MISSISSAUGA, ON – Higher sales volumes in Phonetime Inc.’s wholesale division helped push consolidated revenue for the long distance telecom provider up 5% year-over-year.
For the second quarter ended June 30, 2009, consolidated revenue was $41.3 million, compared to $39.3 million for the same quarter in 2008. For the six month period of 2009, revenue was up 11% to $83.9 million from $75.8 million for the same period of 2008.
"We are very pleased with our Q2 results given recent economic conditions," said president and CEO Wayne Silver, in the press release. "In a challenging period for our industry, we continue to attract new carriers to our network quarter-over-quarter, grow market share and expand our operations – all with a customer base that is financially solid."
The company’s wholesale division buys and resells telecommunications long-distance services to telephone carriers around the world using a call trading platform. Phonetime also generates revenues through its consumer division which provides pre-paid calling cards and long-distance services to targeted ethnic consumer groups across Canada. It currently has more than 125,000 customers using its long-distance retail services.
Gross profit for the second quarter of 2009 was $5.1 million or 12.3% of sales, compared to $5.2 million or 13.2% of sales for the second quarter of 2008. The year-over-year decrease, which chiefly impacted its high margin consumer division, was due to higher cost of sales as a result of a decline in the value of the Canadian currency against the U.S. dollar. On a year-to-date basis, gross profit for 2009 was $10.9 million, up slightly compared to $10.1 million for 2008.
Operating income for the quarter was $0.9 million, down from $1.0 million for the first quarter of 2009, and $1.9 million for 2008. Year-to-date operating income for 2009 was $2.0 million, compared to $3.5 million for 2008.
Net income was flat at $0.2 million for Q2 2009, the same as Q1, but down from $0.7 million for Q2 2008. Year-to-date net income for 2009 was $0.4 million compared to $1.4 million for 2008.
Phonetime said that it anticipates a “modest rate” of growth through 2009, and expects to restructure and consolidate its debt with its financial partners in its third quarter.
