180 Connect Inc. announces 2007 year end results



    Revenue increases to a record $380 million, representing a 15% increase
    from the Prior Year

    Stock Symbols: OTCBB: CNCT.OB, CNCTU.OB, CNCTW.OB

    TORONTO and ENGLEWOOD, CO, March 31 /CNW/ - 180 Connect Inc. ("180
Connect" or the "Company") (OTCBB: CNCT.OB, CNCTU.OB, CNCTW.OB), one of North
America's largest providers of installation, integration and fulfillment
services to the home entertainment, communication, and home integration
service industries, today released its financial results for the year ended
December 31, 2007.
    Certain information contained in this news release constitutes
forward-looking information, including anticipated growth and financial
performance. See "Forward-Looking Information".

    
    Selected Financial Highlights - Year Ended December 31, 2007

    For the year ended December 31, 2007 as compared to the year ended
December 31, 2006:

    Year to Date Highlights

    -  Revenue grew to $379.8 million, an increase of $48.6 million, or
       14.7%, compared to revenue of $331.2 million in 2006.

    -  EBITDA from continuing operations (2) was $19.3 million, an increase
       of $5.8 million or 42.8% compared to $13.5 million in 2006.

    -  Total cash provided by operating activities was $1.5 million, a
       decrease of $4.8 million from the cash provided by operating
       activities of $6.3 million in 2006.

    -  Loss from continuing operations was $22.9 million, an increase of
       $14.1 million compared to a loss from continuing operations of
       $8.8 million in 2006.

    -  Net loss was $24.9 million, an increase of $10.3 million compared to a
       net loss of $14.6 million in 2006.

    -  Net loss per share for the twelve months ended December 31, 2007 and
       December 31, 2006, respectively, is as follows:

       -  Loss from continuing operations was $1.20 per share basic and
          diluted compared to a loss from continuing operations of $0.60 per
          share basic and diluted in 2006.

       -  Net loss was $1.30 per share basic and diluted compared to net loss
          of $1.00 per share basic and diluted in 2006.
    

    Peter Giacalone, President and Chief Executive Officer of the Company
stated;
    "2007 was a significant and successful year for 180 Connect. The
management team was highly focused on improving margins and rebuilding
shareholder confidence in the organization. Major initiatives included the
significant capital raise through completing the merger with Ad Venture
Partners, expanding and strengthening our relationship with our major
customers, and streamlining of the systems and processes of control and
management. Our employees continue to deliver some of the best quality and
consumer satisfaction metrics in the industry despite the challenges of
weather and geography.
    180 Connect's team delivered a 43% increase in EBITDA on 15% revenue
growth, year over year, with a strong focus on cash management and delivery.
We are also very pleased to note that DIRECTV was ranked "Highest in Customer
Satisfaction among Satellite/Cable TV Subscribers" in the southern, western
and eastern regions of the United States, according to the J.D. Power and
Associates 2007 Residential Cable/Satellite TV Customer Satisfaction Study. As
180 Connect is the primary service provider for DIRECTV's western region, I
believe that the award reflects our commitment and ability to deliver
exceptional customer service."

    2007 Highlights

    2007 financial results were strong as the Company achieved significant
revenue growth and record EBITDA from continuing operations(2). Revenue for
2007 increased to $380 million, from $331 million in 2006. This 15% increase
reflects across-the-board volume increases in satellite and cable and also
includes contribution from 180 Network Services and Digital Interiors - Home
businesses. DIRECTV volume increased 15% year over year, as they not only
continue to channel more work through the Home Service Provider Network, but
also continue to sell more advanced product. Cable revenues increased 10% year
over year as the Company continued to benefit from its investments in its
cable workforce and significant growth in the Company's Canadian operations
with Rogers Communications which increased by 60%.
    180 Connect's Network Services business reported modest top line growth
in 2007 as certain municipal fiber projects originally forecast to contribute
in 2007 have been deferred to 2008 as a result of delays in financing
associated with the current credit markets. The Company remains cautiously
optimistic that this business will provide meaningful contributions in 2008,
with the focus on its several fiber-to-the-home private developments. The
Company remains confident in the long term growth prospects for this business
and is pleased to announce an award for a $2 million airport project with the
City of San Jose, CA.
    The pace of growth in 180 Connect's Home business was moderate as a
result of the slowdown in the production home housing market. The Company will
continue to monitor this business closely and has already begun the process of
focussing its efforts on the higher end custom home and multi-dwelling unit
market which has remained fairly steady despite the deterioration in the
broader housing market. Long term, in-home technology remains an increasingly
important factor in home buying decisions, and we believe this will continue
to support the growth of the business, particularly in the higher end segment
of the housing market.
    Earnings performance for 2007 was the strongest in the history of the
Company. EBITDA from continuing operations was $20.1 million for 2007
excluding stock based compensation expense of $0.9 million, an increase of
$6.6 million or 48% year over year. On an adjusted basis excluding US listing
costs, restructuring charges and stock based compensation expense, EBITDA from
continuing operations was $21.3 million for 2007, an increase of 47% year over
year. These results were primarily attributable to underlying operational
improvements implemented in streamlining the Company's management team,
reduced insurance costs, improved inventory process and controls coupled with
volume increases. General and Administrative costs declined despite the 15%
increase in revenue. General and Administrative costs excluding stock-based
compensation as a percentage of revenue declined to 4.8% in 2007 from 5.9% in
2006 as a result of more stringent approval processes and reductions in legal
and professional fees. Both reported and adjusted EBITDA were negatively
impacted by approximately $0.4 million of earnings related to the closure of a
Networks Services operation during the fourth quarter, now reported within
discontinued operations.

