TORONTO, ONTARIO--(Marketwire - March 21, 2013) - Phonetime Inc. (TSX:PHD) announced today its audited consolidated financial results for 2012.

Revenue was $103 Million, compared to $121 Million in 2011. Net income was $0.02 per share, or $2.4 Million, compared to $0.02 per share, or $3.4 Million, in 2011. Fourth quarter - 2012 run rate revenue was $120 Million.

(amounts in thousands of U.S. dollars, except per share information)
Years ended December 31
2012 2011
$ $
Revenue 102,896 120,835
Cost of revenue 95,850 113,485
Gross margin 7,046 7,350
Operating expenses 3,803 4,814
Depreciation of property and equipment 120 517
Amortization of intangible assets 850 1,056
Stock-based compensation 53 113
Interest and debt costs 160 338
Gain on retirement of debt (260 ) -
Mark to fair value of common share warrants (1 ) (2,290 )
4,725 4,548
Income before income taxes 2,321 2,802
Provision for (recovery of) income taxes
Current 15 (180 )
Deferred (76 ) (394 )
(61 ) (574 )
Net and comprehensive income for the year 2,382 3,376
Earnings per share
- basic and diluted 0.02 0.02
Weighted-average number of common shares
- basic and diluted 156,936,971 157,482,177

At December 31, 2012, Phonetime had $2.2 million in cash, available borrowings of an additional $2.5 million and remained debt free. As at December 31, 2012, Phonetime had assets of $21 million and shareholder's equity of $11 million. During 2012, the Company acquired and cancelled 7.5 million common shares, representing 4.8% of the outstanding stock, and paid off all remaining debt with cash flows from operations.

(amounts in thousands of U.S. dollars)
As at
December 31, December 31,
2012 2011
$ $
Cash and cash equivalents 2,288 31
Accounts receivable, net 7,397 8,030
Prepaid expenses and deposits 215 151
Total current assets 9,900 8,212
Deferred tax assets 690 818
Property and equipment, net 454 388
Intangible assets, net 621 1,336
Goodwill 10,128 10,128
21,794 20,882
Bank indebtedness - 300
Accounts payable 3,774 3,939
Accrued liabilities 6,577 6,100
Income taxes payable 32 20
Current portion of other debts - 622
Total current liabilities 10,383 11,001
Other debts - 374
Deferred tax liabilities 255 459
Common share warrants derivatives - 1
Total liabilities 10,638 11,815
Shareholders' equity
Common shares 12,444 13,072
Contributed surplus 2,817 2,482
Deficit (4,105 ) (6,487 )
Total shareholders' equity 11,156 9,067
21,794 20,882

"In 2013, we expect to see revenue growth in our core business. We also expect to expand our service footprint through organic growth, while we also continue to review investment, acquisition and merger opportunities. We expect to raise capital in 2013 and or to issue debt to support our growth initiatives. In conjunction with opportunities being pursued, we may opt to list our common shares on a US exchange. If we pursue this path, we will consolidate the number of shares outstanding to adhere to US listing requirements," said Gary Clifford, Executive Chairman and CEO. "Since 2009, the Company has made reference to the going concern assumption in its financial statements. We are pleased that our improvements in financial operation and financial position have led management and our external auditors to concur that a reference to the going concern assumption is not required."

The Company's financial statements and other disclosures are available on SEDAR.

About Phonetime Inc.

Established in 1994, Phonetime is a leading provider of international and domestic switched voice services to the worlds telecommunication operators and voice service providers. Phonetime's customers and suppliers include, fixed line operators, mobile operators, retail and VoIP service providers, who buy and sell voice and IP telecommunications services. Phonetime has traders in Europe, Asia and the Americas using its proprietary trading platform with embedded intelligence, which includes profitability benchmarking, call routing, credit management, network quality visibility and loss prevention. As voice technology evolves Phonetime has commoditized its trading philosophy and along with its platform is positioned to emerge as a leading clearing house. Phonetime is a public company listed on the Toronto Stock Exchange (TSX).

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. Phonetime'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 which contains all securities files.

Contact Information:

Phonetime Inc.
Gary Clifford
Executive Chairman & CEO

Phonetime Inc.
Michael Vazquez
President and COO