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Elephant Talk Announces Preliminary Third Quarter Revenue Of $5.2 Million As Company Margins Increased To 79%

Stocks in this article: ETAK

OKLAHOMA CITY, Nov. 4, 2013 /PRNewswire/ -- Elephant Talk Communications Corp. (NYSE MKT: ETAK) (the "Company" or "Elephant Talk"), ( www.elephanttalk.com), a leading international provider of proprietary Software Defined Network Architecture (Software DNA™) platforms that process big data for the telecommunications industry that empower Mobile (Virtual) Network Operators (MNOs and MVNOs) and a market leader in providing cyber security solutions to counter electronic fraud in the cloud, today announced preliminary fiscal 2013 third quarter results.  The Company expects to record revenue for the third quarter of $5.2 million and total margin* of $4.1 million.

(Logo: http://photos.prnewswire.com/prnh/20120917/MM75872LOGO)

Elephant Talk's fiscal 2013 third quarter mobile and security solutions revenue increased 12% to $5 million when compared to $4.5 million in the second quarter of 2013.  During the quarter, approximately 96% of Elephant Talk's revenue base was derived from its monthly recurring mobile and security business.  The remaining 4% came from its low margin legacy landline business. Total margin increased by 17% to $4.1 million during the third quarter compared to $3.5 million in the second quarter of 2013. Third quarter Adjusted EBITDA* improved by $864,000 from a loss of $949,000 in the second quarter of 2013 for a loss of $85,000 in the third quarter due to the Company's growth.

"Management is pleased with the strong growth of our mobile and security business, with the planned transition from our low margin legacy landline business almost complete," stated Mr. Steven van der Velden, CEO of the Company.  "Our monthly recurring revenue model produced 79% margins during the third quarter under our current contracts with Iusacell in Mexico, the Zain Group in the Middle East and Vodafone in Spain.  The continued increase of our mobile services business has further improved our Adjusted EBITDA and with the continued building of our sales pipeline with key mobile and security clients, we remain confident that we will achieve positive Adjusted EBITDA status by year end."

Elephant Talk will announce full fiscal 2013 third quarter results on November 12, 2013.  The Company will host its Third Quarter Financial Results Conference Call on November 12 at 11:00 a.m. (EST).  Anyone interested in participating should dial (480) 629-9713 approximately 5 to 10 minutes prior to 11:00 am. Participants should ask for the Elephant Talk Third Quarter Results Conference Call. This call is being webcast by ViaVid Broadcasting and can be accessed at either Elephant Talk's website at www.elephanttalk.com or ViaVid's website at http://www.viavid.net.

* Non-GAAP financial measuresTo supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, Elephant Talk uses measures of non-GAAP Adjusted EBITDA and margin. Margin is derived from the income statements by subtracting cost of service from revenues. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance.

Management uses these non-GAAP measures to evaluate the Company's financial results, develop budgets, manage expenditures, and determine employee compensation. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to net income (loss) or net income (loss) per share determined in accordance with GAAP.For the three months ended September 30, 2013 and 2012, non-GAAP Adjusted EBITDA is defined as earnings before derivative accounting, such as warrant liabilities and conversion feature expensing, income taxes, depreciation and amortization and stock-based compensation. It is determined by taking net loss and adding back provision for income taxes, depreciation and amortization, stock-based compensation expense, other income and expenses, and equity in earnings of unconsolidated joint venture.

About Elephant Talk:Elephant Talk Communications Corp. (NYSE MKT: ETAK) is a leading international provider of mobile proprietary Software Defined Network Architecture (Software DNA TM) platforms for the telecommunications industry that empower Mobile Network Operators (MNOs) and Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, Full OSS/BSS Systems, Delivery Platforms, Support and Managed Services, on-site, cloud, hybrid and S/PaaS solutions, including Network, Mobile Internet ID Solutions, Secure Remote Access Management, Loyalty Management and Transaction Processing Services, superior Industry Expertise and high quality Customer Service without substantial upfront investment.  Elephant Talk counts several of the world's leading Mobile Operators amongst its customers including Vodafone, T-Mobile and Zain. Virtually all business is focused on tier 1 and tier 2 operators worldwide.  Visit:  www.elephanttalk.com.

About ValidSoft:ValidSoft provides advanced mobile- and cloud-security solutions. ValidSoft has developed a custom-built sophisticated multi-factor authentication platform (SMART™) for the mobile world, which takes full advantage of mobile telecommunication channels and devices and includes a leading proprietary voice biometric engine. These solutions combat electronic fraud and safeguard consumer privacy across internet and mobile banking, credit/debit-card and (mobile and fixed line) telephony channels. ValidSoft's solutions are used to verify the authenticity of both parties to a transaction (Mutual Authentication), ensure the fidelity of telecommunication channels (Secure Communications), and confirm the integrity of transactions themselves (Transaction Verification) – in each case in a manner which is scalable for the mass market, cost-effective, secure and easy to use and deploy. The company counts some of the world's largest financial institutions among its customers. ValidSoft is the only security software company in the world that has been granted three European Privacy Seals. Visit: www.validsoft.com

Forward-Looking StatementsCertain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements may include, without limitation, statements with respect to Elephant Talk's plans and objectives, projections, expectations and intentions.  These forward-looking statements are based on current expectations, estimates and projections about Elephant Talk's industry, management's beliefs and certain assumptions made by management.  Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict.  Because such statements involve risks and uncertainties, the actual results and performance of Elephant Talk may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, Elephant Talk also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here.  Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in Elephant Talk's filings with the Securities and Exchange Commission (SEC), copies of which are available from the SEC or may be obtained upon request from Elephant Talk.

Media Contacts:

Investor Relations: Steve GerstenElephant Talk Communications Corp.+ 1 813 926 8920 steve.gersten@elephanttalk.com

Thomas WalshAlliance Advisors+ 1 212 398 3486 twalsh@allianceadvisors.net

SOURCE Elephant Talk Communications Corp.

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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