Phonetime Inc. (TSX: PHD), a leading supplier of international long distance telecommunication products and services, announced today its financial results for the second quarter and six months ended June 30, 2008. All figures are in Canadian currency.
Highlights of the Second Quarter
- Sales were $39.3 million, an increase of 71% over $23.0 million in the second quarter of 2007.
- Gross profit was $5.2 million, up 100% over $2.6 million in Q2 2007.
- EBITDA (earnings before interest, taxes, depreciation, amortization and stock compensation expenses) was $1.9 million compared to $247,000 in the second quarter of 2007.
- Net income was $734,000 compared to a net loss of $473,000 in second quarter of 2007.
- Paid down $1.2 million of long-term debt and other loans payable related to the Symphony acquisition in the quarter.
- Launched a new point of presence in Los Angeles, enabling its US-based carrier customers to streamline connectivity to Philippines, Malaysia, Hong Kong and other Pacific Rim countries.
- Processed approximately 1.4 billion minutes of long-distance calls.
Overview
"Our strong second quarter results provide further validation that our strategy to diversify our operations, expand our wholesale activities internationally, and prudently invest in network infrastructure is working," said Wayne Silver, President and CEO of Phonetime Inc. "Since the start of the year, we have improved the key performance metrics of our Wholesale and Retail Divisions, including sales, gross margins, net income, account receivables, customer wins and call volumes. We expect this steady growth to continue for the balance of 2008 based on the increasing demand for our telecommunications services, particularly within emerging markets in Asia, Africa and South America. We expect this trend to continue in Q3 as we have just completed our most profitable month ever in July."
Results for the Second Quarter
Consolidated sales for the second quarter of 2008 were $39.3 million, up 71% over $23.0 million in the second quarter of 2007. For the six months ended June 30, 2008, sales were $75.8 million, an increase of 71% when compared to $44.4 million in the same period of 2007. The growth is attributable primarily to higher sales volumes of the Company's Wholesale Division, which buys and resells telecommunications long-distance services to telephone carriers around the world using Phonetime's proprietary call trading platform. Phonetime also generates revenues through its Retail Division, which provides pre-paid calling cards and long-distance services to targeted ethnic consumer groups.
Gross profit for the second quarter of 2008 was $5.2 million or 13.2% of sales compared to $2.6 million or 11.3% of sales in the second quarter of 2007. The increase is due to higher sales experienced by both the Wholesale and Retail Divisions.
The net income for the second quarter of 2008 was $734,000 or $0.01 per basic share compared to a net loss of $473,154 or $0.01 per basic share in the second quarter of 2007. For the six months ended June 30, 2008, net income was $1.4 million or $0.01 per basic share, compared to a net loss of $837,000 or $0.01 per basic share for the same period in 2007. The improvement was principally due to performance gains by the Company's Wholesale Division.
In the second quarter of 2008, Phonetime had negative cash flow from operations of $984,000 compared to negative cash flow from operations of $1.7 million in the second quarter of 2007. The Company's closing bank balance and net cash flow were negatively impacted by the quarter end coinciding with the statutory banking holiday period. For the six months ended June 30, 2008, cash flow from operations was $1.3 million compared to negative cash flow of $2.2 million in the same period of 2007. -- www.cnxmarketlink.com
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