    Looking Forward

    The Company set out last fall to refinance its existing debt in an effort
to supplement its liquidity and lower its borrowing costs. While the Company
continues to monitor the deteriorating debt markets, it has been able to
manage its seasonal working capital needs by lowering its costs, working with
its vendors, reducing customer chargebacks, focusing on collecting receivables
and most recently, negotiating a reduction in its required letter of credit
for its insurance obligations, freeing up its restricted cash. As such, the
Company has not pursued any of the term loan proposals received to date
largely due to the impact of increasing the cost of capital and the
requirement to issue significant additional equity. The Company believes that
its effective cash management performance will remain on track and is not
currently in the market for additional financing.
    Over the past 12 months 180 Connect has experienced significant growth.
While the Company believes it has been successful in achieving many of its
goals and positioning itself to become a dominant sector player, these efforts
are not, in the opinion of the Board of Directors, being appropriately valued
by the public markets. As such, the Board of Directors of 180 Connect has
appointed a Special Committee comprised of independent directors of the Board,
with a mandate to consider and review strategic alternatives for the Company,
including transaction proposals that have or may be received from time to
time. The Special Committee has retained investment bankers to assist in this
process and is considering a number of alternatives to improve shareholder
value. The Board of Directors has not set any deadline for completing the
review of its strategic options and may ultimately determine that its current
business plan is the best means to build and deliver shareholder value.

    Summary Results

    The following is a summary of the Company's selected consolidated data
and operating information for the twelve months ended December 31, 2007 and
2006 and should be read in conjunction with the annual audited financial
statements. The amounts presented below have been reclassified to reflect the
adjustments associated with the discontinued operations of the Company and the
reclassification of certain amounts of long term debt to the current portion
of long term debt.

    
    Selected Consolidated Financial and Operating Data:

                                 Twelve Months  Twelve Months
                                         Ended          Ended
                                   December 31,   December 31,
                                          2007           2006       % Change
                                 --------------------------------------------
    Revenue......................$ 379,767,879  $ 331,175,241          14.7%
    Direct expenses..............  341,108,774    297,073,863          14.8%
                                 --------------------------------------------
    Direct contribution
     margin (1)..................   38,659,105     34,101,378          13.4%
    General and
     administrative (a)..........   19,223,846     19,675,497         (2.3)%
    Foreign exchange (gain) loss      (124,329)        30,361       (509.5)%
    Restructuring costs..........      275,000        892,688        (69.2)%
                                 --------------------------------------------
    EBITDA (2) EBITDA............   19,284,588     13,502,832          42.8%

