iWeb Announces Second Quarter 2011 Financial Results

MONTREAL, May 30, 2011 /CNW Telbec/ - iWeb (TSXV: IWB), a global provider of Internet hosting services and IT infrastructure, today released its financial results for the second quarter (Q2) of its fiscal 2011, ended March 31, 2011.

Second Quarter Highlights:

+  21% increase in revenues, from $7.1 million to $8.6 million
+ Addition of $408,000 in new net monthly recurring revenue after 6 months, already 14% higher than all recurring revenues generated during fiscal 2010.
+ Adjusted EBITDA of $1.6 million (18% of revenues)
+ Operating loss of $1.1 million, net loss of $1.1 million
+ Received a non-binding offer to purchase 100% of iWeb shares at a price of $1.50 per share, followed by a privatization agreement on May 3rd, 2011
(http://blog.iweb.com/en/2011/05/iweb-announces-agreement-to-privatize-the-corporation-for-a-cash-consideration-of-1-50-per-common-share/7477.html )

"The second quarter has been an eventful one for iWeb, rich with challenges; iWeb must continue to focus on growth, all the while delivering profitable results," said Eric Chouinard, iWeb President and CEO. "Smart Servers", which use the new automation technology developed by iWeb, already account for 8% of revenue - a positive trend towards the reconciliation of revenue growth and profitability in the coming quarters."

"The net loss incurred during the period is due in part to high financial expenses, and highlights the need to combine revenue growth while containing costs and improving operational efficiencies to return to a positive bottom line as quickly as possible", added Chouinard, who co-founded iWeb with Martin Leclair in 1996. "Recent developments regarding iWeb ownership aim to decrease the Company's debt burden, enabling better focus on core activities, including developing new technologies, increasing market share, and a swift return to profitability."

Selected Financial Data (in thousands of U.S. dollars, except per share amounts) 

     
    Q2 - 2011   Q2 - 2010
Revenues   $8,636   $7,134
Adjusted EBITDA1   $1,596   $2,019
Adjusted EBITDA / Revenues   18 %   28 %
Operating income (loss)   $(1,118)   $225
Net income (loss)   $(1,112)   $374
Income (loss) per share - basic   $(0.0392)   $0.0133
Cash flow from operating activities   $2,086   $1,462
  *Refer to the "Selected financial information" section of Management's discussion and analysis (MD&A) for a description of Adjusted EBITDA.

Second quarter 2011 financial review

Unless otherwise indicated, all amounts are in U.S. dollars (USD). Since September 30, 2010, the Company's financial results are presented in USD.

  • Revenues rose 21% year-over-year and 8% quarter-to-quarter, to $8.6 million - 80% of which are in USD.
  • EBITDA of $1.6 million, representing 18% of revenues, was lower than EBITDA of $2.0 million recorded in Q2-2010.
  • Net loss of $1.1 million, due mostly to financial expenses and unrealized exchange loss on long-term debt incurred during the quarter, down from $374,000 profit recorded in Q2-2010.
  • Future revenue: $202,000 in new net recurring revenue (NNRR) were added during the quarter. Billed monthly, this represents $2.4 million on an annual basis. 6 months into Fiscal 2011, total NNRR was $408,000, or $4.9 million on an annual basis - 14% better than the $4.6 million in NNRR generated for all four quarters of 2010.
  • Smart server, Smart Layer and investments
    Launched in October 2010, the Smart Server already accounts for 8% of iWeb revenue. The addition of 1,000 new servers, completion of the first phase of the iWeb-NE data center, and significant investments in systems development, particularly iWeb's proprietary "Smart Layer" platform, represent the bulk of the amounts invested during the quarter.

Complete interim financial statements and Management's Discussion and Analysis (MD&A) are available on the Company's website (http://investors.iweb.com) and on SEDAR (http://www.sedar.com).

About iWeb.com (iWeb.com)

iWeb is a worldwide provider of Internet hosting services and IT infrastructure. Operating four data centers, iWeb has a capacity of 34,000 dedicated servers, over 1,100 colocation racks and Internet capacity of 77 Gbit/s, divided between nine providers.

One of the 100 fastest growing companies in Canada according to PROFIT magazine, iWeb takes more than 60% of its revenues from abroad. With revenues of US$29 million in 2010, iWeb provides services to more than 25,000 customers in 150 countries. Founded in 1996 in Montreal, iWeb is listed on the TSX Venture Exchange under the symbol "IWB".

Forward Looking Statements
This release contains forward-looking statements relate to future events or iWeb's future economic performance and reflect assumptions and current expectations of management. Certain unknown factors may affect the events, financial performance and operating results. iWeb is not obligated to update or revise publicly any forward-looking statements result of new information, future events or other factors, unless applicable law requires it. The TSX Venture Exchange assumes no responsibility for the adequacy or accuracy of this release

SOURCE IWEB GROUP INC.

For further information:

Information: http://investors.iweb.com  
Philip Tousignant
Chief Financial Officer
iWeb Group Inc.
(514) 286-4242 ext. 2149
Bernard Dahl
Investor Relations and Media Relations
Presentis
(514) 802-2801

 

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IWEB GROUP INC.

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