IP Applications Corp. narrows loss in the 2006 fiscal year



    VANCOUVER, April 30 /CNW/ - IP Applications Corp. (TSX-Venture: IPX)
today announced its quarterly and financial year end results for the periods
ended December 31, 2006.
    For the year ended December 31, 2006 revenue was $9.3 million, an 18%
increase compared to $7.9 million for the twelve-month period ended
December 31, 2005, and the net loss decreased 10% to $(2.9) million from
$(3.5) million. Significantly, the EBITDA loss was $(0.6) million, a 58%
decrease from the previous period.
    For the quarter ended December 31, 2006 revenue was $2.1 million compared
to $2.3 in the corresponding period in 2005. The net loss decreased 14% to
$(1.4) million from $(1.6) million. EBITDA loss was $(0.3), a 37% decrease
from $(0.5) million in the corresponding quarter in 2005.
    John Jacobson, President and CEO said, "We are building IP Applications
into a platform for future growth, based on products that use our broad base
of technology and services, to capitalize on emerging market opportunities.
The first stage was getting the base business of the Company operating
efficiently and delivering a level of performance that would limit the need
for cash injections to sustain operations. To achieve this, we concentrated
time and resources on growing profitable segments of the business, we reduced
costs and we ended unprofitable contracts whenever we could. These efforts had
a dramatic impact on the Company's EBITDA loss, cutting it by more than half
from $(1.4) million in 2005 to $(0.6) million.
    This was all achieved in an environment that was very challenging. The
exchange rate continued to move against us, and customer attrition and a few
unplanned departures meant that we were unable to achieve complete operating
cash self-sufficiency. Nevertheless, we're much closer and we're continuing to
work toward it. Meanwhile, we've begun the second stage of IP Applications'
evolution: developing and marketing new products in 2007, and investigating a
number of exciting new growth opportunities.
    The first of the three new 2007 products is Voyager
Software-as-a-Service, the company's internal trouble-ticketing and customer
support software application modified and delivered to outside customers as a
web-based service. The second is MyHelpDesk(TM), a service product to solve
customer computer problems over the internet using remote desktop technology.
The third, Affinipower, is a custom application and related web commerce
portal that helps multi-level marketing companies reduce customer attrition
and enhance revenue. In addition to these new offerings, we've been adding
more internet service offerings to our product mix. Soon we will be
introducing VoIP services, DSL, video email, online security and data backup
products to provide the right Internet product stack for our customers."

    
    Achievements in 2006:

    -  Reduced the net EBITDA loss in 2006 by $0.8 million relative to 2005
    -  Negotiated cost savings in the fourth quarter in respect of network
       traffic, resulting in annualized savings of approximately
       $0.45 million
    -  Reduced overhead by concentrating on larger contract opportunities.
       The Company's revenue per contract increased by 45% and revenue per
       full-time equivalent (FTE) staff improved by 6% relative to 2005
    -  Reformulated our Help Desk strategy from purely technical support for
       Internet Service providers (ISP's) to delivering "customer care"
       programs for Microsoft and Re/Max.
    -  Raised gross proceeds of $0.5 million through two private placements
    

    Non-GAAP measures

    EBITDA is a key measure used by management to evaluate the Company's
performance. Management believes that EBITDA is useful as it provides an
indication of the results generated by the Company's business activities prior
to taking into consideration how those activities are financed and taxed and
also prior to taking into consideration asset depreciation and other non-cash
expenditures. EBITDA is not a recognized measure under Canadian GAAP, and
accordingly, investors are cautioned that EBITDA should not be construed as an
alternative to net earnings or loss determined in accordance with GAAP as an
indicator of the financial performance of the Company or as a measure of the
Company's liquidity and cash flows. EBITDA may not be comparable to similar
measures presented by other issuers. The schedule below details how IP
Applications reconciles its net loss per GAAP to EBITDA for the most recent
four quarters:

    
                       December 31   September 30      June 30      March 31
    (000's)                   2006          2006          2006          2006
    -------------------------------------------------------------------------
    Operating Loss         $(1,361)      $  (472)      $  (640)      $  (411)
    Amortization               322           318           318           312
    Stock-Based
     Compensation               48            88            83            79
    Write-down of
     Intangible assets         609             -             -             -
    Other                       75            17            18             6
    -------------------------------------------------------------------------
    EBITDA                 $  (307)      $   (49)      $  (221)      $   (14)
    -------------------------------------------------------------------------
    

    Additional details on the quarterly and year end results, including the
audited Consolidated Financial Statements and Management Discussion and
Analysis, are available at www.sedar.com under IP Applications Corp.

    Option grant

    The Company further announces that an officer has been granted options to
purchase 150,000 common shares of the Company at $0.28 per share for a period
of five years. The grant is subject to regulatory approval.

    About IP Applications

    IP Applications Corp. supports clients that are bringing online products,
services, content and Internet access to market. The Company provides a
flexible combination of technology, systems and expertise for customers who
have identified channels and products but who lack the delivery and support
capabilities. IP Applications' integrated Operational Support System (OSS) and
Customer Care help desk services dramatically reduce the cost, complexity and
time to market for online products and services.

    Forward-Looking Statements

    This press release may contain forward-looking statements. Actual events
or results may differ materially from those described in the forward-looking
statements due to a number of risks and uncertainties. Forward-looking
statements are based on management's estimates, beliefs, and opinions. The
company assumes no obligation to update forward-looking statements.

    The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.





For further information:

For further information: Richard Topham, CFO, D (604) 630-5657, E
rtopham@ipapplications.com

Organization Profile

IP APPLICATIONS CORP.

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