Telehop Communications Reports Third Quarter 2011 Financial Results

TORONTO, Nov. 22, 2011 /CNW/ - Telehop Communications Inc. (TSXV:HOP) is a fullservice 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.

The first nine months of 2011 have seen significant changes and improvements which will better position the company to move forward:

  • Management changed in April, bringing a new brand of leadership focused on marketing and operational improvements,

  • Shareholders ratified the Company's direction during its AGM in May of this year,

  • 25% Rights issuance was fully subscribed raising additional capital in late September,

Subsequent to the period end:

  • Purchase agreement with a major Telecommunications company to replace the Company's existing and aging switch technology amounting to approximately $450,000. The new switch will provide "carrier-grade" technology to enhance the quality of the Company's existing services,

  • Three-year leasing agreement with a major Telecommunications company to house the new switch and enhance the Company's existing network infrastructure.

In order to ensure minimum impact to customer experience, it is necessary that the Company runs a duplicate network nationwide during implementation of the new switch. This will result in additional fourth quarter expenses amounting to approximately $90,000. The completion date for the new switch project is expected to be in the first quarter of 2012.

Consolidated Highlights Three months ended Nine months ended
($000 CAD, except for EPS)   Sept. 30, 2011   Sept. 30, 2010   Sept. 30, 2011   Sept. 30, 2010
Consolidated Income Statement          
Operating revenues $ 2,701 $ 2,907 $ 8,019 $ 8,889
         
Gross margin 1,206 1,282 3,518 3,775
Gross margin % 44.7% 44.1% 43.9% 42.5%
         
Operating income (loss) $ (124) $ 25 $ (506) $ (186)
EBITDA (83) 97 (374) 46
Net income (loss) (76) 13 (384) (158)
Earnings (loss) per share - basic (0.01) 0.00 (0.03) (0.01)

With new management engaged, and moving into the fourth quarter and beyond, the Company's focus will be to continue to grow and drive sales of subscription services, namely:; Long Distance, VoIP Phone, and High Speed Internet. The marketing strategy will focus on aggressively expanding the Company's network of agents to move into new market segments. Furthermore, the company will continue to focus on the Research & Development of new products and services for launch in early 2012.

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

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

SOURCE Telehop Communications Inc.

For further information:

Company Contact:
Mr. Rajiv Jagota
President and CEO
(416) 494 4490
rjagota@telehop.com

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Telehop Communications Inc.

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