    Depreciation.................   12,061,858     13,398,987        (10.0)%
    Amortization of customer
     contracts...................    3,681,499      3,712,673         (0.8)%
    Other (income) expense
      Interest and loan fees.....   16,272,393     10,043,504          62.0%
      Gain on extinguishment of
       debt......................            -     (1,233,001)            -
      (Gain) loss on sale of
       investments and assets....      715,151       (726,086)      (198.5)%
      (Gain) loss on change in
       fair value of derivative
       liabilities...............    5,020,945     (1,363,936)      (468.1)%
      Other expense..............    3,579,459              -             -
                                 --------------------------------------------
    Loss from continuing
     operations before income tax
     expense (benefit)...........  (22,046,717)   (10,329,309)        113.4%
    Income tax expense (benefit).      856,576     (1,503,271)      (157.0)%
                                 --------------------------------------------
    Loss from continuing
     operations..................  (22,903,293)    (8,826,038)        159.5%
    Loss from discontinued
     operations..................   (2,039,073)    (5,762,800)       (64.6)%
                                 --------------------------------------------
    Net loss for the period......$ (24,942,366) $ (14,588,838)         71.0%
                                 --------------------------------------------
                                 --------------------------------------------
        (a)  General and administrative expense includes stock-based
             compensation of $860,035 and $91,214, for the years ended
             December 31, 2007, and December 31, 2006, respectively.


    Per Share Data
                                                Twelve Months  Twelve Months
                                                        Ended          Ended
                                                  December 31,   December 31,
                                                         2007           2006
                                                -----------------------------
    Loss per share from continuing operations
      Basic.....................................$       (1.20) $       (0.60)
      Diluted...................................$       (1.20) $       (0.60)
    Net loss per share:
      Basic.....................................$       (1.30) $       (1.00)
      Diluted...................................$       (1.30) $       (1.00)

    Weighted average number of shares
     outstanding - basic........................   19,155,718     14,641,010
                                                -----------------------------
                                                -----------------------------
    Weighted average number of shares
     outstanding - diluted......................   19,155,718     14,641,010
                                                -----------------------------
                                                -----------------------------

    Selected Consolidated Balance Sheet Data

                                                            As of
                                                  December 31,   December 31,
                                                         2007           2006
                                                -----------------------------
                                                                   (Restated)
    Cash and cash equivalents...................$     366,449  $   2,904,098
    Working capital deficit.....................   30,162,680     32,218,721
    Total assets................................  158,284,151    165,443,572
    Total debt and capital lease obligations....   56,765,878     77,355,246
    Total shareholders' equity..................$  22,211,042  $   9,402,081

     A copy of the annual audited consolidated financial statements of the
    Company for the twelve months ended December 31, 2007 is attached to this
    news release. The Company will be releasing its year end report on
    March 31, 2008 which will be available on EDGAR and the Company's
    website. Additional information relating to the Company is available on
    EDGAR at www.sec.gov/edgar.shtml, on SEDAR at www.sedar.com and on the
    Company's website at www.180connect.net.

    Non-GAAP Measures:

    (1)  The term "Direct Contribution Margin" consists of revenue less
         direct expenses and excludes general and administrative expense,
         foreign exchange loss (gain), (gain) loss on sale of investments and
         assets, depreciation, amortization of customer contracts, interest
         and loan costs, (gain) loss on change on fair value of derivative
         liabilities, gain on extinguishment of debt, other expense, and
         income tax expense (benefit). DCM, as referred to in this news
         release, is a non-GAAP measure which does not have any standardized
         meaning prescribed by GAAP and is therefore unlikely to be
         comparable to similar measures presented by other issuers.
         Management believes that this term provides a better assessment of
         the contribution of the field operations dealing directly with its
         customers' subscribers by eliminating: (1) the general and
         administrative costs that are not part of the direct costs of
         generating revenue; (2) the charge for customer contracts and
         depreciation which are non-cash expense items; and (3) (gain) loss
         on sale of investments and assets, (gain) loss on change in fair
         value of derivative liabilities, gain on extinguishment of debt, and
         other expense, which are not considered to be in the normal course
         of operating activity. Investors should be cautioned, however, that
         DCM should not be construed as an alternative to income (loss) from
         continuing operations determined in accordance with GAAP as an
         indicator of the Company's performance.

    Following is a reconciliation of DCM to the comparable GAAP measure being
net loss from continuing operations:

                                                   Year Ended     Year Ended
                                                  December 31,   December 31,
                                                         2007           2006
                                                -------------- --------------
    Direct contribution margin (1)..............$  38,659,105  $  34,101,378

    General and administrative..................   19,223,846     19,675,497

    Foreign exchange loss (gain)................     (124,329)        30,361

    Restructuring costs.........................      275,000        892,688

    Depreciation................................   12,061,858     13,398,987

    Amortization of customer contracts..........    3,681,499      3,712,673

    Interest and loan costs.....................   16,272,393     10,043,504

    Gain on extinguishment of debt..............            -     (1,233,001)

