XFONE POSTS RECORD REVENUE FOR THIRD QUARTER 2006
Revenues Climb 60% and Operating Income Increases 225%
For Three Months Ended September 30, 2006
November 21, 2006
JACKSON, MS – November 15, 2006 – XFONE, Inc. (AMEX and TASE: XFN) (“XFONE” or “the
Company”), a provider of international voice, video and
data communications services, announced yesterday
financial results for the third quarter and nine months
ended September 30, 2006.
Financial
highlights for the three months ended September 30, 2006
compared to the three months ended September 30, 2005
(translated into US dollars for convenience)
-
Total revenues rose to a record of £5,127,985
($9,654,252), up 60.5% from £3,419,183 ($6,012,634)
and grew 15% from £4,525,256 ($8,367,198) in the
prior sequential quarter. Approximately 40% of the
sequential increase in revenues was from organic
growth.
-
Gross profit margin on sales increased to 42% from
32%.
-
XFONE USA revenues climbed 151% to £2,019,057
($3,801,198) from £862,631 ($1,516,937).
-
XFONE’S operations in the UK contributed £2,372,903
($4,467,369) to total revenues, a more than 20%
increase from revenues of £2,105,968 ($3,703,346).
-
Revenues from XFONE 018, the Company’s Israel-based
operations, totaled £736,025 ($1,385,685),
representing a 75% increase over £450,584
($792,351).
-
Operating profit grew 224.8% to £222,671 ($419,000)
from £73,479 ($129,000) and increased 90.4% compared
to the second quarter.
-
EBITDA for the quarter increased 108% to $593,000
from $285,000 and grew 50% from $395,000 in the
previous sequential quarter.
-
XFONE 018 reported its first positive EBITDA of
$17,000.
-
Net income grew to £112,031 ($210,917), or £0.01
($0.02) earnings per basic share, compared to a loss
of £118,803 ($208,915), or a loss of £0.02 ($0.03)
per basic share.
Note: Results for the three months and nine months
ended September 30, 2005 reflect a one-time loss of
£181,055 ($318,000) associated with damages to the
Company’s equipment and operations as a result of
the effects of Hurricane Katrina.
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Financial highlights for the nine months ended September
30, 2006 compared to the nine months ended September 30, 2005
(translated into US dollars for convenience):
-
Total revenues increased 52.8% to £14,154,530
($26,648,167) from £9,912,515 ($17,431,158).
-
Gross profit margins also improved, rising to 39%
from 33%.
-
Revenue contribution from XFONE USA rose 143% to
£5,950,394 ($11,202,569) from £2,625,530
($4,616,995).
-
Operating profit grew 215.8% to £426,716 ($803,361)
from £144,643 ($254,356).
-
Net income increased to £299,884 ($564,580), or
£0.03 ($0.06) earnings per basic share, compared to
a loss of £15,469 ($27,202), or a loss of £0.00
($0.00) per basic share.
As of September 30, 2006, XFONE, Inc. had £4,829,735
($9,092,749) in cash and accounts receivable; and
total shareholders’ equity of £10,277,766
($19,349,540)
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Operational
Highlights:
-
During the quarter the Israel Securities Authority
and the Tel Aviv Stock Exchange (“TASE”) approved
the dual listing of the Company on the TASE. Trading
on TASE commenced on July 24, 2006.
-
In mid-September 2006, the Company reported a
substantial growth in network traffic at its wholly
owned UK subsidiary, Swiftnet Limited. During August
Swiftnet gained 20,000 new customers, primarily
through its “Text & Talk” service. Swiftnet is
taking steps to increase its network capacity in
order to accommodate the resulting volume growth.
-
During the quarter the Company also completed the
integration of Equitalk and finalized the deployment
of Equitalk’s billing system.
-
XFONE USA initiated collocation processes and switch
upgrading during the quarter, to migrate over one
thousand residential customers to the XFONE switch.
-
On August 30, 2006, XFONE 018 was granted a license
to operate in Israel as an Internet Service Provider
(ISP).
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Guy
Nissenson, President and Chief Executive Officer of
XFONE, Inc., stated, “During the quarter we achieved
very strong performance across all of our operations,
with approximately 40% of our sequential growth during
the quarter being organic. Our strong growth, coupled
with synergies that we are realizing from recent
acquisitions, drove significant margin improvement. In
Israel, for example, we have built the business from
zero to EBITDA positive in less than two years and are
very optimistic about the opportunity for continued
growth. In the U.S. and UK we continue to build our
presence as a leading facilities-based telecom provider
with new service offerings and customer service
improvements. In addition, we believe that many of the
synergies related to recent acquisitions, as well as the
full cost benefit from the new infrastructure build out
in the U.S. are not yet reflected in our financial
performance.”
XFONE will host a teleconference today, beginning at
9:00 AM Eastern, to discuss the third quarter results.
The conference call may be accessed in the U.S. and
Canada by dialing toll free 1-877-407-0782.
International callers may access the call by dialing
1-201-689-8567. A replay of the teleconference will be
available for thirty days and may be accessed
domestically by dialing 1-877-660-6853 and international
callers may dial 1-201-612-7415. Callers must enter
account number 286 and conference number 220373.
About XFONE, Inc.
A U.S.-domiciled corporation, XFONE, Inc. is an international voice, video and data communications services provider with operations in the United Kingdom, the United States and Israel that offers a wide range of services, which include: local, long distance and international telephony services; prepaid and postpaid calling cards; cellular services; Internet services; messaging services (Email/Fax Broadcast, Email2Fax and Cyber-Number); and reselling opportunities. The Company serves customers worldwide. For the Company’s website, please visit: www.xfone.com
This press release contains forward-looking statements. The words or phrases "should," "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." The Company's financial results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this press release, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, and license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the U.S. Securities and Exchange Commission.
| For More Information,
Please Contact: |
| U.S. IR Contact |
Israel IR Contact |
Xfone Contact |
John Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)
Phone: 1-203-972-9200
E-mail: jnesbett@institutionalms.com
|
Zvi Rabin
Kwan Communications
Tel: (Israel) +972 50 560 0140
E-mail: zvi@kwan.co.il |
Niv Krikov
Chief Financial Officer
Phone: + 972.39254446 (Israel)
E-mail: niv@xfone.com |
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