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Press release from Marketwire

Phonetime Reports Financial Results for the Six Months Ended June 30th, 2013

Monday, July 29, 2013

Phonetime Reports Financial Results for the Six Months Ended June 30th, 2013

16:31 EDT Monday, July 29, 2013

TORONTO, ONTARIO--(Marketwired - July 29, 2013) - Phonetime Inc. (TSX:PHD) announced today 2nd quarter results for 2013. Revenue for the quarter ended June 30th, 2013 was $39.8 million compared to $24.5 million in 2012, an increase of 62% year over year. For the six months ended June 30th, 2013 revenue was $73.8 Million compared to $48.2 million, an increase of 53% year over year. Net income for the six months ended was $1.2 million compared to $0.6 Million in 2012. At June 30th, 2013, Phonetime had cash reserves of $2.7 million and available borrowings of an additional $2.5 million. Phonetime assets were $24.8 million and shareholder's equity was $12.4 million.

"In 2012, the Board of directors promoted Mike Vazquez to the position of President and COO of Phonetime Inc. and made a number of changes within our sales organization. Mike, together with his team have done a great job accelerating our progress, inspiring our customers and vendors to trust their procurement of communication services to Phonetime." said Gary Clifford, Executive Chairman and CEO. "In 2013, we anticipate continued revenue growth in our core business. We also expect to organically expand our service footprint whilst continuing to review investment, acquisition and merger opportunities. In order to accomplish these initiatives we may issue equity and or debt in 2013."

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

About Phonetime Inc.

Established in 1994, Phonetime is a leading provider of international and domestic switched voice services to the worlds telecommunication operators and voice service providers. Phonetime's customers and suppliers include, fixed line operators, mobile operators, retail and VoIP service providers, who buy and sell voice and IP telecommunications services. Phonetime has traders in Europe, Asia and the Americas using its proprietary trading platform with embedded intelligence, which includes profitability benchmarking, call routing, credit management, network quality visibility and loss prevention. As voice technology evolves Phonetime has commoditized its trading philosophy and along with its platform is positioned to emerge as a leading clearing house. Phonetime is a public company listed on the Toronto Stock Exchange (TSX).

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 which contains all securities files.

Phonetime Inc.
[amounts in thousands of U.S. dollars, except per share information]
For the three and six months ended June 30
2013 2012 2013 2012
$ $ $ $
Unaudited Unaudited Unaudited Unaudited
Revenue 39,792 24,542 73,842 48,185
Cost of revenue 37,403 22,798 69,833 44,532
Gross margin 2,389 1,744 4,009 3,653
Operating expenses 1,037 1,094 1,913 2,366
Depreciation of property and equipment 32 189 62 376
Amortization of intangible assets 103 235 209 636
Stock-based compensation 13 11 26 23
Interest and debt costs 4 37 16 104
Gain on retirement of debt - (6 ) - (261 )
Mark to fair value of common share warrants - (1 ) - (1 )
1,189 1,559 2,226 3,243
Income before income taxes 1,200 185 1,783 410
Provision for (recovery of) income taxes
Current - 5 - 10
Deferred 396 (100 ) 575 (200 )
396 (95 ) 575 (190 )
Net and comprehensive income for the period 804 280 1,208 600
Phonetime Inc.
[amounts in thousands of U.S. dollars]
As at
June 30, December 31,
2013 2012
$ $
Unaudited Unaudited
Cash and cash equivalents 2,739 2,288
Accounts receivable, net 10,181 7,397
Prepaid expenses and other assets 689 215
Total current assets 13,609 9,900
Deferred tax assets - 690
Property and equipment, net 623 454
Intangible assets, net 432 621
Goodwill 10,128 10,128
24,792 21,794
Bank indebtedness - -
Accounts payable 5,339 3,774
Accrued liabilities 6,896 6,577
Income taxes payable 32 32
Total current liabilities 12,267 10,383
Deferred tax liabilities 135 255
Total liabilities 12,402 10,638
Shareholders' equity
Common shares 12,444 12,444
Contributed surplus 2,843 2,817
Deficit (2,897 ) (4,105 )
Total shareholders' equity 12,390 11,156
24,792 21,794


Contact Information:
Gary Clifford
Phonetime Inc.
Executive Chairman & CEO

Michael Vazquez
Phonetime Inc.
President and COO

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