XFONE ANNOUNCES
2005 YEAR END RESULTS, POSTING
RECORD REVENUE, CONTINUED PROFITABILITY AND
STRONG POSITIVE CASH FLOW
April 3, 2006
JACKSON, MS – (BUSINESS WIRE) – April 3, 2006 – XFONE, Inc. (AMEX: XFN) (“XFONE” or “the Company”), a provider of international voice and data communications services, announced that on Friday afternoon it filed its annual report on Form 10K-SB with the U.S. Securities and Exchange Commission reflecting financial results for the fiscal year ended December 31, 2005.
Fiscal Year 2005 Financial Highlights (translated
into US dollars for convenience):
-
Revenues increased 25% to £14,113,748 (US$24,346,215) from £11,330,116 (US$21,867,124).
- Gross profit margins improved to 34%, up from 29% in 2004.
- Largely due to continued investment in 018, the Company’s Israel-based operations launched in December 2004, and the impact of Hurricane Katrina on the Company’s US-based operations in Mississippi and Louisiana, net income declined to £26,078 (US$44,983) from £39,874 (US$76,957). 2005 marked the sixth consecutive year of net profitability for XFONE, Inc.
- Basic earnings per share in 2005 were £0.004 (US$0.007) compared to £0.007 (US$0.013) in 2004.
- As of December 31, 2005, the Company had approximately £6 million (US$10.4 million) in cash and accounts receivables and stockholders’ equity of approximately £5 million (US$8.7 million).
- Net cash generated from operations increased to £854,515 (US$1,474,035), compared to net cash used by operations of £972,106 ($1,876,164) in the prior year.
Operational Highlights for 2005:
-
XFONE, Inc. advanced onto to the American Stock Exchange in June 2005.
- The Company expanded and enhanced its executive management team with the addition of Alon Mualem as Chief Financial Officer.
- XFONE USA expanded its geographic service area into Louisiana with the signing of definitive agreements (and corresponding management agreements) to acquire both I-55 Internet Services, Inc. and I-55 Telecommunications, Inc. Both acquisitions were completed in the first quarter of 2006.
- XFONE 018 had logged approximately 150,000 registered and unregistered users since first launching operations in mid-December 2004 and processed approximately over nine million call minutes in the month of December 2005.
- The Company’s UK-based operation proved, once again, to be a stable contributor to XFONE’s overall growth in 2005 and is preparing to embark upon an ambitious plan to pursue expanded penetration of the U.K. telecommunications market in the current year.
Commenting on the year end results, Guy Nissenson, Chief Executive Officer of XFONE, Inc., stated, “We are very pleased to announce our sixth consecutive year of record results - reaching new highs in revenue. Moreover, despite the hit we took in our US operations from Hurricane Katrina, we also successfully booked our sixth consecutive year of profitability. Overall, 2005 was a defining year for our Company and it is continuing into 2006. XFONE has made several important acquisitions in the first quarter of this year that are based on our overall strategy to substantially increase revenues, improve our bottom-line performance and enhance shareholder value. These steps are essential to both accelerate our penetration of existing markets and expand further into related markets.”
Continuing, Nissenson added, “Based on successful execution of our 2006 growth strategy, which includes the recent acquisitions of Canufly.net and EBI Communications in the U.S. gulf coast region, it appears that we remain firmly on track to achieve our strongest year yet, with profitability expected in every one of our operating regions.”
XFONE will host a conference call this morning beginning at 10:15 AM 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 303-262-2125. For those unable to participate at that time, a replay of the teleconference can be accessed domestically by dialing 1-800-405-2236 and enter the passcode 11056491# or, for international callers, please dial 303-590-3000 and enter the passcode 11056491#. The replay will be available for 30 days.
| XFONE, INC. AND
SUBSIDIARIES |
CONSOLIDATED
STATEMENT OF OPERATIONS
(Audited) |
| |
Years
Ended
December 31 |
Year
Ended
December 31 |
| |
2005 |
2004 |
2005
Convenience translation
into U.S.$ |
| Revenues |
£14,113,748 |
£11,330,116 |
24,346,215 |
| Cost of revenues |
(9,254,597) |
(7,991,375) |
(15,964,180) |
| |
| Operating expenses: |
|
|
|
| Research and development |
(6,896) |
(25,945) |
(11,896) |
| Marketing and selling |
(1,262,182) |
(1,626,288) |
(2,177,264) |
| General and administrative |
(3,635,819) |
(1,573,726) |
(6,271,788) |
| |
|
|
|
| Total operating expenses |
(4,904,897) |
(3,225,959) |
(8,460,948) |
| |
| Operating profit |
(45,746) |
112,782 |
(78,913) |
Financing expenses -
net |
(122,338) |
(83,403) |
(211,033) |
| Equity in income of affiliated company |
76,800 |
20,885 |
132,480 |
| Loss from hurricane Katrina |
(38,703) |
|
|
| Other income |
104,646 |
21,128 |
180,514 |
| |
| Income before minority interest and taxes |
(25,341) |
71,392 |
(43,715) |
| |
| Minority Interest |
113,960 |
|
196,581 |
| |
| Income Before taxes |
88,619 |
71,392 |
152,866 |
| |
| |
(62,541) |
(31,518) |
(107,883) |
| |
| Net (loss) income |
£26,078 |
£39,874 |
44,983 |
| |
| Earnings Per Share: |
|
|
|
Basic
|
£0.004 |
£0.007 |
0.007 |
| |
Diluted
|
£0.003 |
£0.005 |
0.006 |
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 |
John Nesbett/Jennifer Beloeau
Institutional Marketing Services (IMS)
Phone: 1.203.972.9200.
E-mail: jnesbett@institutionalms.com |
|
| Xfone Contact |
|
Niv Krikov
Chief Financial Officer
Phone: + 972.39254446 (Israel)
E-mail: E-mail: niv@xfone.com |
|
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