XFONE Reports Record Second Quarter Revenues of $25.9 Million
and
Record EBITDA of $3.14 Million
- Company Achieves Major Milestone With Annualized Revenues
Surpassing $100 Million -
- Company Makes Significant Progress with Texas FTTP Build-Out -
August 14, 2008
Lubbock, TX – August 14, 2008 – XFONE, Inc. (AMEX and TASE: XFN) (“XFONE” or “the Company”) announced results for the second quarter and six months ended June 30, 2008.
Financial highlights for the three months ended June 30, 2008 compared to the three months ended June 30, 2007:
- Total revenues increased 122% to $25.9 million from $11.6 million
- EBITDA (earnings before interest, taxes, depreciation and amortization) was approximately $3.14 million versus $1 million
- Operating income increased 143% to $1.9 million compared to $781,293
- Net financing expenses increased to $3.1 million from $166,826. $2 million of the increase is attributed to the effect of fluctuation in the exchange rate of the New Israeli Shekel (‘NIS”) on our bonds stated in NIS. Subsequent to the second quarter, the value of the U.S. dollar has increased. The Company anticipates a significant gain in the third quarter if the U.S. dollar maintains or goes higher than its current valuation
- The Company reported a net loss of approximately $(1.0) million or $(0.052) per share assuming 18,404,632 diluted shares outstanding compared to net income of $411,439 or $0.036 per share assuming 11,531,220 diluted shares outstanding through June 30, 2007. This loss is attributable to the effect of fluctuation in the exchange rate of the NIS as described above.
Financial highlights for the six months ended June 30, 2008 compared to the six months ended June 30, 2007:
- Total revenues increased 79.9% to $41.6 million compared to $23.1 million
- Operating income increased 100% to $3 million compared to $1.5 million
- Net financing expenses for the six months ended June 30 increased to $4 million from $306,695. $2.3 million of the increase is attributed to the effect of fluctuations in the exchange rate of the NIS on our bonds stated in NIS
- Xfone reported a net loss of approximately $(0.9) million or $(0.052) per share assuming 16,864,161 diluted shares outstanding compared to net income of $855,834 or $0.075 per share assuming 11,481,080 diluted shares outstanding through the first six months of 2007. This loss is attributable to the effect of fluctuation in the exchange rate of the NIS as described above.
Guy Nissenson, President and CEO, commented, “We are very pleased to announce solid performance with record revenue and strong EBITDA. The second quarter marks the first full reporting period reflecting Xfone and NTS Communications operating as a combined business and the consolidation of the two companies is proceeding well. Especially encouraging is the performance of our fiber-to-the-premise (FTTP) triple play offering, where sales grew 4% sequentially and continue at a strong pace. We recently announced the completion of the first phase of our FTTP build out from Lubbock to Levelland, Texas and to date we’ve achieved approximately 15,000 passings in Lubbock, including in our estimation, approximately 60% of the economically viable businesses in the city. Notably, we reported $3 million in capital expenditures during the quarter, the majority of which are related to the growth of the FTTP network. Our FTTP service capability includes the highest available bandwidth, operating at approximately 20 times the speed of DSL, making it an appealing alternative to residential and business customers alike. Furthermore, we completed two additional Central Offices in Louisiana and Mississippi, successfully connecting our legacy networks in those states to the NTS network and achieving a total of 38 central office locations in the United States.”
“On a non-cash basis, our earnings were negatively impacted by the devaluation of the U.S. dollar and its impact on the valuation of our bonds in Israel. Subsequent to the second quarter, the value of the U.S. dollar has since increased and we anticipate a significant gain in the third quarter if the U.S. dollar maintains or goes higher than its current valuation. In addition our results included one-time acquisition related expenses such as the closure of redundant facilities, consolidation of operations and a decrease in headcount. These initiatives position the Company to begin realizing operational synergies in the near term.”
Mr. Nissenson continued, “Looking at each of our divisions in the second quarter, revenues from U.S. operations were approximately $18.7 million compared to $3.1 million in the second quarter of 2007 with NTS fully represented in our numbers. The U.S. now accounts for 73% of our total sales. Xfone 018, our Israeli division, generated approximately $2.4 million in the second quarter compared to $1.95 million in the same quarter of last year. Revenue from our U.K. division was $4.7 million in the June quarter, a decrease from approximately $6.5 million reported in the June quarter of last year. As we’ve mentioned previously, our U.K division has experienced sales pressure from a change in the tariff structure and while the division has effectively mobilized to address this pressure, a full return to comparable sales levels will take some time.”
Mr. Nissenson concluded, “The Company is gaining momentum from the benefits of the NTS acquisition. We remain focused on the growth opportunities presented by the build out of the FTTP network and look forward to enhancing our service offerings and increasing our geographic reach in the U.S.”
Conference Call:
The Company will host a conference call August 15 at 10:00 a.m. Eastern Time to discuss the financial results. 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 293813.
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.
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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