Axia on Plan for FY2007



    
    -  Net income of $16.0 million ($0.26 per share) for 2007 versus
       $16.1 million ($0.29 per share) for the prior year.

    -  North America: grew bandwidth commitments on the Alberta SuperNet from
       30 Gbps to 50 Gbps; launched three new value-added services; gross
       margin of 48 percent consistent with 2006 results.

    -  Europe: Established Covage in France; obtained 13 network DSPs to
       date.

    -  New Open Access Networks: Axia initiated participation in formal bid
       processes in Western Australia and Singapore and private discussions
       in a number of other jurisdictions.
    

    CALGARY, Sept. 19 /CNW/ - Axia NetMedia Corporation ("Axia" or the
"Corporation") today announced its annual and fourth quarter results for the
fiscal year ended June 30, 2007.

    FY 2007 Operational Highlights

    North America
    -------------
    "This year we grew our overall Alberta SuperNet bandwidth commitments by
66 percent from 30 Gbps to 50 Gbps and increased the number of service
providers with contracts from 71 to 81," said Axia's President, Geoff
Thompson. "As well, we grew non-government bandwidth commitments to 11.7 Gbps
from 1 Gbps in 2006. We are pleased that bandwidth usage and customer adoption
of the Alberta SuperNet continues to grow."
    During the past year, Axia launched three new value-added services,
AxiaSecure(TM), Axia NetManage(TM) and Axia NetMonitor(TM). These services are
basic building blocks that enable customers to harness the power of Axia's
Real Broadband(TM) service. As well, development work began on Axia OneNet
Solution(TM), which is a suite of products and services targeted at the
Alberta enterprise market.

    Europe
    ------
    In fiscal 2007, Axia entered into agreements to form Covage, a French
company jointly owned by Axia and VINCI Networks. Covage is involved in the
development and operation of Real Broadband(TM) IP networks in France. During
fiscal 2007, Covage was awarded four new long-term Délégations de Service
Public ("DSPs"), and subsequently announced that the département of Hérault
had also awarded Covage a 22-year network DSP.
    The Corporation's arrangements with VINCI Networks to date will result in
Covage owning interests in 13 private companies, referred to as DSPs, holding
long-term network operations contracts. Throughout fiscal 2008, each DSP will
be at a different stage of acquisition, construction, deployment and early
sale of services and therefore, Axia's financial results for France in any
given quarter may not be meaningfully indicative of results for subsequent
periods.
    Some départements in France are now inviting proposals using a Private
Public Partnership ("PPP") approach. This approach differs from the DSP
approach in that the département takes adoption/revenue risk and Covage
builds, operates and provides services to the département in return for a fee
structure. Covage's expertise is well suited to the PPP approach and Covage
will also compete for this business.
    As of today, the Corporation has five additional network opportunities in
process in France. By the end of calendar 2008, Axia expects that Covage will
bid on 10 to 15 new network opportunities that are of interest.

    Other Jurisdictions
    -------------------
    As a result of Axia's success in Alberta and France to date, the
Corporation is pursuing potential opportunities in other jurisdictions around
the world. Currently these opportunities consist of bid and proposal responses
in Singapore, Western Australia and several other countries. The governments
of Western Australia and Singapore are engaged in public competitive bid
processes, which are expected to draw to a conclusion in the first half of
calendar 2008. In the other jurisdictions, Axia continues to have confidential
preliminary discussions.

