Tellza Three and Nine Month Revenue Up 73% and 58%

TORONTO, ONTARIO -- (Marketwired) -- 11/14/13 -- Tellza Communications Inc. (TSX: TEL) announced its financial results for the nine months ended September 30th, 2013. Revenue for the three months ended September 30th, 2013 was $38 Million compared to $22 Million in 2012, an increase of 73%. Revenue for the nine months ended was $112 Million compared to $71 Million in 2012, an increase of 58%. EBITDA(i) for the three months ended was $950,000 compared to $639,000 for the same period in 2012, an increase of 49%. EBITDA(i) for the nine months ended was $3.0 Million compared to $1.9 Million for the same period in 2012, an increase of 58%. Net Income before taxes for the nine months ended September 30th, 2013 was $2.6 Million compared to $1.2 Million in 2012, an increase of 116%. CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands of U.S. dollars, except per share information) For the three and nine months ended September 30 2013 2012 2013 2012 $ $ $ $ ------------------------------------------------------- Unaudited Unaudited Unaudited Unaudited Revenue 38,224 22,412 112,066 70,597 Cost of revenue 36,166 20,699 105,999 65,231 ------------------------------------------------------- ------------------------------------------------------- Gross margin 2,058 1,713 6,067 5,366 ------------------------------------------------------- Operating expenses 1,013 1,074 2,926 3,440 Depreciation of property and equipment 32 30 94 90 Amortization of intangible assets 103 107 312 743 Stock-based compensation 13 10 39 33 Interest and debt costs 9 40 25 144 Other investments 95 - 95 - Gain on retirement of debt - - - (260) Mark to fair value of common share warrants - - - (1) ------------------------------------------------------- 1,265 1,261 3,491 4,189 ------------------------------------------------------- Income before income taxes 793 452 2,576 1,177 ------------------------------------------------------- Provision for (recovery of) income taxes Current 280 5 285 15 Deferred (60) (100) 510 (300) ------------------------------------------------------- 220 (95) 795 (285) ------------------------------------------------------- Net and comprehensive income for the period 573 547 1,781 1,462 ------------------------------------------------------- Earnings per share - basic and diluted $ 0.00 $ 0.00 $ 0.01 $ 0.01 ------------------------------------------------------- Weighted-average number of common shares - basic and diluted 151,231,492 158,731,492 151,231,492 158,731,492 ------------------------------------------------------- Balance sheet metrics: September 30, December 31, 2013 2012 ($000's) ($000's) -------------------------------------------------- -------------------------------------------------- Unaudited Unaudited Cash 1,705 2,288 Debt 0 0 Available borrowings 3,500 2,500 Total Assets 23,528 21,794 Working capital 1,868 -482 Equity 12,976 11,156 "We are pleased with the progress of our Phonetime brand in 2013," said Gary Clifford, Executive Chairman. "In 2014, we expect to increase organic growth as our Route Dynamix's business plan evolves from a development stage company to contributing member of the Tellza family." The Company's financial statements and other disclosures are available on SEDAR. The Company also announced that, effective at the opening of trading today on The Toronto Stock Exchange, trading in the Company's common shares will continue under the new name, "Tellza Communications Inc.", the new stock symbol "TEL" and the new CUSIP number 87968V 10 8. About Tellza Tellza is a global communications company operating under several brands including Route Dynamix, Phonetime, Tel3, GoLifeTel, and Tellza Technologies. Tellza is a public company listed on the Toronto Stock Exchange (TEL). Caution Regarding Forward Looking Information: This press release contains forward-looking statements, which may be identified by words like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. These statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. Tellza's actual results could differ materially from those currently anticipated due to a number of factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time. See www.sedar.com which contains all securities files. (i)We define EBITDA as earnings before taxes, depreciation and amortization, stock based compensation, interest, gain on retirement of debt, and mark to fair value of common stock warrants. EBITDA, which is a non-GAAP financial measure, it is a standard measure used in the telecommunications industry to assist in understanding and comparing operating results. EBITDA is reviewed regularly by management and our Board of Directors in assessing performance and in making decisions regarding the ongoing operations of the business and the ability to generate cash flows. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. EBITDA is not a measure of financial performance nor does it have a standardized meaning under IFRS. In evaluating these measures, investors should consider that the methodology applied in calculating as such measures may differ among companies and analysts. Below is a reconciliation of "EBITDA" to net income for the periods presented: For the three and nine months ended September 30 2013 2012 2013 2012 $ $ $ $ ---------------------------------------- Unaudited Unaudited Unaudited Unaudited EBITDA Reconciliation Net and comprehensive income for the period 573 547 1,781 1,462 Income taxes 220 -95 795 -285 Depreciation of property and equipment 32 30 94 90 Amortization of intangible assets 103 107 312 743 Stock-based compensation 13 10 39 33 Interest and debt costs 9 40 25 144 Gain on retirement of debt 0 0 0 -260 Mark to fair value of common share warrants 0 0 0 -1 ---------------------------------------- EBITDA 950 639 3,046 1,926 ---------------------------------------- ---------------------------------------- Contacts: Tellza Communications Inc. Gary Clifford Executive Chairman & CEO gclifford@tellza.com Tellza Communications Inc. Michael Vazquez President +954-608-5058 mike@tellza.com