    (Gain) loss on sale of investments and
     assets.....................................      715,151       (726,086)

    (Gain) loss on change in fair value of
     derivative liabilities.....................    5,020,945     (1,363,936)

    Other expense...............................    3,579,459              -

    Income tax expense (benefit)................      856,576     (1,503,271)
                                                -------------- --------------

    Net loss from continuing operations.........$ (22,903,293) $  (8,826,038)
                                                -------------- --------------
                                                -------------- --------------

    (2)  The term "EBITDA from continuing operations" refers to loss from
         continuing operations before deducting depreciation, amortization of
         customer contracts, (gain) loss in sale of investments and assets,
         interest and loan fees, (gain) loss on change in fair value of
         derivative liabilities, gain on extinguishment of debt, other
         expense, and income tax expense (benefit). EBITDA from continuing
         operations, as referred to in this news release, is a non-GAAP
         measure which does not have any standardized meaning prescribed by
         GAAP and is therefore unlikely to be comparable to similar measures
         presented by other issuers. Management believes that EBITDA from
         continuing operations provides a better assessment of cash flow from
         the operations of the Company by eliminating: (1) the charge for
         depreciation, and amortization of customer contracts which are non-
         cash expense items and (2) (gain) loss on sale of assets, (gain)
         loss on change in fair market value of derivative liabilities, gain
         on extinguishment of debt, and other expense, which are not
         considered to be in the normal course of operating activity. In
         addition, financial analysts and investors use a multiple of EBITDA
         from continuing operations for valuing companies within the same
         sector, in order to eliminate the differences in accounting
         treatment from one company to the next. Given that the Company is in
         a growth stage, management believes the focus on EBITDA from
         continuing operations gives the investor or reader of the
         consolidated financial statements and MD&A more insight into the
         operating capabilities of management and its utilization of its
         operating assets. Management further believes that EBITDA from
         continuing operations is also the best metric for measuring
         valuation. Investors should be cautioned, however, that EBITDA from
         continuing operations should not be construed as an alternative to
         income (loss) from continuing operations determined in accordance
         with GAAP as an indicator of the Company's performance.

    Following is a reconciliation of EBITDA from continuing operations to the
comparable GAAP measure being net loss from continuing operations:

                                                   Year Ended     Year Ended
                                                  December 31,   December 31,
                                                         2007           2006
                                                -------------- --------------
    EBITDA from continuing operations (2).......   19,284,588     13,502,832

    Depreciation................................   12,061,858     13,398,987

    Amortization of customer contracts..........    3,681,499      3,712,673

    Interest and loan costs.....................   16,272,393     10,043,504

    Gain on extinguishment of debt..............            -     (1,233,001)

    (Gain) loss on sale of investments and
     assets.....................................      715,151       (726,086)

    (Gain) loss on change in fair value of
     derivative liabilities.....................    5,020,945     (1,363,936)

    Other expense...............................    3,579,459              -

    Income tax expense (benefit)................      856,576     (1,503,271)
                                                -------------- --------------

    Net loss from continuing operations.........$ (22,903,293) $  (8,826,038)
                                                -------------- --------------
                                                -------------- --------------
    

    Conference Call Information

    A live webcast of 180 Connect Inc.'s 2007 year end results earnings call
will be available at www.180connect.net. The call will begin at 5:00 p.m. EST,
March 31, 2008. The dial-in numbers for the call are international dial
617.213.8853 and toll free at 866.831.6224, participant pass code is 15653962.
The webcast will be archived on the Company's website and a replay of the call
will be available beginning at 7:00 p.m. EST on Monday, March 31, 2008 through
to 11:59 p.m. EST Monday, April 7, 2008. The dial-in numbers for the replay
are 617.801.6888 International Dial and toll free at 888.286.8010 pass code
92229639.

    180 Connect Inc.

    180 Connect Inc. is one of North America's largest providers of
installation, integration and fulfillment services to the home entertainment,
communications and home integration service industries. With more than 4,000
skilled technicians and 750 support personnel based in over 85 operating
locations, 180 Connect is well positioned as the only pure play national
residential service provider in the market. 180 Connect shares are traded
under the name of 180 Connect Inc. on the OTCBB under the symbols CNCT.OB,
CNCTU.OB and CNCTW.OB.

