Axesstel Reports Fourth Quarter and Full Year 2012 Results

Axesstel Reports Fourth Quarter and Full Year 2012 Results

    - Grows full year revenue to $59.7 million; up 10% compared to 2011 -
             - Achieves record gross margin of 26% for the year -
     - Posts record annual net income of $4.3 million and EPS of $0.16 -
            - Records sixth consecutive quarter of profitability -

SAN DIEGO, Feb. 28, 2013 (GLOBE NEWSWIRE) -- Axesstel (OTCQB:AXST), a leading
provider of wireless voice, broadband access and connected home solutions to
the worldwide telecommunications market, reported results for its fourth
quarter and year ended December 31, 2012.

For the year ended December 31, 2012, Axesstel reported revenue of $59.7
million and net income of $4.3 million, or $0.16 per diluted share. This
compares to revenue of $54.1 million and net income of $1.1 million, or $0.05
per diluted share, for 2011.

Clark Hickock, CEO of Axesstel, stated, "Today we reported the most profitable
year in the company's history. Overall, 2012 was our most successful year ever
as we posted records for several key financial metrics: gross margins of 26%,
operating income of $4.7 million, net income of $4.3 million and EPS of $0.16.
We achieved our operating goals for the year by reporting annual revenue
growth of 10% and achieving consistent quarterly profitability as we recorded
our sixth consecutive profitable quarter."

Axesstel reported revenue of $15.8 million for the fourth quarter of 2012. Net
income for the period was $824,000, or $0.03 per diluted share. This compares
to revenue of $16.9 million and net income of $1.0 million, or $0.04 per
diluted share, for the same period in the prior year.

Hickock commented, "Contributing to the fourth quarter results were sales from
our existing Rev. B Wi-Fi gateway in Europe, which delivered $7.9 million in
revenue and continues to be our number one selling product globally. Sales of
our wire-line replacement terminal to Sprint contributed $2.1 million in
revenue and sales of our first new wireless security alert notification
systems to two different customers in Africa totaled $3.5 million in revenue."

The company completed two transactions that bolstered its balance sheet in
2012 and lowered its cost of borrowing. In September, it entered into an
agreement with Wistron Neweb Corporation (WNC) to restructure an $8.2 million
past due account payable by paying $458,000 in cash and issuing a $7.7 million
non-interest bearing note to WNC. The issuance of the note had a $5.1 million
positive impact on working capital at December 31, 2012, as that amount was
reclassified from a current to long term liability. Also in September, the
company entered into a one year $7.0 million credit facility with Silicon
Valley Bank. The new facility reduced the company's cost of borrowing to 6% to
7% at current market rates, compared to 16% to 24% under its prior facility.

Hickock continued, "Our 2012 results represent the successful execution of our
strategy to launch competitively-priced products, aggressively reduce
operating costs, and shift our customer focus to servicing major carriers in
specific markets. We have achieved a significant turnaround and put the
company on the right footing for success in 2013 and beyond.

"We are very excited about 2013 with the launch of our new dual-mode gateway
designed for the European market, which supports both GSM and CDMA
technologies in one device, and the upcoming release of the next generation of
our wire-line replacement terminals for the North American market.

"We also plan to release a series of five Axesstel Home Alert security alert
systems in key strategic global markets. The initial product, which was
launched in late 2012, provides basic wireless alert functions and is being
marketed to the Middle East, Africa and Latin America. The second product
provides similar functionality and is planned for release in the United
States. The third product integrates the alert system with our wire-line
replacement terminal and incorporates 'connected-home' applications and will
be targeted toward customers in the United States. The fourth and fifth
products combine security alert, voice, and high speed data capabilities with
a wide array of connected-home applications and are targeted for sale in the
US, Europe and Latin America.

"In summary, we made significant progress in 2012 but we believe the best is
yet to come. We will focus on broadening our product, geographic and customer
platforms to continue our success in 2013," Hickock concluded.

