Revenues Climb 39% and Net Income Increases 107% for Three Months
Ended June 30, 2006 JACKSON, Miss., Aug. 14 /PRNewswire-FirstCall/
-- XFONE, Inc. (AMEX:XFN) (TASE:XFN) ("XFONE" or "the Company"), a
provider of international voice, video and data communications
services, today announced its second quarter financial results for
the three and six months ended June 30, 2006. Financial highlights
for the three months ended June 30, 2006 compared to the three
months ended June 30, 2005 (translated into US dollars for
convenience): - Total revenues rose to a record 4,525,256 pounds
Sterling ($8,367,198), up 39% from 3,255,552 pounds ($5,833,950). -
Gross profit margin on sales increased to 37.8% from 34.4%. - XFONE
USA revenues climbed 110% to 1,893,615 pounds ($3,501,294) from
901,816 pounds ($1,616,054). - XFONE's operations in the UK
contributed 1,948,019 pounds ($3,601,887) to total revenues, a 4%
decline from revenues of 2,019,637 pounds ($3,619,191). - Revenues
from XFONE 018, the Company's Israel-based operations, totaled
683,622 pounds ($1,264,017), representing a 105% increase over
334,099 pounds ($598,705). - Net income grew 107% to 123,964 pounds
($229,209), or 0.013 pounds ($0.024) earnings per basic share,
compared to 59,837 pounds ($107,229), or 0.009 pounds ($0.016)
earnings per basic share. Financial highlights for the six months
ended June 30, 2006 compared to the six months ended June 30, 2005:
- Total revenues increased 39% to 9,026,545 pounds ($16,690,082)
from 6,493,332 pounds ($11,636,050) - Gross profit margins also
improved, rising to 37.0% from 33.2%. - Revenue contribution from
XFONE USA rose 123% to 3,931,337 pounds ($7,269,042) from 1,762,899
pounds ($3,159,115), due primarily from the acquisitions of I-55
Internet Services and I-55 Telecommunications. - Revenues generated
by XFONE's operations in the UK decreased 10% to 3,761,517 pounds
($6,955,045) compared to 4,198,124 pounds ($7,523,038). - XFONE 018
revenues rose 151% to 1,333,691 pounds ($2,465,995) from 532,309
pounds ($953,898). - Net income increased 81.8% to 187,853 pounds
($347,342), or 0.021 pounds ($0.039) earnings per basic share, up
from 103,334 pounds ($185,175), or 0.016 pounds ($0.028) earnings
per basic share. As of June 30, 2006, XFONE, Inc. had 4,103,633
pounds ($7,587,618) in cash and accounts receivable; and total
shareholders' equity of 8,909,365 pounds ($16,473,417). Operational
Highlights: - XFONE USA completed the acquisitions of I-55 Internet
Services and I-55 Telecommunications in April 2006. - On May 31,
2006, XFONE 018 was granted permission by the Israel Ministry of
Communications to commence experimental deployment of Voice over
Broadband (VoB) services in Israel. - In early July 2006, the
Company completed the acquisition of Equitalk.co.uk Limited, which
followed the acquisition of controlling interest of Story Telecom,
Inc. in May 2006, collectively strengthening the Company's
value-driven, long term growth platform in the United Kingdom. The
Company appointed John Mark Burton, founder and former CEO of
Equitalk, as XFONE's Managing Director for its UK operations. - In
July 2006, XFONE, Inc. was approved for dual-listing on the Tel
Aviv Stock Exchange, thus enhancing the size and scope of its
global investment audience, while also leveraging XFONE 018's
growing business presence in the Israeli market. Guy Nissenson,
President and Chief Executive Officer of XFONE, Inc., stated, "We
continue to be very proud of our Company's overall financial and
operational performance. With the ongoing successful execution of
our well defined growth strategy - notably growth through select
acquisitions and consolidation of our business interests in the
U.S. and in the U.K., coupled with a number of exciting high growth
opportunities being pursued by XFONE 018 in Israel, XFONE, Inc. is
strong and getting stronger." Continuing, Nissenson, noted, "We are
particularly proud to have been granted a dual-listing on the Tel
Aviv Stock Exchange, as it represents a key step forward in XFONE's
effort to support our growing global audience of shareholders and
Company supporters. In light of the nature of our business
interests in Israel, I believe it is also important to note that
the recent escalation of hostilities in Israel have not affected
us. Rather, XFONE has endeavored to come to the aid of those living
in northern Israel most impacted by the hostility, by providing
them with 500 free minutes of international phone service. It is
our hope that peace will be restored to the region as quickly as
possible. In the meantime, XFONE remains committed to providing our
Israel-based customers with the highest possible level of service
and attention." XFONE 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 1-800-240-2430. International callers can access
the call by dialing 303-205-0066. 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
11067792#. International callers may dial 303-590-3000 and enter
the passcode 11067792#. The replay will be available for 30 days.