    Forward-Looking Information

    This news release contains forward-looking statements which reflect
management's expectations regarding the Company's future growth, results of
operations, performance and business prospects and opportunities. Statements
about the Company's future plans and intentions, results, levels of activity,
performance, goals or achievements or other future events constitute
forward-looking statements. Wherever possible, words such as "will be", "may",
"should", "could", "expect", "plan", "intend", "anticipate", "believe",
"estimate", "predict" or "potential" or the negative or other variations of
these words, or other similar words or phrases, have been used to identify
these forward-looking statements. These statements reflect management's
current beliefs and are based on information currently available to
management. Forward-looking statements involve significant risk, uncertainties
and assumptions. Many factors, including those discussed under section 1A
"Risk Factors" of the Report Form 10-K could cause actual results, performance
or achievements to differ materially from the results discussed or implied in
the forward-looking statements. These factors should be considered carefully
and prospective investors should not place undue reliance on the
forward-looking statements. Although the forward-looking statements contained
in this news release are based upon what management believes to be reasonable
assumptions, the Company cannot assure investors that actual results will be
consistent with these forward-looking statements. These forward-looking
statements are made as of the date of this news release and the Company
assumes no obligation to update or revise them to reflect new events or
circumstances, except as required by law.



    
    Consolidated Financial Statements

                               180 Connect Inc.
                         Consolidated Balance Sheets
                                 (Unaudited)

                                                  December 31,   December 31,
                                                         2007           2006
                                                -----------------------------
                                                                   (Restated)
                                                                     (Note 1)

    Assets
    Current Assets
    Cash and cash equivalents                   $     366,449  $   2,904,098
    Accounts receivable (less allowance for
     doubtful accounts of $3,750,200 and
     $2,506,637, respectively)                     48,378,339     48,934,952
    Inventory                                      20,180,167     15,816,148
    Restricted cash                                10,169,108     14,503,000
    Prepaid expenses and other assets               9,378,519      7,910,255
                                                -----------------------------
      TOTAL CURRENT ASSETS                         88,472,582     90,068,453

    Property, plant and equipment                  34,906,750     34,882,890
    Goodwill                                       11,034,723     11,034,723
    Customer contracts, net                        21,391,257     25,072,756
    Other assets                                    2,478,839      4,384,750
                                                -----------------------------
      TOTAL ASSETS                              $ 158,284,151  $ 165,443,572
                                                -----------------------------
                                                -----------------------------

    Liabilities and Shareholders' Equity
    Current liabilities
    Accounts payable and accrued liabilities    $  79,115,651  $  78,686,245
    Current portion of long-term debt              27,769,301     26,502,096
    Fair value of derivative financial
     instruments                                      122,168      4,065,729
    Current portion of capital lease obligations   11,628,142     13,033,104
                                                -----------------------------
      TOTAL CURRENT LIABILITIES                   118,635,262    122,287,174

    Income tax liability                              191,580              -
    Long-term debt                                          -     12,264,621
    Convertible debt                                        -      6,276,584
    Capital lease obligations                      17,246,267     15,213,112
                                                -----------------------------
      TOTAL LIABILITIES                           136,073,109    156,041,491

    Shareholders' Equity
    Common stock $.0001 par value; authorized
     100,000,000, at December 31, 2007 and
     December 31, 2006 issued and outstanding
     shares 25,520,152 and 14,685,976,
     respectively                                       2,552          1,469
    Paid-in capital                               130,096,083     91,871,813
    Treasury stock, 500,000 shares and zero at
     December 31, 2007 and December 31, 2006
     respectively                                    (224,019)             -
    Accumulated deficit                          (107,898,597)   (82,956,231)
    Accumulated other comprehensive income            235,023        485,030
                                                -----------------------------
      TOTAL SHAREHOLDERS' EQUITY                   22,211,042      9,402,081
                                                -----------------------------
      TOTAL LIABILITIES AND SHAREHOLDERS'
       EQUITY                                   $ 158,284,151  $ 165,443,572
                                                -----------------------------
                                                -----------------------------

    Note 1: The 2006 consolidated balance sheet has been restated to
    reclassify $20,534,422 of debt previously reported as long-term to
    current in accordance with the requirements of Emerging Issues Task Force
    Issue No. 95-22, "Balance Sheet Classification of Borrowing Outstanding
    under Revolving Credit Agreements that Include Both a Subjective
    Accelerator Clause and a Lock-Box Agreement." This restatement had no
    impact on the previously reported consolidated statements of results of
    operations, shareholder's equity and cash flows. Consolidated Financial
    Statements



