Accounting Officer)



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