Financial Results

For the year ended December 31, 2012, the company reported revenue of $59.7
million, compared to $54.1 million for 2011. Gross margin was $15.3 million
for 2012, or 26 percent of revenue, compared to $12.9 million, or 24 percent
of revenue, for 2011. Operating expenses were $10.6 million for 2012, compared
to $10.3 million for 2011. Net income for the year ended December 31, 2012,
was $4.3 million, or $0.16 per diluted share, compared to a net income of $1.1
million, or $0.05 per diluted share, in 2011. Net income was benefited by a
one-time gain of $618,000, associated with a one-time note payable discount of
$791,000 that was partially offset by $173,000 of imputed interest
amortization on the non-interest bearing promissory note issued to WNC.

Revenues for the fourth quarter of 2012 were $15.8 million, compared to $16.9
million in the fourth quarter of 2011. Gross margin was $4.0 million, or 25
percent of revenue, for the fourth quarter compared to gross margin of $4.3
million, or 26 percent of revenue, in the same period last year. Fourth
quarter 2012 operating expenses were $3.1 million and included a $300,000
provision for bad debt expense. This compares to operating expenses of $2.9
million in the fourth quarter of 2011. Net income for the fourth quarter was
$824,000, or $0.03 per diluted share, compared to fourth quarter 2011 net
income of $1.0 million, or $0.04 per diluted share.

At December 31, 2012 cash and cash equivalents were $1.9 million, compared to
$850,000 at December 31, 2011. Working capital was a deficit of $2.2 million
at year end, compared to working capital deficit of $11.8 million at December
31, 2011.

The company continues to fund its operating requirements through cash flows
from operations and bank financings. Axesstel ended the year with $3.5 million
in bank financings including $1.9 million under the company's account
receivable financing facility and $1.6 million under a term loan with a
commercial bank in China and the $6.9 million note payable to WNC, net of
discount, with a current portion of $1.8 million and a long-term portion of
$5.1 million.

Recent Highlights

  *Shipped the first product in a new line of Axesstel Home Alert wireless
    security alert systems to two new customers in Africa.
  *Became a partner on Deutsche Telekom's M2M Marketplace, a global online
    network dedicated to promoting adoption of M2M products and solutions in
    the booming M2M market.
  *Launched its new SP100 Android smartphone.

Conference Call

Axesstel will host a conference call at 8:00 a.m. PT (11:00 a.m. ET) today,
February 28^th, to discuss its 2012 and fourth quarter results.Participating
in the call will be Clark Hickock, chief executive officer; and Patrick Gray,
chief financial officer.

This call is being webcast and can be accessed from the "Investor Relations"
section of the company's website at http://www.axesstel.com.Alternatively,
you may participate in the call by dialing 1-877-663-9622.International
callers should dial 00-1-973-200-3973.The conference ID/password will be
92716082.Participants are encouraged to dial in 10 minutes prior to the call
to prevent a delay in joining.If you are unable to participate in the call at
this time, the webcast will be archived on the Axesstel website.In addition,
a telephonic replay will be available at 2:00 p.m. ET today through Monday,
March 4^th at 11:59 p.m. ET.To access the replay, please dial
1-855-859-2056.International callers should dial 00-1-404-537-3406.The
password will be 92716082.

About Axesstel, Inc.

Axesstel (OTCQB:AXST) is a leading provider of wireless voice, broadband
access and connected home solutions for the worldwide telecommunications
market. Axesstel's best in class product portfolio includes phones, wire-line
replacement terminals, security alert systems, and 3G and 4G broadband gateway
devices. These products are used for voice calling, high-speed data access,
and connected home management services. The company has supplied millions of
devices to leading telecommunications operators and distributors in over 50
countries worldwide. Axesstel is headquartered in San Diego, California. For
more information on Axesstel, visit www.axesstel.com.

