XFONE REVENUES CLIMB 37% TO
APPROXIMATELY $38M
AND OPERATING INCOME INCREASES BY MORE THEN $1M
FOR YEAR ENDED DECEMBER 31, 2006
Company Achieves High End of Projected
Revenue Range for 2006
Company On Track To Achieve 20-25% Organic Growth in
Fiscal 2007
With Improved Margins
April 2, 2007
JACKSON, MS -April 2, 2007 - XFONE, Inc. (AMEX and TASE: XFN) ("XFONE" or "the Company"), an international diversified communications services company announced financial results for the year ended December 31, 2006.
Financial highlights for the twelve months ended December 31, 2006 compared to the twelve months ended December 31, 2005 (translated into US dollars for convenience):
- Total revenues increased 37% to £19,353,771 ($37,971,037) from £14,113,748 ($24,346,215).
- Gross profit margins also improved, rising to 42% from 34% last year.
- XFONE USA revenues climbed 75% to £7,899,033 ($15,474,206) from £4,516,472 ($7,790,914).
- XFONE'S operations in the UK contributed £8,652,945 ($16,951,119) to total revenues, a 6% increase from revenues of £8,141,765 ($14,044,546) last year.
- Revenues from XFONE 018, the Company's Israeli-based operations, totaled £2,801,793 ($5,488,712), representing a 92% increase over £1,455,511 ($2,510,755). Notably, XFONE 018 achieved its first quarter of profitability during the fourth quarter.
- Operating profit grew to £528,342 ($1,035,022) from a loss of £45,746 ($78,913).
- EBITDA for the year increased to $2,127,107 from $346,201 last year.
- Net income increased to £337,262 ($660,696), or £0.033 ($0.065) earnings per basic share, compared to £26,078 ($44,983), or £0.004 ($0.007) per basic share.
As of December 31, 2006, XFONE, Inc. had £4,493,566 ($8,802,896) in cash and accounts receivable; and total shareholders' equity of £9,939,897 ($19,472,259).
Commenting on the results, Guy Nissenson, President and CEO of XFONE, stated, "XFONE achieved the high end of the revenue range we projected at the beginning of the year. I am particularly pleased with the robust organic growth resulting from a consistent focus on customer service, as well as the $4.9 million we invested in sales and marketing for the year. Gross margins improved significantly throughout the year as we made progress integrating the acquisitions we closed early in 2006. Acquisitions will continue to be an important growth driver as we look to scale the business to become a multi-hundred million dollar international telecom services provider."
Business Outlook:
XFONE also provided the following business outlook for the first quarter ended March 31, 2007 and the fiscal year ended December 31, 2007.
For the first quarter ended March 31, 2007, XFONE expects to achieve continued sequential organic revenue growth. Furthermore, XFONE expects net income in the first quarter of 2007 to be significantly higher then previous quarters.
For fiscal 2007, XFONE expects to report organic revenue growth, excluding acquisitions, of 20 - 25%.
Commenting on XFONE's business outlook, Guy Nissenson, stated, "Our U.S., U.K., and Israeli divisions are all performing well as we head into 2007. In Israel, where we are one of only four companies licensed to provide International services, we have seen particular strength in the beginning of 2007."
Conference Call:
The company will host a conference call on Monday April 2 beginning at 9:00 a.m. Eastern Standard Time, to discuss its financial results for the year ended December 31, 2006.
XFONE invites all interested parties to join management's discussion of the Company's financials, corporate progression and other meaningful developments. The conference call may be accessed in the U.S. and Canada by dialing toll- free 1-877-407-8033. International callers may access the call by dialing 1-201-689-8033.
A replay of the teleconference will be available for 30 days after the call 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 236415.
To access the live webcast, log onto the XFONE website
at http://www.xfone.com.
The webcast can also be accessed at http://www.InvestorCalendar.com.
