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/
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