- Revenue in constant currency for Q2 2009 Increased 9.3% to $11.1
Million - Revenue for Q2 2009 compared to Q1 2009 Increased 15.7%
SCHIPHOL, Netherlands, Aug. 20 /PRNewswire-FirstCall/ -- Elephant
Talk Communications, Inc. (OTC:ETAK) (BULLETIN BOARD: ETAK) , an
international telecom and multimedia content distributor
specializing in carrier grade mobile enabling platforms, announced
second quarter 2009 financial results and is providing a
shareholder update. "Management is pleased with the strategic
direction in which the Company is headed and with the strong
top-line growth we experienced for the second quarter," stated,
Steven van der Velden, CEO of Elephant Talk Communications. "During
2009 we have taken the necessary steps to ensure we are well
positioned to establish ourselves as a market leader within the
rapidly expanding international mobile/wireless software and
services sector of the telecom industry. The focus going forward
will be to acquire additional MVNO's contracts while leveraging
ValidSoft's location based services technology in order to become
the market leader in the international telecom arena. As we expand
our market presence we will continue to grow our bottom line while
allowing us to achieve our ultimate goal of increased shareholder
value. " 2009 Operational Highlights Elephant Talk's strategic
growth plan remains on target while it continues its progress as an
international telecom operator and enabler to the multimedia
industry, as well as, to capture added market share within the $30
+ billion global bank fraud market by: -- Announced revenue
guidance pertaining to contracts recently signed in the Netherlands
and Spain in excess of $6 million in the 2nd half of 2009 and over
$24 million in 2010. -- Completed a Joint Venture agreement with
ValidSoft Limited, a provider of sub-second identity verification,
fraud prevention and false positive reduction for Credit and debit
card ATM and POS (Point of Sale) transactions. -- The agreement
executed on June 17, 2009, shall remain in place for ten years. --
Revenues from ValidSoft are expected to become Elephant Talk's
highest margin business. -- Expanded relationships with T-Mobile,
Vizzavi Espana, a Vodafone Group Company and other major telecom
operators, mobile virtual network operators, banks, and government
agencies. -- The Company began the transition from fixed line
service offerings into higher margin mobile/wireless software and
service business. Second Quarter ended June 30, 2009 versus June
30, 2008 Revenue for the three months ended June 30, 2009 was
$11,311,398, a decrease of $609,892 compared to $11,921,290 for the
same period in 2008. The decrease in revenue for the 2009 period
was primarily the result of the unfavorable impact of a $1,529,535
currency exchange translation effect arising from a lower USD/Euro
exchange rate. Revenue in constant currency for the three months
ended June 30, 2009 was $11,124,476, an increase of $941,905 or
9.3% compared to the same period in 2008. The increase in revenue
was primarily attributable to the MVNO revenue that started in Q4
2008. On constant currency basis revenue for the three months ended
June 30, 2009 increased $1,508,670 or 15.7% compared to the three
months ended March 30, 2009. Our gross margin, representing net
revenue less cost of service, for the second quarter 2009 increased
to 6.1% of revenue compared to 3.0% of revenue for the first
quarter of 2009. The increase in the gross margin was primarily
attributable to the new, higher gross margin MVNO revenue stream.
