Tellza Communications Inc.
TSX : TEL

Tellza Communications Inc.

July 25, 2014 17:01 ET

Tellza Announces 2014 Q2 Financial Results

Revenue for the six months ended June 30th climbs to $124M USD

An increase of 68% year over year

TORONTO, ONTARIO--(Marketwired - July 25, 2014) - Tellza Communications Inc. (TSX:TEL) announced its unaudited financial results for the six months ended June 30, 2014.

Revenue was $124 Million USD compared to $74.0 Million USD in Q2 of 2013, representing growth of 68%. Net Income was $0.5 million USD, compared to net income of $1.2 million USD in Q2 of 2013. Year to date EBITDA* in 2014 was $1.5 million USD compared to $2.1 million USD in Q2 of 2013, a decrease of 29%. The reduction in EBITDA is related to tighter margins in our core business, start-up costs related to routedynamix and acquisition costs related to the MatchcoM acquisition which was completed in February 2014.

CONSOLIDATED STATEMENTS OF OPERATIONS
[amounts in thousands of U.S. dollars, except per share information]
For the three and six months end June 30th, 2014 2013 2014 2013
$ $ $ $
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue 72,766 39,792 124,132 73,842
Cost of revenue 70,730 37,403 120,006 69,833
Gross margin 2,036 2,389 4,126 4,009
Operating expenses 1,363 1,037 2,653 1,913
Depreciation of property and equipment 73 32 147 62
Amortization of intangible assets 280 103 575 209
Stock-based compensation 3 13 6 26
Minority Interest 16 - 16 -
Interest and debt costs -18 4 0 16
1,717 1,189 3,397 2,226
Income before income taxes 319 1,200 729 1,783
Provision for (recovery of) income taxes
Current - - - -
Deferred 115 396 235 575
115 396 235 575
Net and comprehensive income for the period 204 804 494 1,208
Earnings per share
- basic and diluted 0.00 0.01 0.00 0.01
Weighted-average number of common shares
- basic and diluted 187,713,991 151,231,492 186,300,822 151,231,492

Tellza completed Q2 - 2014 with $2 Million USD in cash and available borrowings of $3.6 Million. Since 2011, Tellza has generated $11.2 Million USD in Cash Profits* that have been utilized as set out in the following table: http://media3.marketwire.com/docs/TEL%20Tables.pdf

"We are excited with our progress in 2014, despite narrowing margins," said Gary Clifford, Executive Chairman. "We expect profits to grow in the second half of the year, as routedynamix (SMS platform) commercializes and we complete the migration of our networks across all of our portfolio businesses."

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:

YTD Cumulative
EBITDA Reconciliation 2011 2012 2013 2014 - Q2 2011 - 2014 Q2
$ $ $ $ $
Net Income before tax 2,802 2,321 3,236 729 9,088
Interest and debt costs 338 160 33 0 531
Stock-based compensation 113 53 12 6 184
Amortization of intangible assets 1,056 850 556 575 3,037
Depreciation of property and equipment 517 120 127 147 911
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 1,457 11,200

Contact Information

  • Tellza Communications Inc.
    Gary Clifford
    Executive Chairman & CEO
    +647 281 1831
    gclifford@tellza.com

    Tellza Communications Inc.
    Michael Vazquez
    President
    +954-608-5058
    mike@tellza.com