magicJack Expects Over $0.70/ Share Operating Income in Q4

magicJack VocalTec, Ltd.

(the "Company"), the Voice Experts and cloud communications leader that invented voice over IP (VoIP) and sold over ten million magicJacks®, announces higher estimates for Q4 and full year 2012. For Q4, the Company expects to have over $0.70 per share of operating income. These estimates increased based on lower telecom expenses, higher receipts and a reduction in legal, advertising, media and other expenses. The Company had 19.3 million shares outstanding at end of Q3 2012, and cash and investments of $34.3 million. The Company has reduced share count by approximately 500,000 shares and increased cash and investments by $6 million since last quarter (Q3 2012). The Company expects to end this year with approximately 18.8 million shares outstanding and approximately $40 million in cash and investments, and continues to drastically reduce its telecom costs while increasing access charge collections. Although the Company typically focuses on GAAP numbers, it wants its investors to clearly understand that the deferred revenue liabilities reported in Q3 2012 of $127.3 million will end up having a fraction of that amount of real cash outlay. In other words, under GAAP, deferred revenue liabilities