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 telephone services; prepaid
and postpaid calling cards; cellular services reselling
opportunities; and email and fax broadcasting services. The Company
serves customers across Europe, Asia, North America, South America,
Australia and Africa. This press release contains forward-looking
statements. The words or phrases "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." XFONE's
financial and operational 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 news
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,
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. XFONE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) 3 Months Ended 6
Months Ended June 30, June 30, 2006 2005 2006 2005 (In pounds
Sterling) Revenues 4,525,256 3,255,552 9,026,545 6,493,332 Cost of
revenues (2,815,936) (2,136,612) (5,684,388) (4,335,529) Gross
profit 1,709,320 1,118,940 3,342,157 2,157,803 Operating expenses:
Research and development (5,625) (5,000) (11,250) (10,000)
Marketing and selling (428,517) (272,870) (818,730) (657,060)
General and administrative (1,156,429) (781,321) (2,308,132)
(1,419,579) Total operating expenses (1,590,571) (1,059,191)
(3,138,112) (2,086,639) Operating profit 118,749 59,749 204,045
71,164 Financing expenses - net (27,562) (26,467) (106,033)
(41,275) Equity in income of affiliated company 20,962 14,444
72,378 47,532 Loss from a change of holding of affiliated company -
- (29,848) - Other income 16,890 10,808 23,069 13,140 Income before
minority interest and taxes 129,039 58,534 163,611 90,561 Minority
Interest (5,029) 23,072 6,677 53,992 Income Before taxes 124,010
81,606 170,288 144,553 Benefit (taxes on income) (46) (21,769)
17,565 (41,219) Net income 123,964 59,837 187,853 103,334 Weighted
average shares outstanding Basic 9,800,069 6,884,521 9,033,069
6,552,696 Diluted 10,374,782 6,884,521 9,607,782 6,552,696 Earnings
Per Share: Basic 0.013 0.009 0.021 0.016 Diluted 0.012 0.009 0.020
0.016 3 Months Ended 6 Months Ended June 30, June 30, 2006 2006 US$
US$ Revenues $8,367,198 $16,690,082 Cost of revenues (5,206,666)
(10,510,433) Gross profit 3,160,532 6,179,649 Operating expenses:
Research and development (10,401) (20,801) Marketing and selling
(792,328) (1,513,832) General and administrative (2,138,237)
(4,267,736) Total operating expenses (2,940,966) (5,802,369)
Operating profit 219,566 377,280 Financing expenses - net (50,962)
(196,055) Equity in income of affiliated company 38,759 133,827
Loss from a change of holding of affiliated company - (55,189)
Other income 31,230 42,655 Income before minority interest and
taxes 238,593 302,518 Minority Interest (9,299) 12,346 Income
Before taxes 229,294 314,864 Benefit (taxes on income) (85) 32,478
Net income $229,209 $347,342 Weighted average shares outstanding
Basic 9,800,069 9,033,069 Diluted 10,374,782 9,607,782 Earnings Per
Share: Basic $0.024 $0.039 Diluted $0.022 $0.037 FOR MORE
INFORMATION, PLEASE CONTACT XFONE, Inc. Alon Mualem, Chief
Financial Officer, 011-972-39254446 or via email at Or Elite
Financial Communications Group Dodi Handy, 407-585-1080 or via
email at DATASOURCE: XFONE, Inc. CONTACT: Alon Mualem, Chief
Financial Officer of XFONE, Inc., +011-972-39254446, or ; or Dodi
Handy of Elite Financial Communications Group, +1-407-585-1080, or
Web site: http://www.xfone.com/
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