eLEC Reports First Quarter Results

WHITE PLAINS, N.Y.–(BUSINESS WIRE)–April 17, 2006–eLEC Communications Corp. (OTCBB:ELEC - News), a wholesale and retail communications provider that offers standard wireline and VoIP telephone services, announced results for the first quarter ended February 28, 2006.

eLEC reported a loss from operations of ($373,964), compared to a loss from operations of ($402,972) for the same quarter last year. Net loss for the quarter was ($663,479), or ($0.04) per share, compared to a net loss of ($380,589), or ($0.02) per share for the same quarter last year. As planned, revenue for the three-month period ended February 28, 2005 decreased to $2,497,000 compared to $3,863,000 in the same period last year as the company shifted its strategic focus and resources away from its traditional wireline phone business (CLEC) and towards the successful introduction and roll-out of its award-winning VoIP offering.

eLEC's CEO Paul Riss noted, "Since launching our VoIP service in July, the cornerstone of our long-term growth strategy has been to aggressively partner with companies who need a VoIP wholesale solution. Our goal is to have 75 wholesale customers by the end of this year and we are on track to meet or exceed this number. Since July, 19 wholesale customers have been signed and activity is accelerating. For example, in March alone we entered into 30 new non-disclosure agreements, the first step in the sales cycle. This is particularly encouraging since we have found that about half of the companies that sign non-disclosures eventually sign up as wholesale partners. Importantly, we are also beginning to see our wholesale partners generate new VoIP customers as they ramp-up sales and marketing for the product."

Riss continued, "During the quarter, we were able to successfully scale back our traditional wireline customer base to focus on higher quality customers, thereby reducing our bad debt expense and improving our operating margin. Furthermore, SG&A was lower than the prior year first quarter as we discontinued proactive telemarketing on the wireline side of our business. Going forward, we believe that the VoIP wholesale strategy, which leverages the sales and marketing resources, capital, and built-in customer base of our wholesale partners, provides an attractive long-term strategy to efficiently scale a high margin, profitable business."

Complete details of eLEC Communication Corp.'s results of operations can be found in the company's Form 10-Q, which has been filed with the Securities and Exchange Commission.

 

About eLEC Communications

eLEC Communications Corp., headquartered in White Plains, NY, is a communication services holding company that is taking advantage of the convergence of the technological and regulatory developments in the Internet and telecommunications markets. eLEC's wholly owned subsidiaries provide an integrated suite of communications services to business and residential customers, including local, long distance, dedicated access and VoIP. For more information, visit http://www.elec.net.

This release contains forward-looking statements that involve risks and uncertainties. eLEC's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, among others, certain risks and uncertainties over which the company may have no control. For further discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the discussions contained in eLEC's Annual Report on Form 10-K for the year ended November 30, 2005 and any subsequent SEC filings.

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For more information, please contact:

VoX Communications Corp.
Kim Martin
813-217-9777
kmartin@voxcorp.net

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