MetroBridge Networks Announces Second Quarter 2007 Results
VANCOUVER, Aug. 28 /CNW/ - MetroBridge Networks International Inc.
(TSX-V: MEB), a premier high-speed wireless broadband provider for business
with operations in Canada and the United States, today announced results for
MetroBridge Networks Corporation for the second quarter ended June 30, 2007.
Highlights:
- Revenue up 97% year-over-year to $926,938 for the second quarter -
annualized revenue of $3.9 million at quarter-end
- ARPU(*) up 7% to $350 from the first quarter
- Sales of Value-added Services up 175% from the first quarter, now
represent 6% of revenue
- Customer Locations reached 885 in the quarter, up 137% year-over-year
- Churn(*) at 0.89% for the quarter
- Closed $9 million public offering on the TSX Venture Exchange on
July 26th, 2007
(*) See Non-GAAP Measures
"MetroBridge's second quarter results show the strong organic growth
resulting from our focus on increasing ARPU through larger, higher-bandwidth
contracts, and the rapid development of our portfolio of value-added products
and service," said Dave King, President and Chief Executive Officer. "During
the quarter we continued to invest in the required infrastructure to grow in
our existing markets and a successful public offering has set the stage for
executing our systematic acquisition strategy."
Second Quarter Financial Results:
Total revenue for the second quarter ended June 30, 2007 was $926,938
compared with $471,528 for the second quarter ended June 30, 2006. The
increase in revenue was driven by increased ARPU and net customer additions of
512. Value-added services revenue, a new revenue stream for the company within
the last year, grew to $175% and now represents 6% of revenue.
Gross margin increased to 63% for the second quarter of 2007 compared
with 59% for the second quarter of 2006. The increase in gross margin is due
to the increased efficiencies that we have experienced in bandwidth usage and
other fixed costs as we have grown our network and customer base.
Sales, general and administrative (SG&A) expenses increased by 3% to
$825,578 from the first quarter, and 31% compared with $645,846 for the second
quarter of 2006. The increase was primarily due to expenses associated with
the growth of our sales force, administrative personnel and infrastructure as
we prepared the company for continuing expansion.
EBITDA increased by 18% to $(328,139) for the second quarter of 2007
compared with $(399,978) for the second quarter of 2006. The increase in
EBITDA was driven largely by the rising contribution from Vancouver
operations.
MetroBridge reported a net loss of $621,903 or $0.02 per share for the
second quarter of 2007, compared to a net loss of $479,802 or $0.03 per share
for the second quarter of 2006.
During the quarter MetroBridge raised $1.7 million through a convertible
debenture financing. Additionally, on July 26, 2007 MetroBridge completed its
previously announced amalgamation with Huntingdon Capital, and raised
$9 million through a concurrent public offering.
Outlook
"MetroBridge's business model is underpinned by the annuity-like nature
of its recurring revenue base, the continuing growth in businesses' need for
bandwidth, and the capital cost advantages of wireless broadband solutions,"
said Dave King, President and Chief Executive Officer. "Through the balance of
2007 and beyond, we plan to continue to execute on our strategy of North
American acquisitions combined with aggressive organic growth. To drive
organic growth, we intend to grow our suite of value-added products and
services, with the aim of increasing ARPU and ensuring customer retention.
Additionally, we intend to continue to pursue larger enterprise-level
contracts and grow our direct sales force."
Conference Call
President and Chief Executive Officer Dave King and Chief Financial
Officer Christopher Morris will hold a conference call at 1:30 pm Pacific Time
on Tuesday, August 28, 2007, to discuss financial results and performance.
Interested parties may access the call dialing (800) 732-9307 or (416)
644-3420 (for international callers).
A telephonic replay of the conference call may be accessed until
September 13, 2007, by dialing (877) 289-8525 or (416) 640-1917 (for
international callers) using pass code 21243621 followed by the number sign.
(*) Non-GAAP Measures
ARPU is the average revenue per user per month, calculated by dividing
the average number of customers by the total average revenue (excluding
interest) for the period.
Churn represents the monthly recurring revenue lost during the period
attributable to customers who had been with the company for greater than
90 days, as a percentage of total revenue (excluding interest) for the period.
