NTTL
Nettel Holdings Reports Third Quarter 2006 Financial Results and Forward Guidance
11/21/2006 8:10:18 AM
PORTLAND, OR, Nov 21, 2006 (MARKET WIRE via COMTEX) -- November 20, 2006 Nettel Holdings, Inc. ( NTTL ), Berlin and Frankfurt Stock Exchanges (NT7, WKN 727487) Reports third quarter ended September 30, 2006 Financial Results and Forward Guidance. During this quarter, our revenues increased over 1,000% over the 2nd quarter revenues to a reported amount of $2,607,135.00 USD. The majority of the revenues were derived from the successful expansion mid-quarter of AVOP, a VoIP routing and exchange platform which allows buyers and sellers to safely complete call termination transactions on an automated platform. Our Nettel Telecom Division was also a significant contributor to our revenue growth. Gross profits amounted to $121,654. General and Administrative expenses amounted to just $68,783, with an interest expense of $5,978. Additional expenses were incurred however due to continued research and development costs for the creation of AVOP, including the expenses for extensive training protocols and the creation and implementation of a state of the art and expanded client services division. These expenses amounted to $252,018, for a net loss for the quarter of $205,193. A diluted net loss per share of $.006 Revenue and profit margins have continued to accelerate in the 4th Q.
Highlights of the third quarter include
-- Revenue from wholesales minutes continues to grow for Nettel Telecom
and AVOP.
-- The momentum from third quarter is increasing and carrying over in 4th
quarter.
-- Revenue traffic increases on a daily basis.
-- Each week shows an increasing client base
-- New vendors for PhoneZoo will bring additional revenues 4th Quarter
We in management know that AVOP will be the division that will fuel the Company's growth both in revenues and profits in the future, and that our most significant development in the third quarter was the expansion of AVOP. Prior to, and until the middle of the third quarter, most of our traffic through AVOP was basically beta traffic. We offered special arrangements to selected clients to test and retest our system. We spent weeks troubleshooting real and potential challenges so that our efforts inspired confidence to introduce AVOP to our existing client base. In the third quarter, four major long distance carriers provided 92% of our Company's net revenues, and four suppliers accounted for 92% of the Company's cost of goods sold. We have dozens of large carriers now currently enrolled who will soon be increasing our revenues as we terminate minutes for them and through them. We are choosing a controlled growth with new clients as we are determined to create and maintain the highest standards for the industry. During last year's third quarter, we had only one customer and one supplier account for 98% of the net revenues and cost of goods sold, respectively. We expect our revenues and profits from AVOP to increase over the 4th quarter as we have an entire quarter to be in full operation as well as increasing our revenues and profits with new and existing clients each day. AVOP offers sellers the best terms for the termination of minutes -- same day payment.
The 3rd quarter has turned out to be a transitional time for PhoneZoo. After experiencing some difficulties with the quality of routes provided by some of our vendors servicing our phone cards, and not wishing to compromise our quality, we chose to temporarily pause our marketing energies of the calling cards and focus all of our energies and resources on developing and improving our companies main long-term profit center, AVOP, to create the most advanced platform of its type on the market. Toward the end of the 3rd quarter, once we had completed most of our training and implemented new protocols for client management and customer service for AVOP, we pursued new improved routes for PhoneZoo and expect PhoneZoo to be a strong additional profit center for the company
Management believes that there is will be increased business for AVOP, as it will continue in the 4th quarter to generate increasing net revenues over the third quarter due to increased demand from existing clients, and more importantly, the constant addition of new clients. In order to service these new clients to our standards, we are currently adding three more Senior Account Managers to work closely with major carriers, two which are being promoted from our Entec division, and have started their advance training immediately. This is one of our major advantages, our ability to utilize our highly skilled software division, Entec. Based in Vietnam, Entec allows us to effectively and efficiently keep our expenses at a minimum, to be the most competitive type of company in our industry. The 17 Entec employees now assigned to AVOP division are graduates of a highly regarded Vietnamese graduate school. With the addition of these Account Managers, we expect our daily revenues for AVOP and other telecom divisions to exceed $50K per day shortly with a gross profit margins target of 14%.
Now that we have entered into agreements with improved vendors for PhoneZoo, we will begin refocusing our energies to market and distribute our calling cards, beginning with our existing distributor base in US, Canada and Australia. We expect a profit margin on these cards of 15-20%.
We feel we have finally established the solid foundation our company needs to continue to go forward with increased growth in revenues and profitability. We are dedicated to the success of our company and to our shareholders, and are working tirelessly to that end. We have had a few challenges, and mistakes, in the past year; however we have built a company that is now, a necessary service to the telecom industry. Management and employees here in the United States and in Vietnam look forward each day to building a bigger and stronger Nettel.
Contact:
Sam Brewer
Telephone: 360-450-3048
