Revenues of $21.2 million and Net Earnings of $1,024,182 ($0.08/sh)
TSX VENTURE SYMBOL: HOP
TORONTO, April 27 /CNW/ - Telehop Communications Inc.
("Telehop")(TSXV-HOP) today released its financial results for the fourth
quarter and for the year ended December 31, 2006 with net earnings of
$1,024,182 ($0.08 per share) for 2006, compared with earnings of $611,065
($0.05) for the previous year. Telehop also declared and paid out its first
dividend of $0.01 per share to shareholders of record on December 31, 2006.
Telehop's revenues for the fourth quarter ended December 31, 2006 were
$5,562,250, up from $5,464,998 in the comparable quarter of 2005. Net income
for the fourth quarter was $253,762 ($0.02 per share) versus $402,109 ($0.03
per share) in the quarter ended December 31, 2005, while EBITDA was $463,010
versus $751,596 for the same period in the prior year.
Telehop's revenue for the year ended December 31, 2006 was $21,181,302
compared with $20,770,191 in 2005. Net income for the year ended December 31,
2006 was $1,024,182 ($0.08 per share) versus $611,065 ($0.05 per share) in
2005. EBITDA for the year increased to $1,998,008 in 2006 versus $1,400,214 in
2005.
The Company continues to demonstrate ongoing strength in its balance
sheet and elected to return some cash to its shareholders by way of paying a
dividend. Its operations are entirely funded by cash flow from operations, and
Telehop has no outstanding bank debt or capital leases. Telehop's cash
position at December 31, 2006 increased to $2,778,664 compared with $832,735
at December 31, 2005. Telehop's working capital increased to $3,126,904 at
December 31, 2006 versus $2,119,119 at December 31, 2005, whilst Shareholder's
Equity increased to $4,225,725 from $3,231,587 over the same period.
Because the company is financed entirely by equity and retained earnings,
Telehop was successful in increasing its return on average equity to 27.5% in
2006, up from 20.9% in 2005.
On an operational level, Telehop has been very successful in increasing
the traffic processed through its network. For the year ended December 31,
2006 the company processed 376,620,233 minutes in 91,468,706 calls, versus
326,190,091 minutes in 64,966,898 calls in 2005, an increase of 15.5% in the
number of minutes and 40.8% in the number of calls respectively.
Ruth Bartholomeusz, President and COO of Telehop stated: "We are pleased
to state that we met our objectives of improving our cost efficiencies and
delivering value to our shareholders by focusing on consolidation and
profitability. The growth in subscribers, traffic and revenues was a result of
aggressive marketing and sales efforts by our staff and also the increasing
acceptance of the quality and the value of our services by our customers. In
December 2006 we phased out our original Ontario HOP network business and
offered a wider range of new services at a comparable price to these
subscribers. Telehop continues to evaluate new technologies and applications
that would enable us to continue to upgrade our service offerings to our
customers."
"I am also pleased to report that the success achieved in 2006 allowed
Telehop to pay its first ever dividend of $0.01 per share to our shareholders.
It is our current intention to continue the focus on profitability and growth
to maximize value for our shareholders."
About Telehop Communications Inc.
Telehop is a CRTC Licensed Class "A" Telecom Carrier, and one of the
largest alternative telecom providers to the residential & business market.
Telehop offers origination and termination services to other carriers
worldwide, including switchless resellers, and provides 'Equal Access' Long
Distance and the branded "10-10-620" and the "10-10-100"- 'Dial Around'
Service, and alternative Directory Assistance Programs. It also provides 1-800
toll free numbers and Virtual Calling Cards, allowing calls from any phone in
North America to anywhere in the world. Telehop also offers the branded
"Broadtalk(TM)" VOIP flat rate service to residential and small business
customers.At December 31, 2006
Shares Outstanding;- 12,703,500
Fully Diluted;- 13,818,500
More investor information on Telehop (HOP-TSX Venture) may be obtained at
http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00004365
or by calling Patrick V. Farrell at (416) 494 4490 ext 399,
or 1-866-530 7988 or e-mail pfarrell@telehop.com.
TELEHOP COMMUNICATIONS INC.
