XFONE ACHIEVES
STRONG REVENUE GROWTH IN
THIRD QUARTER 2004 AND BEGINS ISRAEL BUILDOUT
November 16, 2004
LONDON – (BUSINESS WIRE) – November 16, 2004 –
XFONE, Inc. (OTCBB: XFNE) (“XFONE” or “the Company”),
a provider of international voice and data communications
services, yesterday announced its financial results for
the three and nine month periods, ended September 30,
2004. Highlights included:
- Strong Revenue Growth – For the
current nine month reporting period, XFONE increased
revenue 46% compared to the same period in the prior
year. Revenue for the three month period ended September
30, 2004 rose 9% over the comparable three month 2003
period and 21% over second quarter 2004 revenue.
- Israel Buildout – During the third
quarter of 2004, XFONE Communication, Ltd., a majority-owned
subsidiary of XFONE, Inc., began building out its
network and administrative infrastructure in Israel
to prepare for its offering of international telecommunications
services to Israel consumers prior to yearend 2004.
In July 2004, XFONE Communication was awarded an international
telecom carrier license by the State of Israel, making
it only the sixth long distance provider in that $330
million market.
As of September 30, 2004, the Company had approximately £1 million (US$1.7 million) in cash and stockholders’ equity of approximately £2.5 million (US$4.4 million).
Revenue for the three months ended September 30, 2004 totaled £2.7 million, a 9% increase compared with £2.5 million for the three months ended September 30, 2003. The Company incurred a loss from operations of (£105,000) in the third quarter of 2004, compared with income from operations of £164,000 in the third quarter of 2003. For the quarter ended September 30, 2004, income from operations was negatively impacted by total operating expenses of £82,000 incurred as a result of our network and administrative build-out in Israel. As noted above, the Company plans to begin offering services in Israel later this month. Net loss applicable to common stockholders was (£73,000), or (£0.01) per share as compared to net income applicable to common stockholders of £127,000 or £0.02 per share for the third quarter of 2003.
Revenue for the nine months ended September 30, 2004 was £7.2 million, a 46% increase compared with £5.0 million for the nine months ended September 30, 2003. Income from operations for the nine months ended September 30, 2004, was £129,000 compared with £384,000 of income from operations during the same period last year. Net income applicable to common stockholders was £101,000, or £0.02 per share for the nine months ended September 30, 2004, compared with net income applicable to common stockholders of £300,000, or £0.06 per share for the nine months ended September 30, 2003.
Translating the Company’s current results into U.S. dollars, revenue for the three months ended September 30, 2004, was $4.9 million, loss from operations was ($190,000) and net loss applicable to common stockholders was ($131,000), or ($.02) per share. For the current nine month period, XFONE booked $13 million in revenue, $232,000 in income from operations and $182,000 in net income applicable to common stockholders, or $.03 per share. Third quarter expenses associated with the Israel build-out totaled approximately $158,000.
Guy Nissenson, Company president and chief executive officer, stated “XFONE remains on track to deliver its fifth consecutive year of revenue growth in 2004, and with the year nearly behind us, we remain squarely focused on perpetuating the exciting fundamental progress we’ve put in motion. Looking ahead, our business prospects are extremely robust, due largely to the prevailing growth opportunity we intend to fully exploit in Israel; our growth-through-acquisition strategy; our growing global customer base; the expertise of our employees and management team; and the loyal support of our shareholders.”
XFONE, Inc. and Subsidiaries
Condensed Consolidated
Statements of Operations |
| (Unaudited) (All currency
amounts in British Pounds Sterling) |
| |
Three months ended |
Nine months ended |
| |
September 30, |
September 30, |
| |
2004 |
2003 |
2004 |
2003 |
| Revenue |
£ 2,704,934 |
£ 2,482,654 |
£ 7,244,644 |
£ 4,968,263 |
| Cost of sales |
2,004,086 |
1,695,135 |
5,181,121 |
3,125,852 |
| Gross Profit |
700,848 |
787,519 |
2,063,523 |
1,842,411 |
Selling, General and
Administrative Expenses |
792,398 |
613,185 |
1,900,844 |
1,428,878 |
| Research and Development |
13,890 |
10,443 |
33,890 |
29,443 |
| Total operating expenses |
806,288 |
623,628 |
1,934,734 |
1,458,321 |
| Income from operations |
(105,440) |
163,891 |
128,789 |
384,090 |
| Net income (loss) |
£ (72,879) |
£ 127,385 |
£ 101,049 |
£ 299,920 |
| |
| XFONE, Inc. and Subsidiaries
Condensed Balance Sheet |
| (Unaudited) (All currency
amounts in British Pounds Sterling) |
| |
|
September 30, 2004 |
|
| Assets |
|
|
|
| Cash and cash equivalents |
|
£
961,442 |
|
| Accounts receivable, net |
|
2,003,509
|
|
| Other current assets |
|
909,200 |
|
| Property and equipment, net |
|
1,055,399 |
|
| Other assets |
|
243,729 |
|
| Total Assets |
|
£
5,173,279 |
|
| Liabilities and Stockholders'
Equity |
|
|
|
| Accounts payable |
|
£
1,689,151 |
|
| Other current liabilities |
|
870,738
|
|
| Other liabilities |
|
145,346 |
|
| Total liabilities |
|
2,705,235
|
|
| Common stock |
|
4,214 |
|
| Additional paid-in capital |
|
1,569,719 |
|
| Retained earnings |
|
894,111 |
|
| Total stockholders' equity |
|
2,468,044 |
|
| Total Liabilities and Stockholders'
Equity |
£
5,173,279 |
|
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 across Europe, Asia, North, Central and South America, Australia 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: |
 |
| U.S.
IR Contact |
Israel IR Contact |
John Nesbett/Jennifer Beloeau
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 |
|
| Xfone Contact |
|
Niv Krikov
Chief Financial Officer
Phone: + 972.39254446 (Israel)
E-mail: E-mail: niv@xfone.com |
|
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