                               180 Connect Inc.
                    Consolidated Statements of Operations
                                 (Unaudited)

                                    Year Ended     Year Ended     Year Ended
                                   December 31,   December 31,   December 31,
                                          2007           2006           2005
                                 --------------------------------------------
    Revenue                      $ 379,767,879  $ 331,175,241  $ 278,640,517
    Expenses
      Direct expenses              341,108,774    297,073,863    255,120,324
      General and
       administrative (1)           19,223,846     19,675,497     21,702,824
      Foreign exchange loss (gain)    (124,329)        30,361        (18,692)
      Restructuring costs              275,000        892,688      1,672,485
      Depreciation                  12,061,858     13,398,987      6,147,874
      Amortization of customer
       contracts                     3,681,499      3,712,673      4,093,985
    Other (income) expense
      Interest and loan fees        16,272,393     10,043,504      3,440,690
      Gain on extinguishment of
       debt                                  -     (1,233,001)             -
      (Gain) loss on sale of
       investments and assets          715,151       (726,086)    (6,897,291)
      Impairment of goodwill and
       customer contracts                    -              -        608,096
      (Gain) loss on change in
       fair value of derivative
       liabilities                   5,020,945     (1,363,936)             -
      Other expense                  3,579,459              -              -
                                 --------------------------------------------
    Loss from continuing
     operations before income tax
     expense (benefit)             (22,046,717)   (10,329,309)    (7,229,778)
    Income tax expense (benefit)       856,576     (1,503,271)    (2,001,727)
                                 --------------------------------------------
    Loss from continuing
     operations                    (22,903,293)    (8,826,038)    (5,228,051)
    Loss from discontinued
     operations, net of income
     taxes of zero                  (2,039,073)    (5,762,800)    (3,288,604)
                                 --------------------------------------------

    Net loss for the period      $ (24,942,366) $ (14,588,838) $  (8,516,655)
                                 --------------------------------------------
                                 --------------------------------------------

    Net loss per share from
     continuing operations:
      Basic                      $       (1.20) $       (0.60) $       (0.36)
      Diluted                    $       (1.20) $       (0.60) $       (0.36)
    Net loss per share:
      Basic                      $       (1.30) $       (1.00) $       (0.59)
      Diluted                    $       (1.30) $       (1.00) $       (0.59)

    Weighted average number of
     shares outstanding - basic     19,155,718     14,641,010     14,368,864
    Weighted average number of
     shares outstanding - diluted   19,155,718     14,641,010     14,368,864

    (1)  General and administrative includes stock-based compensation of
         $860,035, $91,214 and $1,387,133 for the years ended December 31,
         2007, December 31, 2006, and December 31, 2005, respectively.


                               180 Connect Inc.
               Consolidated Statements of Shareholders' Equity
                                 (Unaudited)

                         Common
                         Stock
                      Outstanding      Common       Paid in       Treasury
                         Shares        Stock        Capital         Stock
                      -------------------------------------------------------

      Balances at
       December 25,
       2004             14,296,622  $      1,430  $ 86,878,322  $          -

    Issuance on
     exercise of stock
     options for cash      408,847            41       728,291             -
    Share repurchase      (175,320)          (18)     (759,810)            -
    Stock-based
     compensation                -             -     1,387,133             -
    Sale of
     investment                  -             -             -             -
    Net loss                     -             -             -             -
                      -------------------------------------------------------
      Balances at
       December 31,
       2005             14,530,149         1,453    88,233,936             -
    Issuance on
     exercise of
     stock options
     for cash              155,827            16      259,696              -
    Issuance of
     warrants on
     long-term debt              -             -    3,286,967              -
    Stock-based
     compensation                -             -       91,214              -
    Net loss                     -             -            -              -
                      -------------------------------------------------------
      Balances at
       December 31,
       2006             14,685,976         1,469    91,871,813             -
    Issuance on
     exercise of
     stock options
     for cash               46,467             4        77,507             -
    Issuance on
     exercise of
     warrants for
     cash                1,200,000           120        17,140             -
    Issuance on
     exercise of
     convertible
     debt                  510,000            51     2,293,179             -
    Net proceeds
     from reverse
     merger              9,577,709           958    37,932,207             -
    Issuance costs
     attributed to
     reverse merger              -             -    (6,976,440)            -
    Stock-based
     compensation                -             -       860,035             -
    Issuance of
     warrants on
     long-term debt              -             -     2,803,296             -
    Issuance of
     warrants in
     support of
     Arrangement                 -             -       800,000             -
    Acquisition of
     net assets of AVP           -             -    (7,099,514)            -
    Reclassification
     of the Public
     Warrants                    -             -     7,516,810             -
    Purchase of
     500,000 shares
     of treasury stock    (500,000)          (50)           50      (224,019)
    Foreign currency
     translation
     adjustment                  -             -             -             -
    Net loss                     -             -             -             -
                      -------------------------------------------------------
      Balances at
       December 31,
       2007             25,520,152  $      2,552  $130,096,083  $   (224,019)
                      -------------------------------------------------------
                      -------------------------------------------------------


