MISSISSAUGA, ON – Long distance telecom provider Phonetime Inc. reported a 60% increase in consolidated revenue for 2008, bringing its total to $157.2 million, from $97.9 million for the 12-month period of 2007.
The company said that the growth is attributable primarily to higher sales volumes of the company’s wholesale division, which buys and resells telecommunications long-distance services to telephone carriers around the world using its proprietary call trading platform.
Phonetime also generates revenues through its retail division, which provides pre-paid calling cards and long-distance services to targeted ethnic consumer groups across Canada.
Gross profit for its 2008 fiscal year ended December 31, 2008, was $20.4 million or 13% of sales, compared to $12.4 million, or 12.7% of sales for 2007. The year-over-year gross profit improvement is due to higher sales volumes experienced by both the wholesale and retail divisions, the company said in a press release.
Operating income for 2008 was $5.3 million, up 253% from $1.5 million for the 12-month period of 2007. (Ed note: Phonetime calculates operating income as income before loss on foreign exchange, misappropriation of assets, stock compensation costs, interest, taxes and depreciation and amortization, and reconciles operating income to net earnings. It may be calculated differently by other companies.)
Net income for the year was $0.4 million and included a loss of $0.2 million due to audit, legal and asset recovery activities stemming from a previously announced misappropriation of funds.
"Our 2008 results, as evidenced by our growth in revenue, operating income and net income, validated our strategy to diversify our operations and increasingly focus our efforts on wholesale activities," said Wayne Silver, president and CEO, in the release.
Looking ahead to 2009, Silver said that Phonetime is “well positioned to sustain organic growth and capitalize on strategic acquisition opportunities as they emerge."
"Since the start of 2009, we have continued to experience strong demand for our international long-distance services for both of our divisions, and have taken a number of measures to mitigate our exposure to foreign currency fluctuations as well as to limit our tax burden," Silver continued.