The Axesstel, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6261

© 2013 Axesstel, Inc. All rights reserved. The Axesstel logo is a trademark of
Axesstel, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: With the exception of historical information, the statements set forth
above include forward-looking statements relating to market penetration and
conditions, product capabilities and the timing of new product introductions
which may affect future results and the future viability of Axesstel.Axesstel
wishes to caution readers that actual results could differ materially from
those suggested by the forward-looking statements due to risks and
uncertainties and a number of important risk factors. Those factors include
but are not limited to the risk factors noted in Axesstel's filings with the
Securities and Exchange Commission, including the need for additional working
capital; economic and political instability in developing markets served by
Axesstel; unforeseen manufacturing difficulties, unanticipated component
shortages, competitive pricing pressures and the rapidly changing nature of
technology and frequent introductions of new products and enhancements by
competitors; the competitive nature of the markets for Axesstel's products;
product and customer mix; Axesstel's need to gain market acceptance for its
products; dependence on a limited number of large customers; potential
intellectual property-related litigation; Axesstel's need to attract and
retain skilled personnel; and Axesstel's reliance on its contract
manufacturers.All forward-looking statements are qualified in their entirety
by this cautionary statement, and Axesstel undertakes no obligation to revise
or update this press release to reflect events or circumstances occurring
after this press release.

                             - Tables to follow -

AXESSTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                             
                      For the three months ended  For the year ended
                      December 31,  December 31,  December 31,  December 31,
                       2012          2011          2012          2011
                                                             
Revenues               $15,765,017 $16,888,962 $59,656,439 $54,127,742
Cost of goods sold     11,796,046   12,551,339   44,355,502   41,201,806
Gross margin           3,968,971    4,337,623    15,300,937   12,925,936
                                                             
Operating expenses                                            
Research and           632,980      769,657      2,410,377    2,287,898
development
Sales and marketing    926,461      821,468      3,191,866    3,630,570
General and            1,496,009    1,317,983    4,972,119    4,382,548
administrative
Total operating        3,055,450    2,909,108    10,574,362   10,301,016
expenses
                                                             
Operating income       913,521      1,428,515    4,726,575    2,624,920
                                                             
Interest expense, net  (204,782)    (345,141)    (1,134,661)  (1,460,930)
Other income           --           --           791,000      --
Income before income   708,739      1,083,374    4,382,914    1,163,990
tax provision
                                                             
Income tax provision   (115,387)    64,105       68,613       64,105
Net income             $824,126    $1,019,269  $4,314,301  $1,099,885
                                                             
Earnings per share:                                           
Basic                 $0.03       $0.04       $0.18       $0.05
Diluted               $0.03       $0.04       $0.16       $0.05
                                                             
Weighted average                                              
shares outstanding:
Basic                 24,145,355    23,741,607    23,982,673    23,698,013
Diluted              27,125,294    24,732,951    26,611,494    23,698,013


AXESSTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                           
ASSETS                                                      
                                                           
                                                           
Current assets:                            December 31, 2012 December 31, 2011
Cash and cash equivalents                  $1,875,487      $849,510
Accounts receivable, net                   15,198,752       8,900,508
Inventories, net                           330,000          534,000
Supplier advances                          1,738            843,076
Prepayments and other current assets       458,988          197,688
Total current assets                       17,864,965       11,324,782
                                                           
Property and equipment, net               225,021          61,578
                                                           
Other assets:                                               
Licenses, net                              53,124           90,000
Other, net                                 20,952           20,952
Total other assets                         74,076           110,952
                                                           
Total assets                               $18,164,062     $11,497,312
                                                           
                                                           
LIABILITIES AND STOCKHOLDERS' DEFICIT
                                                           
Current liabilities:                                        
Accounts payable                           $10,203,148     $12,466,142
Note payable - current, net of discount    1,850,000        --
Bank financings                            3,477,007        6,100,435
Accrued commissions                        633,000          474,455
Accrued royalties                          1,389,000        1,424,000
Accrued warranties                         350,000          636,000
Other accrued expenses and current         2,127,013        2,027,482
liabilities
Total current liabilities                  20,029,168       23,128,514
                                                           
Long-term liabilities:                                      
Note payable - long term, net of discount  5,096,000        --
                                                           
Stockholders' deficit                      (6,961,106)      (11,631,202)
                                                           
Total liabilities and stockholders'        $18,164,062     $11,497,312
deficit

Investor Relations Contact:
LHA
Cathy Mattison
(415) 433-3777
cmattison@lhai.com

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