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Tellza Announces 2014 Q1 Financial Results

Revenue climbs to $51M USD in Q1-2014 up 51% from Q1-2013

TORONTO, ONTARIO -- (Marketwired) -- 05/06/14 -- Tellza Communications Inc. (TSX: TEL) announced its unaudited financial results for the three months ended March 31, 2014.

Revenue was US$51.4 Million compared to US$34.0 Million in 2013, a growth of 51%. Net Income was US$0.3 million compared to net income of US$0.4 million in 2013. EBITDA(i) in Q1 2014 was US$0.8 million compared to US$0.7 million in 2013, an increase of 14%.

Tellza completed Q1 - 2014 with US$2.2 Million in cash and an undrawn credit facility of US$3.5 Million. Since 2011, Tellza has generated US$10.5 Million in Cash Profits(i) that have been utilized as set out in the below table:

To view 'Cumulative Cash Profits since 2011 $10.5M US', please visit the following link: http://media3.marketwire.com/docs/tell05061.jpg

To view 'Financial Metrics (USD '000's)', please visit the following link: http://media3.marketwire.com/docs/tell05062.jpg

    (amounts in thousands of U.S. dollars, except per share information)
For the period ended March 31                           2014            2013
                                                           $               $
                                                 (Unaudited)     (Unaudited)

Revenue                                               51,366          34,050
Cost of revenue                                       49,276          32,430
Gross margin                                           2,090           1,620

Operating expenses                                     1,290             875
Depreciation of property and equipment                    74              31
Amortization of intangible assets                        295             107
Stock-based compensation                                   3              13
Interest and debt costs                                   18              12
                                                       1,680           1,038
Income before income taxes                               410             582
Provision for (recovery of) income taxes
  Current                                                  -               -
  Deferred                                               120             179
                                                         120             179
Net and comprehensive income for the year                290             403

Earnings per share
  - basic and diluted                                      -               -

Weighted-average number of common shares
  - basic and diluted                            183,631,945     151,231,492

"2014 is showing a continuation of the success achieved in 2013. In Q1-2014 we also completed the acquisition of MatchCom Communications, LLC", said Gary Clifford, Executive Chairman. "We are excited about our growth prospects in the coming years as we look to consolidate traffic in the Carrier Services Market."

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

The Company's corporate profile is located at www.tellza/investors.

About Tellza

Tellza is a global communications company operating under several brands including Route Dynamix, Phonetime, Tel3, MatchCom 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 and Cash Profits as earnings before taxes, depreciation and amortization, stock based compensation, and interest. 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:

                                                         2014 -  2011 - 2014
EBITDA Reconciliation              2011    2012    2013      Q1           Q1
                               -------- ------- ------- ======= ============

                                      $       $       $       $            $
Net Income before tax             2,802   2,321   3,236     410        8,769
Interest and debt costs             338     160      33      18          549
Stock-based compensation            113      53      12       3          181
Amortization of intangible
 assets                           1,056     850     556     295        2,757
Depreciation of property and
 equipment                          517     120     127      74          838
Gain on retirement of debt            -   (260)       -       0        (260)
Mark to fair value of common
 share warrants                 (2,290)     (1)       -       0      (2,291)
EBITDA (Cash Profits)             2,536   3,243   3,964     800       10,543

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