Telehop Communications Reports Second Quarter 2010 Financial Results

TORONTO, Aug. 16 /CNW/ - Telehop Communications Inc. (TSXV-HOP) is a full-service long distance provider operating within the telecommunications industry and is registered with the Canadian Radio-television and Telecommunications Commission ("CRTC") as a licensed Class "A" Telecom Carrier.

    
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    Consolidated Highlights           three months ended    six months ended
    ($ Thousands except                June 30,  June 30,  June 30,  June 30,
     for per share data)                  2010      2009      2010      2009
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    Consolidated Income Statement
    -------------------------------

    Operating revenues                   3,060     3,562     5,982     7,039

    Gross margin                         1,302     1,463     2,493     2,766
    Gross margin %                       42.5%     41.1%     41.7%     39.3%

    EBITDA                                  24      (169)      (54)     (551)

    Net income (loss)                      (62)     (243)     (170)     (574)

    Earnings (loss) per share - basic     0.00     (0.02)    (0.01)    (0.04)

    Earnings (loss) per share - diluted   0.00     (0.02)    (0.01)    (0.04)
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The second quarter showed improved results with a positive EBITDA and an increase in working capital for the quarter. Fulvio Ciano, Chief Executive officer stated, "We have more work to do, but I am very encouraged by the improved second quarter results and the prospects for our Company's continuing progress in 2010".

Quarterly financial summary

Revenue for second quarter 2010 was $3,060,274 with a net loss of $62,318 or $0.00 per common share compared to revenue of $3,562,090 and net loss of $242,903 or $0.02 per common share for the second quarter 2009. Our revenue was $501,816 or 14.1% less quarter for quarter which is attributable to a reduction in our retail long-distance business of $423,521 and a reduction in our wholesale long-distance business of $78,295. Year to date revenue was $5,982,019 with a net loss of $169,701 or $0.01 per common share compared to revenue of $7,039,243 and net loss of $573,607 or $0.04 per common share for the first six months of 2009.

Our gross margin for the second quarter was $1,302,183 or 42.5% compared to $1,462,647 or 41.1% for the same quarter in 2009. This improvement is attributable to concentrating our marketing efforts on higher margin niche markets. Year to date margin has shown a 2.4% increase to 41.7% over 2009.

Operating expenses decreased from $1,723,791 in second quarter 2009 by $363,338 or 21.1% to $1,360,453. The majority of the decrease relates to a more focused marketing strategy. Six month operating expenses decreased by $794,805 or 22.7% to $2,702,806.

We completed the second quarter with $528,781 of cash and working capital of $996,908 with no bank debt. We have reduced our expenses on an ongoing basis and have implemented a strategic initiative which we believe will help us increase the value of our Company in the long term.

A complete financial reporting package is available on Sedar http://www.sedar.com or by contacting the company.

Certain statements in this press release may constitute "forward looking statements" and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any performance or achievement expressed or implied by such "forward looking statements".

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release

%SEDAR: 00004365E

SOURCE Telehop Communications Inc.

For further information: For further information: Company Contact: Mr. Fulvio Ciano, CEO, (416) 494 4490, fciano@telehop.com

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Telehop Communications Inc.

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