Revenue (in constant currency)
------------------------------------------------- Q2 - 2008 Q2 -
2009 increase % $10,182,571 $11,124,476 $941,905 9.3% Revenue (in
constant currency)
------------------------------------------------- Q1 - 2009 Q2 -
2009 increase % $9,615,806 $11,124,476 $1,508,670 15.7% Gross
Margin (in constant currency)
------------------------------------------------- Q1 - 2009 Q2 -
2009 increase % 3.0% 6.1% 3.1% 104.9% Cost of service for the three
months ended June 30, 2009 was $10,632,204, a reduction of $941,420
compared to $11,573,624 for the same period in 2008. The decrease
in cost of service was primarily the result of the favorable impact
of a $1,480,725 currency exchange translation effect arising from a
lower USD/Euro exchange rate. In constant currency, cost of service
increased $560,489 or 5.7% compared to the same period in 2008
primarily as a result of higher levels of revenue. The improvement
in gross margin was primarily due to the Company's new business in
the MVNO/MVNE arena. Selling, general and administrative expense
for the three months ended June 30, 2009 was $1,783,795, an
increase of $119,291 compared to $1,664,504 for the same period in
2008. The Company's net loss of $2,686,687 for the three months
ended June 30, 2009 was relatively unchanged compared to that of
$2,682,693 for the same period 2008. Net Loss per share for the
second quarter 2009 was $(0.05) compared to that of $(0.16) in the
second quarter 2008 based on respectively 53.9 million and 16.7
million shares outstanding. Six Month Results Revenue for the six
months ended June 30, 2009 was $20,740,282, a decrease of
$2,938,288 compared to $23,678,570 for the six months ended June
30, 2008. The decrease in revenue for the 2009 period was primarily
the result of the unfavorable impact of a $3,030,706 currency
exchange translation effect arising from a lower USD/Euro exchange
rate. In constant currency, total revenue for the six months ended
June 30, 2009 was $20,740,282, an increase of $92,314 or 0.5%
compared to the same period in 2008. The increase in revenue was
primarily attributable to an increase in our MVNO revenue of
$2,191,538 compared to $0 in the same period in 2008. Net Loss for
the six month period ended June 30, 2009 was $4,830,905 a reduction
of approximately $400,000 compared to $5,287,698 in the same period
2008. Net Loss per share for the six month period ended June 30,
2009 was $(0.09) compared to that of $(0.40) for the same period of
2008 based on respectively 52.7 million and 16.7 million shares
outstanding. Mr. van der Velden continued, "Elephant Talk's premier
infrastructure and strategic partnerships are now fully integrated.
The Company has completed all of the necessary steps to position
itself for large scale future growth. The focus going forward will
be to acquire additional MVNO's contracts while leveraging
ValidSoft's anti fraud technology in order to become the market
leader in our sector of the international telecom arena. Elephant
Talk is well equipped to obtain significant market share in Europe,
the Middle East and Asia in the near future. These new markets will
allow us to increase our market presence, while growing the bottom
line and allow us to achieve our ultimate goal of increased
shareholder value." About Elephant Talk Communications Elephant
Talk Communications is positioning itself as an international
telecom operator and enabler to the multimedia industry by
facilitating the distribution of all forms of content as well as
mobile and fixed telecom services to global telecommunications
consumers. The Company provides traditional telecom services, media
streaming, and distribution services primarily to the
business-to-business (B2B) community within the telecommunications
market where it has a presence. The Company's global footprint as a
fully licensed carrier, supported by its propriety IN (Intelligent
Network) and Billing/CRM (Client Relationship Management) Systems,
has been designed to offer cutting-edge solutions to the
increasingly competitive global multimedia industry. Elephant
Talk's telecommunications platform eliminates the usual limitations
caused by national borders, networks, devices or media and,
therefore, enables its B2B customers to operate as independent
telecom and multimedia distribution organizations. Elephant Talk is
also a developer for mobile telecom and content distribution
solutions; and, as a Mobile Virtual Network Enabler (MVNE), the
company has positioned itself as the premier outsourcing partner
for both Mobile Network Operators (MNO's) as well as for Mobile
Virtual Network Operators (MVNO's). At the same time, Elephant Talk
assists its MNO partners to more efficiently provide a broad range
of sophisticated services to their own existing base of MVNO's.