    FY 2007 and 4Q2007 Consolidated Financial Information

    Consolidated revenues for the year ended June 30, 2007 decreased by three
percent to $50.9 million from $52.7 million for the year ended June 30, 2006.
Current year revenues were lower as compared to fiscal 2006, which also
included the final commissioning and completion activities related to the
Alberta SuperNet. The Corporation's consolidated gross profit for the year
ended June 30, 2007 decreased marginally by $0.5 million to $24.1 million from
$24.6 million for the year ended June 30, 2006. During the year ended June 30,
2007, the Corporation's total expenses were $10.5 million as compared to $6.6
million for the year ended June 30, 2006. A primary increase in these expenses
relates to Axia's pursuit of new Open Access Network opportunities. As at June
30, 2007, consolidated net income for the year was $16.0 million ($0.26 per
common share on a fully diluted basis) as compared to $16.1 million ($0.29 per
common share on a fully diluted basis) for the year ended June 30, 2006.
    For the fourth quarter of fiscal 2007, the Corporation generated
consolidated revenues of $13.5 million as compared to $14.6 million for the
third quarter ended March 31, 2007. The decrease in revenues for the current
fourth quarter is attributable to a reduction in some value-added service
activities in Alberta, which are shorter-term in nature and fluctuate quarter
by quarter, and lower revenues from the Corporation's still-evolving French
operations.
    For the fourth quarter, net income was $1.4 million ($0.02 per common
share on a fully diluted basis) as compared to $5.0 million ($0.08 per common
share on a fully diluted basis) for the quarter ended March 31, 2007, and
$4.8 million ($0.08 per common share on a fully diluted basis) for the quarter
ended June 30, 2006. Income tax and business development expenses for the
current fourth quarter totalled $3.2 million as compared to $0.3 million for
the third quarter of 2007 and compared to a recovery of these expenses of
$1.2 million for the fourth quarter of fiscal 2006.
    During fiscal 2006 and for the first three quarters of fiscal 2007, Axia
recognized a total of $5.7 million net income related to its future income tax
assets. At the end of the third quarter of fiscal 2007, Axia had completed its
requirement to recognize the future income tax benefits. During the fourth
quarter of fiscal 2007, Axia's income tax expense was $1.4 million of which
$0.7 million was a one-time adjustment as a consequence of the Government of
Canada's change in corporate tax rates. As a result, Axia's effective tax
provision for the fourth quarter of 2007 was approximately 50 percent of net
income. Axia anticipates that its effective rate should be approximately
33 percent going forward. From a cash flow perspective, Axia has $4.8 million
of future income tax assets as at June 30, 2007 that is available for the
deferral of future cash income taxes.
    As at June 30, 2007, the Corporation's working capital was $43.1 million
as compared to $26.5 million at June 30, 2006. As at September 18, 2007, Axia
has 63.4 million common shares issued and outstanding.

    FY2008 Outlook

    In fiscal 2008 Axia's management will remain focused on its three
strategic priorities: growing bandwidth commitments on the Alberta SuperNet to
increase its gross profit contribution; developing and marketing other
services for deployment in Alberta and France; and winning and developing new
Open Access Networks in France and other jurisdictions.
    "Through fiscal 2008 shareholders will see continued business development
expenses and variations on revenues and expenses from France," said Art Price,
Chairman and CEO. "We expect to maintain a conservative financial platform as
we maximize the Corporation's opportunities and pursue growth."

    About Axia

    The Audited Consolidated Financial Statements for the year ended June 30,
2007 and related Management's Discussion and Analysis have been reviewed and
approved by the Corporation's Audit Committee and Board of Directors. These
reports have been filed on SEDAR at www.sedar.com and are also posted at
www.axia.com.
    Axia provides Real Broadband(TM) IP Services and solutions through
planning, designing and operating Open Access Next Generation Networks. Axia
trades on the Toronto Stock Exchange under the symbol "AXX". For more
information, visit its website at www.axia.com.

    Conference Call Scheduled

    Axia will host a conference call for the investment community to discuss
its fiscal 2007 and Fourth Quarter results on Thursday, September 20, 2007 at
9:30 a.m. (Eastern), 7:30 a.m. (Mountain). Mr. Price, Mr. Thompson and the
Corporation's Chief Financial Officer, Peter McKeown, will participate.
    To participate in the conference call, please dial (416) 644-3415 in
Toronto and internationally. If you are connecting from other parts of Canada,
dial 1-800-732-9307. Please call 10 minutes prior to the start of the call. 
In addition, a live webcast (listen-only mode) of the conference call will be
available at: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1987260
    Participants are invited to submit questions by email before and during
the conference call. Please send them to ir@axia.com.
    A replay of the conference call will be available at (416) 640-1917 or
1-877-289-8525, passcode 21246319 followed by the number sign from 11:30 a.m.
(EDT) Thursday, September 20, 2007 to midnight (EDT) Thursday, September 27,
2007 or through the webcast archives at www.newswire.ca.