                                     Accumulated
                                        Other
                                    Comprehensive
                       Accumulated      Income
                         Deficit        (loss)        Total
                      -----------------------------------------

      Balances at
       December 25,
       2004           $(59,452,519) $  6,988,770  $ 34,416,003

    Issuance on
     exercise of stock
     options for cash            -             -       728,332
    Share repurchase      (398,219)            -    (1,158,047)
    Stock-based
     compensation                -             -     1,387,133
    Sale of
     investment                  -    (6,503,740)   (6,503,740)
    Net loss            (8,516,655)            -    (8,516,655)
                      -----------------------------------------
      Balances at
       December 31,
       2005            (68,367,393)      485,030    20,353,026
    Issuance on
     exercise of
     stock options
     for cash                    -             -       259,712
    Issuance of
     warrants on
     long-term debt              -             -     3,286,967
    Stock-based
     compensation                -             -        91,214
    Net loss           (14,588,838)            -   (14,588,838)
                      -----------------------------------------
      Balances at
       December 31,
       2006            (82,956,231)      485,030     9,402,081
    Issuance on
     exercise of
     stock options
     for cash                    -             -        77,511
    Issuance on
     exercise of
     warrants for
     cash                        -             -        17,260
    Issuance on
     exercise of
     convertible
     debt                        -             -     2,293,230
    Net proceeds
     from reverse
     merger                      -             -    37,933,165
    Issuance costs
     attributed to
     reverse merger              -             -    (6,976,440)
    Stock-based
     compensation                -             -       860,035
    Issuance of
     warrants on
     long-term debt              -             -     2,803,296
    Issuance of
     warrants in
     support of
     Arrangement                 -             -       800,000
    Acquisition of
     net assets of AVP           -             -    (7,099,514)
    Reclassification
     of the Public
     Warrants                    -             -     7,516,810
    Purchase of
     500,000 shares
     of treasury
     stock                       -             -      (224,019)
    Foreign currency
     translation
     adjustment                  -      (250,007)     (250,007)
    Net loss           (24,942,366)            -   (24,942,366)
                      -----------------------------------------
      Balances at
       December 31,
       2007          $(107,898,597) $    235,023  $ 22,211,042
                      -----------------------------------------
                      -----------------------------------------