Elephant Talk is positioning itself as the preferred MVNE partner
of the larger, global Mobile Operators and currently operates
sophisticated networks in over a dozen markets in Europe, Asia
Pacific, and the Middle East. The Company was ranked fifth on the
Orange County 2008 Deloitte Technology Fast 50. For more
information, visit: http://www.elephanttalk.com/. Forward-Looking
Statements Certain statements contained herein constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations, estimates and
projections about the Company's industry, management's beliefs and
certain assumptions made by management. Readers are cautioned that
any such forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Because such statements
involve risks and uncertainties, the actual results and performance
of the Company may differ materially from the results expressed or
implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Unless otherwise required by law,
the Company also disclaims any obligation to update its view of any
such risks or uncertainties or to announce publicly the result of
any revisions to the forward-looking statements made here; however,
readers should review carefully reports or documents the Company
files periodically with the Securities and Exchange Commission.
Contact Elephant Talk Communications, Inc. Mr. Steven van der
Velden Tel: + 31 20 653 59 16 E-mail: http://www.elephanttalk.com/
Or Alliance Advisors, LLC Mr. Thomas Walsh Tel: (212) 398-3487
E-mail: ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET June 30, December 31, 2009 2008
--------- ----------- Unaudited --------- ASSETS CURRENT ASSETS
Cash and cash equivalents $575,770 $1,656,546 Restricted cash
191,822 191,209 Accounts receivable, net of allowance for doubtful
accounts of $313,757 and $503,102 at June 30, 2009 and December 31,
2008 respectively 6,543,966 4,574,013 Prepaid expenses and other
current assets 2,042,835 1,916,967 Total Current Assets 9,354,393
8,338,735 LONG TERM DEPOSITS 296,110 310,356 PROPERTY AND
EQUIPMENT, NET 7,455,352 6,345,113 INTANGIBLE ASSETS, NET 4,189,831
4,461,869 ----------- ----------- TOTAL ASSETS $21,295,686
$19,456,073 =========== =========== LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) CURRENT LIABILITIES Overdraft $335,349 $322,903
Accounts payable and customer deposits 7,442,336 5,809,211 Deferred
revenue 218,251 220,058 Accrued expenses and other payables
1,963,422 1,890,004 Shares to be issued - 619,057 Advances from
third parties 202,935 274,762 Loans payable 881,070 881,035 Due to
related parties 4,340,497 - --------- --- Total Current Liabilities
15,383,860 10,017,030 ---------- ---------- LONG TERM DEBT 418,792
402,425 MINORITY INTEREST 185,375 191,767 STOCKHOLDERS' EQUITY
(DEFICIT) Common stock, no par value, 250,000,000 shares
authorized, 54,471,209 issued and outstanding as of June 30, 2009
compared to 50,433,260 shares issued and outstanding as of December
31, 2008 54,424,137 52,933,209 Accumulated other comprehensive
income 749,575 946,834 Accumulated deficit (49,866,053)
(45,035,192) ----------- ----------- Total Stockholders' Equity
(Deficit) 5,307,659 8,844,851 --------- --------- -----------
----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
$21,295,686 $19,456,073 =========== =========== - - ELEPHANT TALK
COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF
OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) For the Three Months
For the Six Months ended ended June 30, June 30, 2009 2008 2009
2008 =========== =========== =========== =========== REVENUES
$11,311,398 $11,921,290 $20,740,282 $23,678,570 COST AND OPERATING
EXPENSES Cost of service 10,632,204 11,573,624 19,780,001
22,986,135 Selling, general and administrative expenses 1,783,795
1,664,504 3,246,943 3,421,503 Non cash compensation to officers,
directors and employees 750,406 228,585 1,019,866 390,072
Depreciation and amortization of intangibles assets 707,763 751,725
