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:
Gary Clifford
Executive Chairman & CEO
+647 281 1831
gclifford@tellza.com
Tellza Communications Inc.
Michael Vazquez
President
+954-608-5058
mike@tellza.com