DEERFIELD BEACH, Fla., Jan. 17, 2006 (PRIMEZONE) -- TelePlus Enterprises, Inc. (OTCBB:TLPE) (Frankfurt:YT3) (www.teleplus.ca) is StockMarketNewsAlert.com Stock To Watch today. According to M. D'Alonzo at First Equity Group, Inc., "The company announced last week that its wholly owned subsidiary, TelePlus Wireless, Corp. ("TelePlus Wireless"), signed a definitive agreement (the "Agreement") and completed the acquisition of certain assets of Liberty Wireless ("Liberty"), which is owned by StarNumber, Inc., a wholly owned subsidiary of InPhonic, Inc. ("InPhonic"). Liberty is the 3rd largest Sprint wireless reseller ("MVNO") on the CDMA network (after Virgin Mobile and Qwest) and is in the top 10 prepaid wireless providers in the U.S. This acquisition represents excellent news for TelePlus and its shareholders, as the financial impact of the acquisition promises to be both far-reaching and long-lasting. TelePlus Wireless will continue to operate this wireless reseller business under the Liberty Wireless name. The Liberty business is expected to add $14M of new revenue per annum to TelePlus and contribute in excess of $1M per annum to the Company's EBITDA (defined as earnings before depreciation, amortization, interest expenses and taxes). The Company's combined customer base will increase by approximately 22,000 users, reaching in excess of 47,000 user lines for an increase of 88%. Liberty Wireless will also positively impact the Company's cash flows. This acquisition represents an expansion of the Company's business into the growing U.S. prepaid wireless market.
"Acquiring the assets of Liberty Wireless marks a real turning point for TelePlus," stated Marius Silvasan, CEO & Chairman of TelePlus. "With this strategic acquisition, we solidify our presence as one of the top MVNOs in the U.S., and we are poised to complete our transformation from an operator of retail stores in Canada to a full telecom and wireless services provider across Canada and the U.S. The Liberty Wireless brand is one of the best known and respected MVNO brands in the U.S. marketplace, and we intend to preserve and foster that goodwill by continuing to operate under the Liberty Wireless name. The Liberty acquisition, combined with the back office and logistics arrangement we've put in place with InPhonic, provides us a robust infrastructure for strong growth," added Silvasan.
With the acquisition of Liberty, the Company has also decided to take immediate steps to complete its transformation to a full telecom and wireless provider across North America and to divest itself, by the end of the first quarter, of its Canadian retail operation. TelePlus Retail Services, Inc. ("TelePlus Retail"), a Canadian subsidiary of TelePlus, manages the Company's 23 retail stores in Canada and for years the subsidiary has been negatively impacting the Company's earnings and cash flows. This decision follows the culmination of efforts made by TelePlus within the preceding twelve months to consolidate and downsize its retail footprint in order to earn better returns from that division. The continuing negative impact of the retail division on the Company's earnings and cash flows, and the desire to focus on the highly profitable, core reseller business of Teleplus were the major factors cited for the divestiture decision. To expedite the divestiture, the Company has directed TelePlus Retail to file in Canada a motion authorizing it to make a proposal to its creditors within 30 days and complete the divestiture.
The Company's combined revenue run rate, including Liberty Wireless, but excluding the retail business, is now in excess of $30M per annum, which is 50% higher than the anticipated full year revenues for 2005. From an EBITDA perspective, with the addition of Liberty Wireless and the removal of the negative impact of the retail subsidiary, the Company anticipates that it will generate a positive run rate of $2.5M-$3M per annum. The revenue and EBITDA run rates do not account for either organic or acquisition driven growth.
"Operating retail stores no longer fits our business model as the stores continued to be a drag on our earnings. With the recent acquisition of Liberty Wireless and the forthcoming divestiture of our retail division, we will achieve our stated objective of transforming the Company into a highly profitable world-class reseller of telecom and wireless services," stated Marius Silvasan, Company CEO & Chairman. "Adding Liberty's revenues to our own puts our run rate for 2006 at over $30M -- a 50% increase versus last year -- and this without taking into account any future growth. I believe we are in a better position than ever to outperform this year," added Silvasan.
For the full profile, the reader's attention should be drawn to our initiating report, which is available on www.StockMarketNewsAlert.com. More information is available on www.stockmarketnewsalert.com.
This press release is available on the TelePlus' Investor Relation's site for investor questions, commentary and feedback. Investors are asked to visit www.agoracom.com and select the TelePlus Investor Relations HUB. Alternatively, investors can e-mail their questions or comments directly to TLPE@agoracom.com or ask to be placed on the TelePlus investor e-mail list to receive all future press releases directly.
About TelePlus (OTCBB:TLPE) http://www.TelePlus.ca
TelePlus Enterprises, Inc. ("TelePlus") is a provider of Wireless and Telecom products and services across North America. TelePlus Connect, Corp. -- is a reseller of a variety of Telecom services including landline, long distance and internet services. TelePlus Wireless, Corp. -- under the brand name "Liberty Wireless" -- operates a virtual wireless network selling cellular network access to distributors in the United States. www.telepluswireless.com, www.libertywireless.com and www.vivaliberty.com are among some of the websites operated by TelePlus.
The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development and acquisition of new product lines and services, government approval processes, the impact of competitive products or pricing from technological changes, the effect of economic conditions and other uncertainties, and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-KSB; its quarterly reports on Forms 10-QSB; and any reports on Form 8-K. TelePlus Enterprises, Inc. takes no obligation to update or correct forward-looking statements.
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