Forward Looking Statements
This press release contains certain forward-looking statements that
reflect the current views and/or expectations of MetroBridge Networks
International Inc. with respect to performance, business and future events.
Such statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly from those
disclosed herein. Investors are cautioned not to rely on these forward-looking
statements. MetroBridge Networks International Inc. does not undertake to
update these forward-looking statements.
About MetroBridge Networks International Inc.
MetroBridge, a leading international fixed wireless provider, delivers
broadband wireless access using pre-WiMAX and other advanced wireless
technologies. Its highly redundant mission critical network provides
connections up to 2500Mbps in Arizona and British Columbia. MetroBridge's
aggressive growth strategy contemplates acquisitions throughout North America
and additional complementary products and services. The company operates in
all market segments including police and 911 services, the financial industry,
retailers and businesses of all sizes. MetroBridge was the first Canadian
carrier selected to join the WiMAX Forum to assist the industry in
establishing equipment interoperability. Please visit the Company's website at
www.metrobridge.com
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
METROBRIDGE NETWORKS CORPORATION
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
(Unaudited)
June 30 December 31
2007 2006
------------ ------------
ASSETS
Current
Cash $ 1,626,876 $ 689,762
Accounts receivable 645,288 341,150
Network inventory 384,542 384,729
Deferred share issue costs 374,436 -
Deferred finance costs 170,448 -
Prepaid expenses and deposits 142,005 44,941
-------------------------------------------------------------------------
3,343,595 1,460,582
Capital Assets 1,328,912 1,318,872
Assets under Capital Lease 733,960 187,326
Intangible Assets 330,637 492,926
-------------------------------------------------------------------------
$ 5,737,104 $ 3,459,706
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ 997,716 $ 424,276
Loans payable 250,000 755,250
Convertible debenture 1,714,000 -
Deferred revenue 81,828 41,680
Obligations under capital lease payable
within the next year 320,281 64,756
Current portion of long term debt 52,339 58,252
-------------------------------------------------------------------------
3,416,164 1,344,214
Obligations under capital lease 435,730 108,998
Long term debt 522,112 39,578
-------------------------------------------------------------------------
4,374,006 1,492,790
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Share capital 7,188,424 6,444,062
Contributed surplus 334,500 217,219
Deficit (6,159,826) (4,694,365)
-------------------------------------------------------------------------
1,363,098 1,966,916
-------------------------------------------------------------------------
$ 5,737,104 $ 3,459,706
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Approved By The Board
"Martin Carsky" Director
-----------------
"Rennie Heel" Director
-----------------
METROBRIDGE NETWORKS CORPORATION
Interim Consolidated Statements of Loss
(Expressed in Canadian dollars)
(Unaudited)
Three months ended Six months ended
June 30 June 30
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
REVENUE
Network $ 839,869 $ 440,087 $ 1,607,263 $ 820,386
Installation 69,139 30,402 121,543 59,697
Other 17,930 1,039 40,736 2,751
-------------------------------------------------------------------------
926,938 471,528 1,769,542 882,834
-------------------------------------------------------------------------
COST OF SALES
Network 320,987 177,992 653,439 313,602
Installation 21,895 11,916 46,392 19,726
-------------------------------------------------------------------------
Cost of sales
(exclusive of
amortization of
network equipment
of $124,703,
$32,827, $205,865,
and $37,816) 342,882 189,908 699,831 333,328
Amortization of
network equipment 124,703 32,827 205,865 37,816
-------------------------------------------------------------------------
467,585 222,735 905,696 371,143
-------------------------------------------------------------------------
OPERATING EXPENSES
Corporate office 377,222 325,449 721,244 513,231
Sales and marketing 265,757 215,191 505,385 355,313
Salaries and benefits 60,404 20,010 133,660 44,002
General and
administrative 145,085 85,156 313,757 145,224
Share-based
compensation 56,286 35,792 111,227 71,216
