XFONE Reports Record Revenue for Fiscal Year 2004 and Marks Fifth
Consecutive Year of Growth and Profitability New U.S. and Israeli
Subsidiaries Expected to Contribute Measurably to 2005 Growth; 2005
Expected to Be Yet Another Record Year LONDON, April 1
/PRNewswire-FirstCall/ -- XFONE, Inc. (OTC:XFNE) (BULLETIN BOARD:
XFNE) ("XFONE" or "the Company"), a provider of international voice
and data communications services, announced that late yesterday
afternoon it filed its annual report on Form 10K-SB with the U.S.
Securities and Exchange Commission reflecting financial results for
the fiscal year ended December 31, 2004. Fiscal Year 2004 Financial
Highlights (translated into U.S. dollars for convenience): *
Revenues increased 55% to (pound)11,330,116 (US$21,867,124) from
(pound)7,282,181 (US$14,054,609). * Due largely to expenses
associated with the acquisition of eXpeTel in Jackson, Mississippi,
and the build-out of the Company's new "018" international long
distance operations in Israel, net income declined to (pound)39,874
(US$76,957) from (pound)421,445 (US$813,389). 2004 marked the fifth
consecutive year of net profitability for XFONE, Inc. * Diluted
earnings per share in 2004 were (pound)0.005 (US$0.009) compared to
(pound)0.08 (US$0.154) in 2003. As of December 31, 2004, the
Company had approximately (pound)3 million (US$5.9 million) in cash
and accounts receivables and stockholders' equity of approximately
(pound)2.2 million (US$4.3 million). Operational Highlights for
2004: * XFONE initiated its international expansion strategy,
successfully expanding operations from the United Kingdom into both
the United States and Israel. Currently, the Company serves
customers located in 75 countries across Europe, Australia, North
America, South America, Asia and Africa. * The Company entered the
world's largest telecommunications market -- the United States --
when it negotiated the acquisition of eXpeTel Communications, a
licensed telecom service provider based in Jackson, Mississippi. On
March 10, 2005, the Company consummated the acquisition of and
officially merged eXpeTel into its wholly owned U.S. subsidiary,
XFONE USA, Inc. * In December 2004, XFONE successfully launched its
international carrier business in Israel's growing
telecommunications market through its majority owned subsidiary,
XFONE Communication Ltd., which recently changed its name in March
2005 to XFONE 018 Ltd. Following only two and half months of
operations, XFONE 018 reported that it was on pace to exceed three
million call minutes per month and had logged approximately 30,000
registered and unregistered new customers. * XFONE's United Kingdom
telecommunications operations, Swiftnet Ltd., the largest
contributor to the Company's revenues during 2004, continued to
produce strong financial results, achieving 35% year-over-year
revenue growth. Guy Nissenson, Company President and Chief
Executive Officer, stated, "Without question, 2004 was a defining
year for XFONE, one characterized by international expansion and
thoughtful execution of several key growth strategies. As a result
of our success in establishing operations in three competitive and
active user markets of telecommunications services -- the United
Kingdom, the United States and Israel -- XFONE is firmly poised to
deliver our sixth consecutive year of growth and profitability.
Therefore, based on our current revenue run rate and without giving
consideration to possible future acquisitions, I'm pleased to
confirm that we remain confident that our financial performance in
2005 will reflect yet another year of record-breaking
achievements." XFONE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT
OF OPERATIONS (Audited) Years Ended Years Ended December 31,
December 31, 2004 2003 2004 2003 In pounds Convenience translation
into U.S.$ Revenues 11,330,116 7,282,181 $21,867,124 $14,054,609
Cost of revenues (7,991,375) (4,468,420) (15,423,354) (8,624,051)
Gross profit 3,338,741 2,813,761 6,443,770 5,430,559 Operating
expenses: Research and development (25,945) (44,553) (50,074)
(85,987) Marketing and selling (1,626,288) (1,091,012) (3,138,736)
(2,105,653) General and administrative (1,573,726) (1,011,829)
(3,037,291) (1,952,830) Total operating expenses (3,225,959)
(2,147,394) (6,226,101) (4,144,470) Operating profit 112,782
666,367 217,669 1,286,088 Financing expenses -- net (83,403)
(44,283) (160,968) (85,466) Other income 21,128 15,817 40,777
30,527 Income before taxes 50,507 637,901 97,479 1,231,149 Equity
in income of affiliated co. 20,885 -- 40,308 -- Income before taxes
71,392 637,901 137,787 1,231,149 Taxes on income (31,518) (216,456)
(60,830) (417,760) Net income 39,874 421,445 $76,957 $813,389
Earnings Per Share: Basic 0.007 0.080 $0.013 $0.154 Diluted 0.005
0.080 $0.009 $0.154 About XFONE, Inc. A U.S.-domiciled corporation,
XFONE is an international voice and data communications services
provider with operations in the United Kingdom, the United States
and Israel, and offers a wide range of services which include:
international and long distance telephone services, prepaid calling
cards; cellular services; VoIP services; reselling opportunities;
and email and fax broadcasting services. The Company serves
customers in 75 countries across Europe, Australia, North America,
South America, Asia and Africa. Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995: All information
set forth in this news release, except historical and factual
information, represents forward-looking statements. This includes
all statements about the company's plans, beliefs, estimates and
expectations. These statements are based on current estimates and
projections, which involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties include
issues related to the ability to: rapidly change technology and
evolving standards in the industries in which the Company and its
subsidiaries operate; obtain sufficient funding to continue
operations; maintain adequate cash flow; profitably exploit new
business; license and sign new agreements; and the unpredictable
nature of consumer preferences; and other factors set forth in the
Company's most recently filed annual report and registration
statement. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date hereof.
Readers should carefully review the risks and uncertainties
described in other documents that the Company files from time to
time with the Securities and Exchange Commission, including the
Registration Statement effective on November 12, 2004. FOR MORE
INFORMATION, PLEASE CONTACT Stephanie Noiseux, Elite Financial
Communications Group 407-585-1080 or via email at DATASOURCE:
XFONE, Inc. CONTACT: Stephanie Noiseux, Elite Financial
Communications Group, +1-407-585-1080, or , for XFONE, Inc. Web
site: http://www.xfone.com/
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