Telehop Reports Q2, and Six Months to June 30, 2007 Results - Net earnings of $0.04 per share for the six-month period



    TSX VENTURE SYMBOL: HOP

    TORONTO, Aug. 29 /CNW/ - Telehop Communications Inc. ("Telehop")(TSX
V-HOP) today released its financial results for the second quarter of 2007 and
for the six months ended June 30, 2007, which showed earnings of $0.04 per
share and a further strengthening of its working capital and cash position on
the balance sheet.
    Telehop's revenue for the six months ended June 30, 2007 of $9,586,760
represented a decrease of approximately 5.7% over revenues of $10,167,470 for
the same period in 2006. Total operating expenses as a percentage of revenues
for the six months ended June 30, 2007 remained consistent at 92% compared to
92% for the same period in 2006. Net income for the six months ended June 30,
2007 was $451,814 ($0.04 per share) compared to $483,785 ($0.04 per share) for
the same period in 2006.
    Revenues for the second quarter ended June 30, 2007 were $4,594,460 a
decrease of 10.4% compared with $5,130,358 in the comparable quarter in 2006.
Total operating expenses as a percentage of revenues for the second quarter
ended June 30, 2007 improved to 91% from 93% for the same period in 2006. Net
income for the second quarter was $255,499 ($0.02 per share) compared to
$220,882 ($0.02 per share) in the quarter ended June 30, 2006.
    The Company maintains its strength in its balance sheet, and working
capital at June 30, 2007 increased 15.2% to $3,603,103 from $3,126,904 at
December 31, 2006. Telehop's cash and equivalents at June 30, 2007 improved to
$2,924,751 from $2,778,664 at December 31, 2006, after paying out its first
cash dividend in January 2007. Telehop's operations continue to be entirely
funded by cash flow from operations, and the company has no outstanding bank
or other debt.
    Ruth Bartholomeusz, President and COO of Telehop stated: "In the first
half of 2007, we were able to continue to generate stable earnings and have
continued to strengthen our working capital position. As we announced
recently, we are actively evaluating alternatives for the Company, which could
involve mergers and/or acquisitions with other entities in order to improve
the business and shareholder value. We will, however, continue to build our
subscriber base and focus on the development of innovative solutions."

    About Telehop Communications Inc.

    Telehop is licensed by the CRTC and provides a complete range of
value-priced telecommunications services to Canadians in both residential &
business markets Telehop offers its branded 10-10-620 and the 10-10-100, Dial
Around Services and "WorldTalk(TM)" 'Equal Access' Long Distance and
alternative Directory Assistance Programs. Telehop also provides toll free
numbers, Virtual Calling Cards, and "Broadtalk(TM)" VOIP flat rate service.
    For more information on Telehop's products and services check our
websites; - www.telehop.com; www.myworldtalk.com; www.1010100.com;
www.1010620.com; and www.broadtalk.ca

    
    Shares Outstanding; -  12,803,500
    Fully Diluted; -       13,618,500

    More information on Telehop (HOP-TSX Venture) may be obtained at
    http://www.sedar.com
    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 Interim Balance Sheets

    -------------------------------------------------------------------------
                                            June 30, 2007  December 31, 2006
    -------------------------------------------------------------------------
    ASSETS                                     (Unaudited)          (Audited)

    CURRENT
      Cash and cash equivalents               $ 2,924,751        $ 2,778,664
      Accounts receivable                       2,842,582          3,319,359
      Income taxes recoverable                    177,144                  -
      Prepaid expenses and deposits                78,915            236,881
    -------------------------------------------------------------------------
                                                6,023,392          6,334,904

    PROPERTY, PLANT AND EQUIPMENT                 782,196            809,543

    INTANGIBLES                                   323,143            358,328

    -------------------------------------------------------------------------
                                              $ 7,128,731        $ 7,502,775
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES

    CURRENT
      Accounts payable and accrued
       liabilities                            $ 2,420,289        $ 2,989,398
      Income taxes payable                              -            218,602
    -------------------------------------------------------------------------
                                                2,420,289          3,208,000

    FUTURE INCOME TAX LIABILITY                    50,201             69,050

    -------------------------------------------------------------------------
                                                2,470,490          3,277,050
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY

    SHARE CAPITAL                               1,304,953          1,277,968
    CONTRIBUTED SURPLUS                           127,978            174,261
    RETAINED EARNINGS                           3,225,310          2,773,496
    -------------------------------------------------------------------------
                                                4,658,241          4,225,725
    -------------------------------------------------------------------------

                                              $ 7,128,731        $ 7,502,775
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TELEHOP COMMUNICATIONS INC.
    Consolidated Interim Statements of Income and Comprehensive Income
    Unaudited
    -------------------------------------------------------------------------
                               Three months ended         Six months ended
                              June 30,     June 30,     June 30,     June 30,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                                              (Not                      (Not
                                          reviewed)                 reviewed)