Amortization 73,791 28,675 140,167 76,408
Interest 95,270 18,322 123,126 27,701
Bad debts 7,441 - 12,342 (4,922)
-------------------------------------------------------------------------
1,081,256 728,595 2,060,908 1,228,173
-------------------------------------------------------------------------
OPERATING LOSS FROM
CONTINUING OPERATIONS (621,903) (479,802) (1,197,062) (716,482)
Impairment of Network
Equipment and
Intangible Assets - - 268,399 -
-------------------------------------------------------------------------
NET LOSS $ (621,903) $ (479,802) $(1,465,461) $ (716,482)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic Loss per Share
from Continuing
Operations $ (0.02) $ (0.03) $ (0.06) $ (0.04)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic Loss per Share $ (0.02) $ (0.03) $ (0.06) $ (0.04)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted Average
Number of Shares
Outstanding 25,250,625 16,771,768 24,747,510 16,442,410
-------------------------------------------------------------------------
-------------------------------------------------------------------------
METROBRIDGE NETWORKS CORPORATION
Interim Consolidated Statements of Deficit
(Expressed in Canadian dollars)
(Unaudited)
Three months ended Six months ended
June 30 June 30
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
OPERATING LOSS FROM
CONTINUING
OPERATIONS $ (621,903) $ (479,802) $(1,465,461) $ (716,482)
-------------------------------------------------------------------------
NET LOSS (621,903) (479,802) (1,465,461) (716,482)
DEFICIT, BEGINNING
OF PERIOD (5,537,923) (3,278,783) (4,694,365) (3,042,103)
-------------------------------------------------------------------------
DEFICIT, END OF
PERIOD $(6,159,826) $(3,758,585) $(6,159,826) $(3,758,585)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
METROBRIDGE NETWORKS CORPORATION
Interim Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
(Unaudited )
Three months ended Six months ended
June 30 June 30
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Cash Flows From
Continuing Operating
Activities
Loss from continuing
operations $ (621,903) $ (479,802) $(1,465,461) $ (716,482)
Items not involving
cash:
Amortization 198,494 61,501 346,031 114,224
Share-based
compensation 62,340 35,792 117,281 71,216
Changes in non-cash
operating working
capital:
Accounts receivable (116,863) (17,900) (304,137) 9,505
Network inventory (10,407) (71,311) 187 (200,115)
Prepaid expenses and
deposits (447,371) 3,652 (641,948) (3,172)
Current obligation
under capital lease 218,890 (26,366) 255,525 36,285
Accounts payable and
accrued liabilities 353,303 (1,548) 573,439 (145,374)
Deferred revenue (7,179) (1,710) 40,147 (10)
-------------------------------------------------------------------------
(370,696) (497,692) (1,078,936) (833,923)
-------------------------------------------------------------------------
Cash Flows From
Financing Activities
Shares issued for cash (11,651) 267,225 744,362 621,200
Loans 1,696,459 505,250 1,685,371 501,129
Payments made on
capital lease (192,370) (652) (236,327) (63,580)
-------------------------------------------------------------------------
1,492,438 771,823 2,193,406 1,058,749
-------------------------------------------------------------------------
Cash Flows From
Investing Activities
Cash consideration paid
for capital assets (266,952) (172,394) (334,460) (256,724)
Cash consideration paid
for intangible assets 18,182 (202) 157,104 (3,006)
Proceeds from asset sold
and leased back - - - -
-------------------------------------------------------------------------
(248,770) (172,596) (177,356) (259,730)
-------------------------------------------------------------------------
Increase in Cash from
Continuing Operations 872,972 101,536 937,114 (34,904)
-------------------------------------------------------------------------
Increase in Cash 872,972 101,536 937,114 (34,904)
Cash, Beginning of
period 753,904 44,065 689,762 180,505
-------------------------------------------------------------------------
Cash, End of period $ 1,626,876 $ 145,601 $ 1,626,876 $ 145,601
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental Information
on Non-Cash Transactions
Acquisition of assets
under capital lease (544,878) - (658,346) -
For further information: Samantha Singh, MetroBridge Investor Relations,
Toll Free: (888) 628-1240, Direct: (604) 628-5627, Fax: (888) 628-2650,
ssingh@metrobridge.com
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