1,337,945 1,426,181 ------- ------- --------- --------- Total cost
and operating expenses 13,874,168 14,218,438 25,384,755 28,223,891
LOSS FROM OPERATIONS (2,562,770) (2,297,148) (4,644,473)
(4,545,321) OTHER INCOME (EXPENSE) Interest income 12,237 20,710
22,307 36,463 Interest expense (136,154) (398,494) (207,939)
(769,071) Other expenses - (7,761) - (8,969) --- ------ --- ------
Total other income (expense) (123,917) (385,545) (185,632)
(741,577) LOSS BEFORE PROVISION FOR INCOME TAXES (2,686,687)
(2,682,693) (4,830,105) (5,286,898) Provision for income taxes - -
(800) (800) --- --- ---- ---- NET LOSS (2,686,687) (2,682,693)
(4,830,905) (5,287,698) Net income (loss) attributable to
noncontrolling interest (653) 30,232 (756) 59,249 ---- ------ ----
------ NET LOSS (2,687,340) (2,652,461) (4,831,661) (5,228,449)
OTHER COMPREHENSIVE (LOSS) INCOME Foreign currency translation gain
(loss) 470,533 103,715 (197,259) 1,214,347 ------- ------- --------
--------- 470,533 103,715 (197,259) 1,214,347 COMPREHENSIVE LOSS
$(2,216,807) $(2,548,746) $(5,028,920) $(4,014,102) ===========
=========== =========== =========== Net loss per common share and
equivalents -basic and diluted $(0.041) $(0.152) $(0.095) $(0.306)
======= ======= ======= ======= Weighted average shares outstanding
during the period - basic and diluted 53,864,109 16,726,734
52,693,232 13,108,807 ========== ========== ========== ==========
ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) For the six months periods
ended June 30, 2009 2008 Unaudited Unaudited ----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(4,831,661)
$(5,228,449) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 1,337,945
1,426,181 Provision for doubtful accounts (178,090) -- Stock based
compensation 868,616 390,072 Minority interest 756 (59,249)
Amortization of Shares issued for Consultancy 151,250 4,514 Changes
in operating assets and liabilities: Decrease (increase) in
accounts receivable (1,704,371) (975,575) (Increase) decrease in
prepaid expenses, deposits and other assets (158,168) 10,427
Increase (decrease) in accounts payable, proceeds from related
parties and customer deposits 1,565,246 982,368 Increase (decrease)
in deferred revenue (1,807) -- Increase (decrease) in accrued
expenses and other payables (112,870) 300,675 -------- ------- Net
cash used in operating activities (3,063,154) (3,149,036)
---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,963,245) (489,102)
Restricted cash 18 1,588 Loan to related party (345,895) --
-------- --- Net cash used in investing activities (2,309,122)
(487,514) ---------- -------- CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft 12,767 12,044 Placement fees - (462,867) Proceeds
from bank loans - (38,011) Proceeds from sale of shares - 15,937
Proceeds from related parties 3,306,372 Loan from related party
4,340,497 -- --------- --- Net cash provided by financing
activities 4,353,264 2,833,475 --------- --------- EFFECT OF
EXCHANGE RATES ON CASH AND CASH EQUIVALENTS (61,764) 182,331 NET
DECREASE IN CASH AND CASH EQUIVALENTS (1,080,776) (620,744) CASH
AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 1,656,546 4,366,312
--------- --------- CASH AND CASH EQUIVALENTS, END OF THE PERIOD
$575,770 $3,745,568 ======== ========== SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION: Cash paid during the period for interest
$19,880 $35,968 ------- ------- For the six months periods ended
June 30, 2009 2008 Unaudited Unaudited --------- ---------
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING & FINANCING
ACTIVITIES: Shares issued to convert the notes payable to related
parties and accrued interest $532,583 $7,939,171 Deemed Dividend as
a result of loss on conversion of the above Note to related party
-- 1,200,000 --- --------- DATASOURCE: Elephant Talk
Communications, Inc. CONTACT: Mr. Steven van der Velden,
+31-20-653-59-16, ; Mr. Thomas Walsh, Alliance Advisors, LLC,
+1-212-398-3487, Web Site: http://elephanttalk.com/
Copyright