XFone Reports Record Q1 Revenues

XFone announces revenues up 44% for first quarter

May 17, 2005

2 Min Read

LONDON -- XFONE, Inc. (OTC Bulletin Board: XFNE - News; "XFONE" or "the Company"), a provider of international voice and data communications services, today reported its first quarter financial results for the three months ended March 31, 2005. Financial Highlights for the Three Months Ended March 31, 2005 Compared to the Three Months Ended March 31, 2004 Reflected in British Pounds (convenience translation into U.S. Dollars):

* Revenues increased 43.6% to (pound)3,312,934 (US$6,228,317) from (pound)2,307,215 (US$4,337,564).

* Due largely to expenses associated with the continued build-up of the Company's new 'XFONE 018' international long distance operations in Israel, net income declined to (pound)39,874 (US$76,957) from (pound)103,069 (US$193,770).

* Net Profit, excluding the Israeli "start up" losses, increased to approximately (pound)150,949 ($247,218).

* Diluted earnings per share were (pound)0.004 (US$0.007) compared to (pound)0.010 (US$0.019).

* The Company generated net cash from operations of (pound)25,244 ($47,458), up from net cash used in operations of (pound)192,475 ($361,853).

* Stockholder equity increased to approximately (pound)4.1 Million ($7.8 Million)

* Revenues generated by XFONE's UK-based subsidiary, Swiftnet, were (pound)2,253,639 ($4,236,841) for the three months ended March 31, 2005.

* XFONE USA, XFONE's U.S.-based subsidiary located in Jackson, Mississippi, contributed (pound)861,083 ($1,618,836) in revenues for the three months ended March 31, 2005.

* XFONE 018, the Company's new Israel-based subsidiary, produced (pound)198,210 ($372,635) in revenue during its first three full months in operation from January to March 2005.

* The Company has approximately (pound)3.5 Million ($6.5 Million) in cash and account receivables.

Guy Nissenson, Company President and Chief Executive Officer, stated, "The first quarter of 2005 represents a major milestone in the exciting growth of our Company, going from a local operator in London to having the first full quarter as a multi-national efficient Telecom Service provider with world class operations in the UK, the United States and Israel. XFONE started the year 2005 on a record pace, and we are very proud of the fact that we have once again set a new historical high in quarterly revenues. Each of our operating subsidiaries performed well in the first quarter. Our operations in the United Kingdom and in the United States each delivered strong results and achieved high and solid revenues and profits. After only three full months in operation, XFONE 018, our new long distance carrier business in Israel, is demonstrating very strong revenue growth and is presently ramping towards achieving positive cash flow ahead of our initial expectations.

"We are determined to continue implementing our business model that is based on aggressive growth that generates considerable profitability. We are confident that the exciting growth XFONE is experiencing will continue through the remainder of the year," concluded Mr. Nissenson.

XFone Inc.

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