Consolidated Balance Sheets
December 31, 2006 and 2005
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2006 2005
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ASSETS
CURRENT
Cash and cash equivalents $ 2,778,664 $ 832,735
Accounts receivable (net of allowance
for doubtful accounts of $13,899;
$62,247 in 2005) 3,319,359 3,156,492
Prepaid expenses and deposits 236,881 61,851
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6,334,904 4,051,078
PROPERTY, PLANT AND EQUIPMENT 809,543 854,430
INTANGIBLES 358,328 327,245
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$ 7,502,775 $ 5,232,753
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 3,020,690 $ 1,884,722
Income taxes payable 187,310 32,874
Obligations under capital lease - 14,363
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3,208,000 1,931,959
FUTURE INCOME TAX LIABILITY 69,050 69,207
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3,277,050 2,001,166
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SHAREHOLDERS' EQUITY
CAPITAL STOCK 1,277,968 1,200,419
CONTRIBUTED SURPLUS 174,261 154,819
RETAINED EARNINGS 2,773,496 1,876,349
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4,225,725 3,231,587
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$ 7,502,775 $ 5,232,753
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TELEHOP COMMUNICATIONS INC.
Consolidated Statements of Income
Years ended December 31, 2006 and 2005
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2006 2005
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REVENUE $ 21,181,302 $ 20,770,191
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EXPENSES
Telecom costs 11,749,483 12,082,369
General and administration 3,110,327 3,153,637
Marketing and selling 3,478,640 3,537,118
Development and technical support 844,844 596,853
Amortization expense 420,548 419,522
Interest expense 11,727 2,545
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19,615,569 19,792,044
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INCOME BEFORE INCOME TAXES 1,565,733 978,147
INCOME TAX EXPENSE 541,551 367,082
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NET INCOME FOR THE YEAR 1,024,182 611,065
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EARNINGS PER SHARE $ 0.08 $ 0.05
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DILUTED EARNINGS PER SHARE $ 0.08 $ 0.05
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TELEHOP COMMUNICATIONS INC.
Consolidated Statements of Retained Earnings
Years ended December 31, 2006 and 2005
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2006 2005
-------------- --------------
Balance at beginning of year $ 1,876,349 $ 1,265,284
Income for the year 1,024,182 611,065
Dividend declared (127,035) -
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Balance end of year $ 2,773,496 $ 1,876,349
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TELEHOP COMMUNICATIONS INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2006 and 2005
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2006 2005
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CASH FLOW PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Net income for the year $ 1,024,182 $ 611,065
Adjustments for non-cash items:
Amortization expense 420,548 419,522
Future income tax liability (157) (7,836)
Stock compensation 43,692 14,901
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1,488,265 1,037,652
Changes in working capital items:
Accounts receivable (162,867) (614,983)
Prepaid expenses and deposits (175,030) 42,814
Accounts payable and accrued
liabilities 1,008,933 (598,560)
Income taxes payable 154,436 188,114
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Cash provided by operating activities 2,313,737 55,037
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INVESTING ACTIVITIES
Acquisitions of property, plant and
equipment (353,081) (469,847)
Acquisition of intangibles (53,664) -
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Cash used for investing activities (406,745) (469,847)
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FINANCING ACTIVITIES
Capital lease financing (14,363) (14,946)
Issuance of common shares 53,300 -
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Cash provided by (used for) financing
activities 38,937 (14,946)
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NET INCREASE (DECREASE) IN CASH POSITION 1,945,929 (429,756)
CASH POSITION, BEGINNING OF YEAR 832,735 1,262,491
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CASH POSITION, END OF YEAR $ 2,778,664 $ 832,735
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SUPPLEMENTARY DISCLOSURE OF CASHFLOW
INFORMATION
Non-cash Financing Activities
Dividend declared $ 127,035 $ -
Contributed surplus allocated to share
capital on exercise of employee stock
options during year $ 24,250 $ -
For further information: Telehop Communications Inc., Ruth
Bartholomeusz, President & Chief Operating Officer, (416) 494-4490,
1-888-846-7654; http://www.telehop.com, http://www.1010100.ca,
http://www.broadtalk.ca