    Revenue               $ 4,594,460  $ 5,130,358  $ 9,586,760  $10,167,470
    -------------------------------------------------------------------------

    Expenses
      Telecommunication
       costs                2,686,740    2,894,013    5,615,462    5,696,667
      General and
       administration         772,467      719,793    1,524,654    1,513,043
      Marketing and
       selling                557,441      843,236    1,167,536    1,577,277
      Development and
       technical support       44,677      224,379      287,644      401,854
      Depreciation and
       amortization           120,895       84,993      235,488      206,588
      Interest expense         14,030          397       14,108        1,097
    -------------------------------------------------------------------------
                            4,196,250    4,766,811    8,844,892    9,396,526
    -------------------------------------------------------------------------

    Income before
     income taxes             398,210      363,547      741,868      770,944
    Income tax expense        142,711      142,665      290,054      287,159
    -------------------------------------------------------------------------
    Net income for
     the period           $   255,499  $   220,882  $   451,814  $   483,785
    Other Comprehensive
     Income                         -            -            -            -
    -------------------------------------------------------------------------
    Comprehensive Income  $   255,499  $   220,882  $   451,814  $   483,785
    -------------------------------------------------------------------------

    Earnings per share
    Basic                 $      0.02  $      0.02  $      0.04  $      0.04
    Diluted               $      0.02  $      0.02  $      0.03  $      0.04
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TELEHOP COMMUNICATIONS INC.
    Consolidated Interim Statements of Retained Earnings
    Unaudited
    -------------------------------------------------------------------------
                                                    For the Six months ended
                                                        June 30,     June 30,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                                        (Not
                                                                    Reviewed)

    Balance at beginning of period                  $ 2,773,496  $ 1,876,349

    Income for the period                               451,814      483,785
    -------------------------------------------------------------------------
    Balance end of period                           $ 3,225,310  $ 2,360,134
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    TELEHOP COMMUNICATIONS INC.
    Consolidated Interim Statements of Cash Flows
    Unaudited
    -------------------------------------------------------------------------

                               Three months ended         Six months ended
                              June 30,     June 30,     June 30,     June 30,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
                                              (Not                      (Not
                                          Reviewed)                 Reviewed)
    CASH FLOW PROVIDED BY
     (USED FOR)

    Operating activities
      Net income for
       the period         $   255,499  $   220,882  $   451,814  $   483,785
      Adjustments for
       non-cash items:
        Amortization
         expense              120,895       84,993      235,488      206,588
        Future income
         taxes                 (9,149)       7,242      (18,849)      (3,075)
        Stock-based
         compensation         (48,815)           -      (39,298)           -
    -------------------------------------------------------------------------
                              318,430      313,117      629,155      687,298

      Changes in working
       capital items:
        Accounts
         receivable              (677)    (155,298)     476,777      216,169
        Prepaid expenses       98,158      (71,894)     157,966      (53,427)
        Accounts payable
         and accrued
         liabilities          151,182     (719,980)    (569,109)     767,063
        Income taxes         (213,651)    (220,898)    (395,746)     (66,088)
    -------------------------------------------------------------------------
    Cash provided by
     (used for) operating
     activities               353,442     (854,953)     299,043    1,551,015
    -------------------------------------------------------------------------

    Investing activities
      Acquisition of
       property, plant
       and equipment         (110,034)     (26,985)    (137,518)    (159,463)
      Acquisitions of
       intangible assets      (13,199)     (44,698)     (35,438)     (44,698)
    -------------------------------------------------------------------------
    Cash used for
     investing activities    (123,233)     (71,683)    (172,956)    (204,161)
    -------------------------------------------------------------------------

    Financing activities
      Repayment of
       obligations under
       capital lease                -       (2,916)           -       (5,743)
      Issuance of common
       shares                       -       10,000       20,000       10,000
    -------------------------------------------------------------------------
    Cash provided by
     financing activities           -        7,084       20,000
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash                  230,209     (919,552)     146,087    1,351,111

    Cash, beginning
     of period              2,694,542    3,103,398    2,778,664      832,735
    -------------------------------------------------------------------------
    Cash, end of period   $ 2,924,751  $ 2,183,846  $ 2,924,751  $ 2,183,846
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary Information
    -------------------------
    Interest received          30,899       22,053       65,750       39,241
    Income taxes paid         178,768      372,725      542,896      372,725

    

    %SEDAR: 00004365E




For further information:

For further information: Telehop Communications Inc., Ruth
Bartholomeusz, President & COO, (416) 494-4490, 1-888-846-7654,
http://www.telehop.com/

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Telehop Communications Inc.

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