    Forward-looking Statements: Except for historical information, this news
release may contain forward looking statements, including, without limitation,
statements containing the words "should", "believe", "anticipate", "may",
"plan", "will", "continue", "intend", "expect", "estimate" and other similar
expressions which constitute "forward-looking information" within the meaning
of applicable Canadian securities laws, which reflect Axia's current
expectations and assumptions, and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated. These forward-looking statements involve risks and uncertainties
including, but not limited to, changes in customer markets, changes in demand
for Axia's services, inability of Axia to deliver services in a timely and
cost-efficient manner, technological change, general economic conditions and
other risks detailed from time-to-time in Axia's ongoing filings with the
Canadian securities regulatory authorities which filings can be found at
www.sedar.com. Given these risks and uncertainties, readers are cautioned not
to place undue reliance on such forward-looking statements. Axia undertakes no
obligation to publicly update or revise any forward-looking statements either
as a result of new information, future events or otherwise.

    
    CONSOLIDATED BALANCE SHEETS

                                                         June 30,    June 30,
    ($000s)                                                 2007        2006
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash                                              $ 10,862    $ 16,006
      Restricted cash                                          -         162
      Short-term investments                              41,309      12,435
      Accounts receivable                                  7,623       3,224
      Prepaid expenses                                     1,527       1,511
      Future income tax asset                                  -       1,800
    -------------------------------------------------------------------------
                                                          61,321      35,138

    Technology and product development costs                 528         651
    Property and equipment                                12,666       9,114
    Goodwill                                               4,201       4,201
    Advance to joint venture                              12,932           -
    Other assets                                             719       1,009
    Future income tax asset                                4,753           -
    -------------------------------------------------------------------------
                                                        $ 97,120    $ 50,113
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities          $ 16,679    $ 6,880
      Current portion of deferred revenue                  1,197      1,280
      Current portion of lease obligation                    270        255
      Current portion of cost of excess space                 80         97
      Current liabilities of discontinued operations           -         92
    -------------------------------------------------------------------------
                                                          18,226      8,604

    Deferred revenue                                         825      1,045
    Lease obligation                                         360        630
    Cost of excess space                                     187        248

    Shareholders' equity:
      Share capital                                       47,740     23,981
      Warrants                                                 -        449
      Contributed surplus                                    702        260
      Retained earnings                                   30,885     14,896
      Cumulative translation adjustment                   (1,805)         -
    -------------------------------------------------------------------------
                                                          77,522     39,586
    -------------------------------------------------------------------------
                                                        $ 97,120   $ 50,113
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF OPERATIONS & RETAINED EARNINGS

    For the Periods ended
     June 30, 2007 and 2006

    ($000s except per share          Three Months             Year Ended
     amounts)                       2007        2006        2007        2006
    -------------------------------------------------------------------------
    Revenue                     $ 13,452    $ 12,100    $ 50,916    $ 52,663
    Cost of products and
     services sold                 7,174       6,868      26,785      28,019
    -------------------------------------------------------------------------
    Gross profit                   6,278       5,232      24,131      24,644
    Expenses
      Marketing                      325         367       1,028       1,108
      Administration                 929         900       3,161       1,903
      Business development         1,802         394       3,890       1,197
      Stock-based compensation       155          14         473          60
      Interest and finance
       charges                      (384)       (119)     (1,343)       (338)
      Depreciation and
       amortization                  881         704       3,274       2,694
    -------------------------------------------------------------------------
                                   3,708       2,260      10,483       6,624
    -------------------------------------------------------------------------
    Income before the following    2,570       2,972      13,648      18,020
      Equity loss on investees      (180)          -           -           -
    -------------------------------------------------------------------------
    Income before income tax       2,750       2,972      13,648      18,020
      Income tax recovery
       (expense)                      47           -        (189)          -
      Future income tax recovery
       (expense)                  (1,414)      1,800       2,530       1,800
    -------------------------------------------------------------------------
    Income from continuing
     operations                    1,383       4,772      15,989      19,820
      Loss from discontinued
       operations                      -           -           -      (3,745)
    -------------------------------------------------------------------------
    Net income                     1,383       4,772      15,989      16,075
    Retained earnings (deficit),
     beginning of year            29,502      10,124      14,896      (1,179)
    -------------------------------------------------------------------------
    Retained earnings,
     end of year                $ 30,885    $ 14,896    $ 30,885    $ 14,896
    -------------------------------------------------------------------------

