Xfone (NASDAQ:XFNE)
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XFONE Announces Record Revenues for First Quarter 2005
Revenues Up 44% and Company Maintains Profitability Despite Ongoing Investment
in New International Long Distance Carrier Operations in Israel
LONDON, May 16 /PRNewswire-FirstCall/ -- XFONE, Inc. (OTC:XFNE) (BULLETIN
BOARD: XFNE) ("XFONE" or "the Company"), a provider of international voice and
data communications services, today reported its first quarter financial
results for the three months ended March 31, 2005.
Financial Highlights for the Three Months Ended March 31, 2005 Compared to the
Three Months Ended March 31, 2004 Reflected in British Pounds (convenience
translation into U.S. Dollars):
* Revenues increased 43.6% to (pound)3,312,934 (US$6,228,317) from
(pound)2,307,215 (US$4,337,564).
* Due largely to expenses associated with the continued build-up of the
Company's new 'XFONE 018' international long distance operations in Israel, net
income declined to (pound)39,874 (US$76,957) from (pound)103,069 (US$193,770).
* Net Profit, excluding the Israeli "start up" losses, increased to
approximately (pound)150,949 ($247,218).
* Diluted earnings per share were (pound)0.004 (US$0.007) compared to
(pound)0.010 (US$0.019).
* The Company generated net cash from operations of (pound)25,244 ($47,458), up
from net cash used in operations of (pound)192,475 ($361,853).
* Stockholder equity increased to approximately (pound)4.1 Million ($7.8
Million)
* Revenues generated by XFONE's UK-based subsidiary, Swiftnet, were
(pound)2,253,639 ($4,236,841) for the three months ended March 31, 2005.
* XFONE USA, XFONE's U.S.-based subsidiary located in Jackson, Mississippi,
contributed (pound)861,083 ($1,618,836) in revenues for the three months ended
March 31, 2005.
* XFONE 018, the Company's new Israel-based subsidiary, produced (pound)198,210
($372,635) in revenue during its first three full months in operation from
January to March 2005.
* The Company has approximately (pound)3.5 Million ($6.5 Million) in cash and
account receivables.
Guy Nissenson, Company President and Chief Executive Officer, stated, "The
first quarter of 2005 represents a major milestone in the exciting growth of
our Company, going from a local operator in London to having the first full
quarter as a multi-national efficient Telecom Service provider with world class
operations in the UK, the United States and Israel. XFONE started the year 2005
on a record pace, and we are very proud of the fact that we have once again set
a new historical high in quarterly revenues. Each of our operating
subsidiaries performed well in the first quarter. Our operations in the United
Kingdom and in the United States each delivered strong results and achieved
high and solid revenues and profits. After only three full months in operation,
XFONE 018, our new long distance carrier business in Israel, is demonstrating
very strong revenue growth and is presently ramping towards achieving positive
cash flow ahead of our initial expectations.
"We are determined to continue implementing our business model that is based on
aggressive growth that generates considerable profitability. We are confident
that the exciting growth XFONE is experiencing will continue through the
remainder of the year," concluded Mr. Nissenson.
XFONE, Inc. will also host a teleconference this afternoon beginning at 4:15 PM
Eastern and invites all interested parties to join management in a discussion
regarding the Company's financials, corporate progression and other meaningful
developments. The conference call can be accessed in the U.S. by dialing toll
free 1-800-218-0713. International callers can access the call by dialing
303-262-2140.
For those unable to participate at that time, a replay of the teleconference
can be accessed domestically by dialing 1-800-405-2236 and entering the
passcode 11029658# or, for international callers, please dial 303-590-3000 and
enter the passcode 11029658#. The replay will be available for 30 days.
