With 75% revenue growth, the Internet hosting provider has surpassed its
2008 earnings total after 3 quarters
MONTREAL, Aug. 20 /CNW Telbec/ - iWeb (TSX-V : IWB), a global provider of
Internet hosting services and IT infrastructure, today released its financial
results for the quarter ended June 30, 2009. The complete interim financial
statements and management report of the Company are available on the websites
www.sedar.com and investors.iweb.com.
Third quarter highlights :
- 75 % revenue growth, totaling $7.2M in the third quarter of 2009, from
$4.1M for the same period in 2008
- Operating income 11 times greater than same quarter in 2008; $231,000
compared to $21,000 one year earlier
- Adjusted EBITDA at $1.9M for 2009; 26.4 % of revenues
- Net profit of $1M, mostly attributable to the additional unrealized
theoretical exchange gain on long-term debt in U.S. dollars
"Growth remains our priority, especially in the current economic climate"
says Eric Chouinard, iWeb President and Chairman. He adds "having said that,
our shareholders will be happy to see signs of profitability on both EBITDA
and operating income"
"Clients are adopting new technologies at the same rate as they were
twelve months ago" says Martin Leclair, President, Products and Technologies.
"However, we are noticing a much more controlled approach to expense
management from our clients, who are discontinuing certain services which they
were not using extensively. Experimental projects are a little smaller, which
is normal in the current economic context. We are working closely with our
clients to optimize their infrastructure so that they can continue
"Two important points to highlight are that revenues continue to grow and
EBITDA is kept above 25% of revenue" adds Philip Tousignant, Chief Financial
Officer. "Granted, this is the first time that iWeb's net profit has passed
the $1M mark, but that figure is theoretical, just like the losses reported in
the past two quarters were. Foreign exchange fluctuations affect the
accounting value of a large portion of our long-term debt. Operating income,
however, remains positive at over $230,000, providing a much better idea of
the company's performance, regardless of market conditions."
Third quarter Financial Review
Revenues for the third quarter ended June 30, 2009 increased by $3.1
million or 75%, compared to the same period of 2008, to reach almost $7.2
Revenues for the third quarter of fiscal 2009 originated from iWeb's
three main service offerings as follows: Dedicated servers accounted for 85%,
followed by 9% for co-location services and 6% for the shared web hosting. 78%
of iWeb revenues for the quarter were generated in U.S. dollars, a significant
advantage for the Company during the last quarter and since the beginning of
the year. Compared with the same period 12 months ago, currency fluctuations
between the Canadian dollar and the U.S. dollar have had a positive impact of
$950,000 on revenues. Without taking into account this impact, revenues still
would have increased by 52% compared to the quarter ended on June 30, 2008.
Gross profit was 47% of revenues for the third quarter of 2009, compared
to 49% for the same period of the previous year. During the past quarter, the
favourable impact of the variation of Canada/U.S. exchange rates on the gross
profit margin was more than compensated by higher payroll expenses in order to
support the sustained and rapid growth of the Company's operations.
Operating expenses for the quarter went from 48.6% of revenues in 2008 to
43.3% in 2009. This improvement is explained by lower costs for selling and
administrative expenses compared to the revenues they generate, though
compensated by a rise in interest expenses. Selling expenses decreased, from
16.5% in Q3 2008 to 15.5% of revenues for Q3 2009. Administrative expenses
decreased from 24.2% to 17.7% of revenues for the quarter. Interest expenses
increased significantly, from 7.1% to 9.6% of revenues for the third quarter.
This is caused by the increase in long-term debt in order to support the
important growth in the Company's infrastructures, the greater part of which
carries interests in U.S. currency.
iWeb's operating income for the third quarter was $231,000, compared to
$21,000 for the third quarter of 2008.
The other financial expenses represent elements which are the consequence
of external market conditions. These expenses exceeded $1M for the quarter
ended June 30, 2009. The most important element of these expenses is the
unrealized exchange loss on the long-term debt of $10 million US. At the end
of quarter ended June 30, 2009, the Canada/U.S. exchange rate was 1.16,
compared to 1.26 for the beginning of quarter, which explains the unrealized
gain of $977,000 on long-term debt.
Taking into account the impact of the other financial expenses, the
Company recorded a net profit of $1,023,000 for the third quarter of 2009,
compared to a net income of $13,000 twelve months earlier, for the quarter
ended June 30, 2008.
Key Financial Data (in thousands of Canadian dollars)
Third Quarter ended June 30
Revenues $ 7,179 $ 4,108
Gross Profit $ 3,345 $ 2,018
Operating income $ 231 $ 21
Net earnings $ 1,023 $ 13
Earnings per share - basic $ 0.0366 $ 0.0005
Adjusted EBITDA(1) $ 1,896 $ 959
As at As at
June 30, September 30,
Total assets $ 32,069 $ 29,361
Shareholders' equity $ 5,796 $ 6,122
Cash and cash equivalents $ 909 $ 3,261
1 - The Company defines Adjusted EBITDA as Earnings before financial
expenses, income taxes, depreciation and amortization, and stock-
About iWeb Group Inc.
iWeb is a worldwide provider of Internet hosting services and IT
Infrastructure, with three secure data centers in Montreal. Since 2004, the
company's compounded annual growth rate has been above 75%, making it one of
Canada's 100 fastest growing companies according to PROFIT Magazine.
Founded in 1996 in Montreal, iWeb now generates more than 60% of its
revenues from abroad; and employs over 170 full-time employees providing
Dedicated Server Hosting, Co-location and Web Hosting services to more than
21,000 customers in 150 countries. iWeb's shares are listed on the TSX Venture
Exchange (TSX-V : IWB); for more information please consult the Company's
Caution concerning forward-looking statements
This news release contains certain forward-looking statements. These
statements relate to future events or iWeb's future economic performance and
reflect the current assumptions and expectations of management. Certain
unknown factors may affect the events, economic performance and results of
operations. iWeb undertakes no obligation, and does not intend to, update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable law.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this news release.
For further information:
For further information: Philip Tousignant, iWeb Group Inc., Chief
Financial Officer, (514) 286-4242, ext.149, firstname.lastname@example.org; Bernard
Dahl, iWeb Group Inc., Director, Communications and Public Relations, (514)