                               180 Connect Inc.
                    Consolidated Statements of Cash Flows
                                 (Unaudited)

                                    Year Ended     Year Ended     Year Ended
                                   December 31,   December 31,   December 31,
                                          2007           2006           2005
                                 --------------------------------------------
    Cash provided by (used in)
     the following activities:
    Operating
    Loss from continuing
     operations..................$ (22,903,293) $  (8,826,038) $  (5,228,051)
    Add (deduct) items not
     affecting cash:
      Depreciation, amortization
       and impairment............   15,743,357     17,111,660     10,849,955
      Non-cash interest expense..    8,117,147      3,210,141        459,852
      Stock-based compensation...      860,035         91,214      1,387,133
      Deferred income taxes......            -     (1,561,031)    (1,491,941)
      Settlement of derivative
       liability.................   (2,766,573)             -              -
      Gain on extinguishment of
       debt......................            -     (1,233,001)             -
      (Gain) loss on change in
       fair value of derivative
       liabilities...............    5,020,945     (1,363,936)             -
      (Gain) loss on sale of
       investments and assets....      715,151       (726,086)    (6,897,291)
      Other......................     (177,050)          (291)         3,816
    Changes in non-cash working
     capital balances related to
     operations:
     Accounts receivable.........      556,613        227,513     (6,464,271)
      Inventory..................   (4,364,019)     4,486,519     (2,412,713)
      Other current assets.......   (1,222,516)       338,030       (688,922)
      Insurance premium deposits.      (16,195)    (6,209,037)     1,126,896
      Other assets...............     (377,949)       (37,035)       (18,928)
      Settlement of class action
       lawsuit...................            -              -     (7,973,623)
      Settlement of certain wage
       practices.................            -              -     (1,217,639)
      Restricted cash............    4,333,892        247,366     (8,696,719)
      Accounts payable and
       accrued liabilities.......       (9,660)     2,375,179     14,320,065
      Operating cash flows from
       discontinued operations...   (1,966,397)    (1,842,778)    (2,597,616)
                                 -------------- -------------- --------------
      Total cash provided by
       (used in) operating
       activities................    1,543,488      6,288,389    (15,539,997)
                                 -------------- -------------- --------------
    Investing
    Purchase of property, plant
     and equipment...............   (3,373,257)    (2,742,727)    (5,656,286)
    Net proceeds from disposition
     of investments..............            -      1,327,693     10,968,388
    Proceeds from  sale of
     property, plant and
     equipment...................            -              -        665,000
    Short-term investments.......            -              -     16,178,848
    Business acquisition.........            -              -       (429,603)
                                 -------------- -------------- --------------
    Total cash used in investing
     activities..................   (3,373,257)    (1,415,034)    21,726,347
                                 -------------- -------------- --------------
    Financing
    Repayment of capital lease
     obligations.................  (12,105,040)   (15,010,698)    (4,960,341)
    Repayment of debt............  (12,333,337)    (7,350,000)    (6,908,003)
    Proceeds from share issuance.       94,771        259,712        723,608
    Net proceeds from reverse
     merger......................   37,933,165              -              -
    Issuance costs on reverse
     merger......................   (6,976,440)             -              -
    Redemption of convertible
     debt........................  (10,393,577)             -              -
    Increase (decrease) in
     borrowings under the
     Revolver credit facility....     (101,160)      (377,494)             -
    Issuance costs on long-term
     debt........................            -     (3,546,150)             -
    Net proceeds from refinancing
     of vehicles.................    3,470,714 	2,127,542              -
    Proceeds from issuance of
     convertible debt............            -     10,686,101              -
    Proceeds from refinancing of
     long-term debt..............            -     42,140,497              -
    Extinguishment of long-term
     debt........................            -    (32,863,525)             -
    Repurchase of common stock...     (224,019)             -              -
    Repurchase of shares through
     normal course issuer bid....            -              -     (1,158,047)
    Settlement with selling
     shareholders of
     Mountain Center Inc.........            -              -     (2,950,000)
    Issuance costs paid on
     convertible debt............            -     (1,388,985)             -
                                 -------------- -------------- --------------
    Total cash provided by
     (used in) financing
     activities..................     (634,923)    (5,323,000)   (15,252,783)
                                 -------------- -------------- --------------
    Effect of exchange rates on
     cash and cash equivalents...      (72,957)           291         39,753
                                 -------------- -------------- --------------
    Net increase (decrease) in
     cash and cash equivalents
     during the period...........   (2,537,649)      (449,354)    (9,026,680)
    Cash and cash equivalents,
     beginning of period.........    2,904,098      3,353,452     12,380,132
                                 -------------- -------------- --------------
    Cash and cash equivalents,
     end of period...............$     366,449  $   2,904,098  $   3,353,452
                                 -------------- -------------- --------------
                                 -------------- -------------- --------------
    Supplemental cash flow
     information:
    Interest paid................$   8,779,371  $   6,091,487  $   2,485,035
                                 -------------- -------------- --------------
                                 -------------- -------------- --------------
    Income taxes paid............$     257,120  $     429,279  $   1,265,756
                                 -------------- -------------- --------------
                                 -------------- -------------- --------------

    Supplemental disclosure of non-cash investing and financing transactions:
    For the years ended December 31, 2007, December 31, 2006 and December 31,
    2005, the Company had additional capital lease obligations for vehicles
    of $9,080,617, $6,401,900 and $39,403,406 respectively.
    

    %SEDAR: 00025856E




For further information:

For further information: please contact the following or visit our
website at www.180connect.net. Claudia A. Di Maio, Director Investor
Relations, TEL: (866) 995-8888, DIRECT LINE: (416) 930-7710, EMAIL:
cdimaio@180connect.net; Devlin Lander, Integrated Corporate Relations, TEL.:
(415) 292-6855

Organization Profile

180 CONNECT INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890