An online replay will be available shortly after the call.
| Xfone, Inc. and Subsidiaries |
| |
| STATEMENT OF OPERATIONS |
GBP |
USD |
| |
Years Ended
December 31, 2006 |
Years Ended
December 31, 2005 |
Year Ended
December 31, 2006 |
Year Ended
December 31, 2005 |
| |
Convenience translation
into U.S.$ |
| |
| Revenues |
£19,353,771 |
£14,113,748 |
$37,914,037 |
$24,346,215 |
| Cost of revenues |
(11,214,394) |
(9,254,597) |
(21,968,998) |
(15,964,180) |
| |
|
|
|
|
| Gross profit |
8,139,377 |
4,859,151 |
15,945,039 |
8,382,035 |
| |
|
|
|
|
| Operating expenses: |
|
|
|
|
| Research and development |
(23,333) |
(6,896) |
(45,709) |
(11,896) |
| Marketing and selling |
(2,520,167) |
(1,262,182) |
(4,937,007) |
(2,177,264) |
| General and administrative |
(5,067,535) |
(3,635,819) |
(9,927,301) |
(6,271,788) |
| |
|
|
|
|
| Total operating expenses |
(7,611,035) |
(4,904,897) |
(14,910,017) |
(8,460,948) |
| |
|
|
|
|
| Operating profit (loss) |
528,342 |
(45,746) |
1,035,022 |
(78,913) |
| Financing expenses - net |
(276,002) |
(122,338) |
(540,688) |
(211,033) |
| Equity in income of affiliated company |
30,921 |
76,800 |
60,574 |
132,480 |
Loss from a change of holding of
affiliated company |
(29,848) |
- |
(58,472) |
- |
| Loss from hurricane Katrina |
- |
(38,703) |
- |
(66,763) |
| Other income |
43,248 |
104,646 |
84,723 |
180,514 |
| |
|
|
|
|
Income (loss) before minority interest
and taxes |
296,661 |
(25,341) |
581,159 |
(43,715) |
| |
|
|
|
|
| Minority Interest |
41,757 |
113,960 |
81,802 |
196,581 |
| |
|
|
|
|
| |
|
|
|
|
| Income Before taxes |
338,418 |
88,619 |
662,961 |
152,866 |
| |
|
|
|
|
| Taxes on income |
(1,156) |
(62,541) |
(2,265) |
(107,883) |
| |
|
|
|
|
| Net income |
£337,262 |
£26,078 |
$660,696 |
$44,983 |
| |
|
|
|
|
| Weighted average shares outstanding |
|
|
|
|
| Basic |
10,135,874 |
6,868,471 |
10,135,874 |
6,868,471 |
| |
|
|
|
|
| Diluted |
10,135,874 |
7,943,184 |
10,135,874 |
7,943,184 |
| Earnings Per Share: |
|
|
|
|
| Basic |
0.033 |
0.004 |
0.065 |
0.007 |
| |
|
|
|
|
| Diluted |
0.033 |
0.003 |
0.065 |
0.006 |
| The accompanying notes are an integral
part of these consolidated financial statements |
| |
| |
| Xfone, Inc. and Subsidiaries |
| |
| Reconciliation of Non-GAAP Financial
Measures |
GBP |
USD |
| |
Years Ended
December 31, 2006 |
Years Ended
December 31, 2005 |
Year Ended
December 31, 2006 |
Year Ended
December 31, 2005 |
| |
Convenience translation
into U.S.$ |
| |
| Net income/loss |
£337,262 |
£26,078 |
$660,696 |
$44,983 |
| Deprediation and amortization |
557,470 |
246,443 |
1,092,085 |
425,114 |
| Financing expenses - net |
276,002 |
122,338 |
540,688 |
211,033 |
Equity in income of Affiliated company
|
(30,921) |
(76,800) |
(60,574) |
(132,480) |
Loss from a change of holding of
affiliated company |
29,848 |
- |
58,472 |
|
| Loss from hurricane Katrina |
- |
38,703 |
- |
66,763 |
| Other income |
(43,248) |
(104,646) |
(84,723) |
(180,514) |
| Minority Interest |
(41,757) |
(113,960) |
(81,802) |
(196,581) |
| Taxes on income |
1,156 |
62,541 |
2,265 |
107,883 |
| EBITDA* |
1,085,812 |
200,697 |
2,127,107 |
346,201 |
| |
|
|
|
|
| * This release contains disclosure
of EBITDA, which is a non-GAAP financial measure.
The definition of EBITDA used to calculate the EBITDA
figures presented herein, while considered to be
a common definition used by investors and financial
analysts, may not be comparable to similarly titled
measures reported by other companies. The Company
believes that EBITDA provides an important additional
perspective on its operations. The Company's management
regularly evaluates its progress based on EBITDA.
The Company believes that EBITDA, while providing
useful information, should not be considered in
isolation or as an alternative to other financial
measures determined under GAAP, such as net income
or loss (as an indicator of operating performance)
or cash flow (as a measure of liquidity). |
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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