    Net income per share from
     continuing operations
      Basic                     $   0.02    $   0.09    $   0.27    $   0.37
      Diluted                   $   0.02    $   0.08    $   0.26    $   0.35
    -------------------------------------------------------------------------

    Net income per share
      Basic                     $   0.02    $   0.09    $   0.27    $   0.30
      Diluted                   $   0.02    $   0.08    $   0.26    $   0.29
    -------------------------------------------------------------------------

    Weighted average shares
     outstanding
      Basic                       63,352      54,383      59,316      53,837
      Diluted                     62,893      56,764      60,867      56,079
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the Periods ended
     June 30, 2007 and 2006

                                     Three Months             Year Ended
    ($000s)                         2007        2006        2007        2006
    -------------------------------------------------------------------------
    Cash provided by (used in):
    Operating activities:
      Income from continuing
       operations               $  1,383    $  4,772    $ 15,989    $ 19,820
      Items not involving cash:
        Depreciation and
         amortization                881         704       3,274       2,694
        Future income tax
         (recovery)                1,513      (1,800)     (2,521)     (1,800)
        Warrant financing
         charges                       -           -           -          10
        Cost of excess space         (21)        (26)        (78)       (752)
        Stock based
         compensation                155          14         473          60
    -------------------------------------------------------------------------
                                   3,911       3,664      17,137      20,032

      Changes in non-cash
       working capital items:
        Accounts receivable       (3,579)        154      (4,399)     (1,886)
        Other receivable               -           -           -       3,660
        Prepaid expenses             347         348         (16)     (1,328)
        Other assets                  44         291         290         406
        Accounts payable and
         accrued liabilities       8,561       1,304       9,799       1,867
        Deferred revenue            (417)       (903)       (303)    (10,729)
    -------------------------------------------------------------------------
    Cash provided by continuing
     operations                    8,867       4,858      22,508      12,022
    Cash used in discontinued
     operations                        -        (361)        (92)     (3,482)
    -------------------------------------------------------------------------
                                   8,867       4,497      22,416       8,540

    Financing activities:
      Decrease in restricted cash      -       1,683         162      12,675
      Issue of common shares         112         391      22,847      11,916
      Repayment of lease
       obligation                    (66)        (61)       (255)       (248)
      Repayment of note payable        -           -           -      (4,000)
      Repayment of bank loan           -      (4,578)          -      (5,398)
    -------------------------------------------------------------------------
                                      46      (2,565)     22,754      14,945

    Investing activities:
      Short-term investments       1,014     (12,489)    (28,874)    (12,489)
      Funds provided by
       discontinued operations
       related to investing
       activities                      -           -           -        (233)
      Advance to joint venture      (261)          -     (12,932)          -
      Purchase of property and
       equipment                  (4,942)       (466)     (6,329)     (1,697)
      Technology and product
       development costs               -        (446)       (374)       (754)
      Decrease in restricted
       cash                            -           -           -       1,777
    -------------------------------------------------------------------------
                                  (4,189)    (13,401)    (48,509)    (13,396)
    -------------------------------------------------------------------------
    Effect of currency
     translation on cash
     balances and cash flows      (1,602)          -      (1,805)          -
    -------------------------------------------------------------------------
    Change in cash                 3,122     (11,469)     (5,144)     10,089
    Cash, beginning of period      7,740      27,475      16,006       5,917
    -------------------------------------------------------------------------
    Cash, end of period         $ 10,862    $ 16,006    $ 10,862    $ 16,006
    -------------------------------------------------------------------------
    

    %SEDAR: 00002394E




For further information:

For further information: please visit Axia's website at www.axia.com, or
contact: Art Price, CEO, (403) 538-4001; Geoff Thompson, President, (403)
538-4030; Peter McKeown, CFO, (403) 538-4052; Dawn Tinling, VP, Investor
Relations and Communications, (403) 538-4074

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