XFONE, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
March 31,
2005
March 31, December 31, Unaudited
2005 2004 (Convenience
Unaudited Audited translation into
(in Pounds) (in Pounds) U.S.$)
Current assets
Cash 643,048 797,097 $1,208,930
Accounts receivable, net 2,817,808 2,271,448 5,297,479
Prepaid expenses and
other receivables 538,167 693,524 1,011,754
Loan to shareholder 123,965 123,965 233,054
Total Current Assets 4,122,988 3,886,034 $7,751,217
Loan to shareholder 123,966 123,966 233,056
Investments 53,973 20,885 101,469
Fixed assets
Cost 2,296,695 1,516,854 4,317,787
Less - accumulated
depreciation (436,731) (261,561) (821,054)
Total fixed assets, net 1,859,964 1,255,293 3,496,733
Other Assets, net 2,379,060 57,106 4,472,633
Total assets 8,539,951 5,343,284 $16,055,108
Current liabilities
Notes payable -
current portion 578,493 72,041 $1,087,567
Trade payables 2,227,277 2,035,368 4,187,281
Other liabilities and
accrued expenses 670,435 224,032 1,260,418
Obligations under capital
leases - current portion 159,449 147,988 299,764
Total current liabilities 3,635,654 2,479,429 $6,835,030
Deferred taxes 311 52 585
Notes payable 666,031 509,867 1,252,139
Obligations under
capital lease 104,708 141,944 196,851
Total liabilities 4,406,704 3,131,292 $8,284,605
Guarantees, Commitments
& Liens
Shareholders' equity
Preferred stock - 50,000,000
shares authorized, none issued
Common stock:
25,000,000 shares authorised,
(pound).000532 par value;
6,220,871 issued and
outstanding 4,290 4,290 8,064
Foreign currency
translation adjustment (386) 1,210 (726)
Contributions in excess
of shares 3,252,910 1,373,556 6,115,471
Retained earnings 876,433 832,936 1,647,694
Total shareholders' equity 4,133,247 2,211,992 7,770,503
Total liabilities and
shareholders' equity 8,539,951 5,343,284 $16,055,108
XFONE, Inc. and Subsidiaries
STATEMENTS OF OPERATIONS
Three months
Ended
Three months Three months March 31,
Ended Ended 2005
March 31 March 31 Unaudited
2005 2004 (Convenience
Unaudited Unaudited translation
(in pounds) (in pounds) into U.S$)
Revenues 3,312,934 2,307,215 $6,228,317
Cost of revenues (2,274,071) (1,561,238) (4,275,254)
Gross profit 1,038,863 745,977 1,953,063
Operating expenses:
Research and development (5,000) (10,000) (9,400)
Marketing and selling (384,190) (367,207) (722,277)
General and administrative (638,258) (234,168) (1,199,925)
Total operating expenses (1,027,448) (611,375) (1,931,602)
Operating profit 11,415 134,602 21,461
Financing expenses - net (14,808) (10,846) (27,839)
Equity in income of
affiliated company 33,088 -- 62,205
Other income 2,332 5,313 4,384
Income before minority
interest and taxes 32,027 129,069 60,211
Minority Interest 30,920 -- 58,129
Income Before taxes 62,947 129,069 118,340
Taxes on income (19,450) (26,000) (36,566)
Net income 43,497 103,069 $81,774
Earnings Per Share:
Basic 0.007 0.020 $0.012
Diluted 0.004 0.010 $0.007
About XFONE, Inc.
A U.S.-domiciled corporation, XFONE is an international voice and data
communications services provider with operations in the United Kingdom, the
United States and Israel, and offers a wide range of services which include:
international and long distance telephone services; prepaid calling cards;
cellular services; VoIP services; reselling opportunities; and email and fax
broadcasting services. The Company serves customers in 75 countries across
Europe, Australia, North America, South America, Asia and Africa.
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 Securities and Exchange Commission.
FOR MORE INFORMATION, PLEASE CONTACT
Stephanie Noiseux, Elite Financial Communications Group
407-585-1080 or via email at
DATASOURCE: XFONE, Inc.
CONTACT: Stephanie Noiseux, Elite Financial Communications Group,
+1-407-585-1080, or , for XFONE, Inc.
Web site: http://www.xfone.com/