AJAX, ONTARIO--(Marketwire - March 31, 2011) - Phonetime Inc. (TSX:PHD) announced its financial results for the year ended December 31, 2010. In 2010, Phonetime achieved $3.0 million of Income before undernoted on revenue of $143 million compared to earning $1.5 million in 2009 on revenue of $168.1 million (see table below).
During 2010, the Company narrowed its business focus and now exclusively focuses on wholesale telecommunications traffic over its network. In 2010, Phonetime raised $3.2 million in equity, reduced its liabilities by $10.4 million and completed 2010 with $1.8 million in cash reserves.
Operating results:
| ($000s) | December 31, | December 31, | ||||
| 2010 | 2009 | |||||
| Revenue | $ | 143,013 | $ | 168,140 | ||
| Cost of Revenue | $ | 134,029 | $ | 158,181 | ||
| $ | 8,984 | $ | 9,959 | |||
| Operating expenses (note 13) | $ | 5,963 | $ | 8,510 | ||
| Income before undernoted | $ | 3,021 | $ | 1,449 | ||
| Corporate expenses | $ | 1,341 | $ | 1,178 | ||
| Severance expense | $ | 1,003 | $ | - | ||
| Depreciation of property, plant and equipment | $ | 814 | $ | 710 | ||
| Amortization of intangible assets | $ | 1,032 | $ | 1,085 | ||
| Interest and debt costs | $ | 846 | $ | 679 | ||
| Stock-based compensation | $ | 226 | $ | 413 | ||
| Stock issued for services | $ | - | $ | 125 | ||
| Recovery due to misappropriation | $ | - | $ | (150 | ) | |
| $ | 5,262 | $ | 4,040 | |||
| Loss before incomes taxes and discontinued operations | $ | (2,241 | ) | $ | (2,591 | ) |
| Income taxes - current | $ | 106 | $ | 273 | ||
| Income taxes - future income tax | $ | - | $ | (436 | ) | |
| $ | 106 | $ | (163 | ) | ||
| Loss before discontinued operations | $ | (2,347 | ) | $ | (2,427 | ) |
| Discontinued operations (net of tax of Nil) (note 7) | $ | (1,287 | ) | $ | (765 | ) |
| Net loss and comprehensive loss for the year | $ | (3,634 | ) | $ | (3,192 | ) |
"2010 was a challenging year at Phonetime. We made many difficult decisions as we refocused our efforts to ensure sustained success in 2011 and beyond." said Gary Clifford, Chairman and CEO. "In 2011, we expect to extend or replace our existing bank debt facility and to raise equity, this will allow Phonetime to move forward with its plans to grow revenue and profits in 2011."
The Company's annual financial statements together with its Management Discussion and Analysis can be found on www.sedar.com. Investors are reminded to read all public filings of any Company before making an investment decision.
In 2010, Phonetime's board of directors made the decision to focus on its largest value creation opportunity for shareholders and exited all other business opportunities. Below is management's progress report:
| Objective | Action | |
| Increase equity | Added $3 Million equity in 2010 | |
| Reduce liabilities | Reduced liabilities by $10 Million in 2010 | |
| Refinance debt | Extended senior debt facility through April 30th, 2011 Extended junior subordinated debt through 2013 Paid off subordinated debt and capital leases in 2010 |
|
| Exit non-strategic assets | Completed (August 30th, 2010) | |
| Maintain revenue levels for 2010 | Achieved 85% of 2009 revenue Eliminated non-contributing margin revenue | |
| Right size staff | Staff reduced to 45 from 138 in December 2009 | |
| Restore profitability in 2010 | Margins 6.3% in 2010 compared to 5.9% in 2009 Income from operations, prior to Corporate and Severance costs was $3.0 million compared to $1.5 million in 2009 Net loss before income taxes and discontinued operations was $2.2 million compared to $2.6 million in 2009 Net loss was $3.6 million compared to $3.2 million in 2009 |
|
| Strengthen Board of Directors | New slate of directors put in place in August 2010 |
About Phonetime Inc.
Phonetime handles the completion of long distance telecommunications around the world. In 2010, Phonetime completed 720 million phone calls with duration of over 4 billion minutes in 2010. Phonetime is a best in class provider of outsourced telecommunication services. Phonetime's common shares are traded on the Toronto Stock Exchange under the symbol PHD. More information can be found at the Company's website, www.phonetime.com.
Caution Regarding Forward Looking Information:
This press release contains forward-looking statements, which may be identified by words like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. These statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. Phonetime's actual results could differ materially from those currently anticipated due to a number of factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time. See www.sedar.com which contains all securities filings.
Contact Information: Phonetime Inc.
Gary Clifford
Chairman of the Board and CEO (Interim)
+1 416-418-9802
gary@phonetime.com
www.phonetime.com