Tellza Announces 2014 Q1 Financial Results

TORONTO, ONTARIO--(Marketwired - May 6, 2014) - Tellza Communications Inc. (TSX:TEL) announced its unaudited financial results for the three months ended March 31, 2014.

Revenue was US$51.4 Million compared to US$34.0 Million in 2013, a growth of 51%. Net Income was US$0.3 million compared to net income of US$0.4 million in 2013. EBITDA* in Q1 2014 was US$0.8 million compared to US$0.7 million in 2013, an increase of 14%.

Tellza completed Q1 - 2014 with US$2.2 Million in cash and an undrawn credit facility of US$3.5 Million. Since 2011, Tellza has generated US$10.5 Million in Cash Profits* that have been utilized as set out in the below table:

To view 'Cumulative Cash Profits since 2011 $10.5M US', please visit the following link: http://media3.marketwire.com/docs/tell05061.jpg

To view 'Financial Metrics (USD '000's)', please visit the following link: http://media3.marketwire.com/docs/tell05062.jpg

CONSOLIDATED STATEMENTS OF OPERATIONS

[amounts in thousands of U.S. dollars, except per share information]

For the period ended March 31		2014		2013
		$		$
		(Unaudited)		(Unaudited)
Revenue		51,366		34,050
Cost of revenue		49,276		32,430
Gross margin		2,090		1,620
Operating expenses		1,290		875
Depreciation of property and equipment		74		31
Amortization of intangible assets		295		107
Stock-based compensation		3		13
Interest and debt costs		18		12
		1,680		1,038
Income before income taxes		410		582
Provision for (recovery of) income taxes
	Current	-		-
	Deferred	120		179
		120		179
Net and comprehensive income for the year		290		403
Earnings per share
	- basic and diluted	-		-
Weighted-average number of common shares
	- basic and diluted	183,631,945		151,231,492

"2014 is showing a continuation of the success achieved in 2013. In Q1-2014 we also completed the acquisition of MatchCom Communications, LLC", said Gary Clifford, Executive Chairman. "We are excited about our growth prospects in the coming years as we look to consolidate traffic in the Carrier Services Market."

The Company's financial statements and other disclosures are available on SEDAR.

The Company's corporate profile is located at www.tellza/investors.

About Tellza

Tellza is a global communications company operating under several brands including Route Dynamix, Phonetime, Tel3, MatchCom and Tellza Technologies. Tellza is a public company listed on the Toronto Stock Exchange (TEL).

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. Tellza'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 files.

*We define EBITDA and Cash Profits as earnings before taxes, depreciation and amortization, stock based compensation, and interest. EBITDA, which is a non-GAAP financial measure, it is a standard measure used in the telecommunications industry to assist in understanding and comparing operating results. EBITDA is reviewed regularly by management and our Board of Directors in assessing performance and in making decisions regarding the ongoing operations of the business and the ability to generate cash flows. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. EBITDA is not a measure of financial performance nor does it have a standardized meaning under IFRS. In evaluating these measures, investors should consider that the methodology applied in calculating as such measures may differ among companies and analysts. Below is a reconciliation of "EBITDA" to net income for the periods presented:

										Cumulative
EBITDA Reconciliation		2011		2012		2013		2014 - Q1		2011 - 2014 Q1
		$		$		$		$		$
Net Income before tax		2,802		2,321		3,236		410		8,769
Interest and debt costs		338		160		33		18		549
Stock-based compensation		113		53		12		3		181
Amortization of intangible assets		1,056		850		556		295		2,757
Depreciation of property and equipment		517		120		127		74		838
Gain on retirement of debt		-		(260)		-		0		(260)
Mark to fair value of common share warrants		(2,290)		(1)		-		0		(2,291)
EBITDA (Cash Profits)		2,536		3,243		3,964		800		10,543