IP Applications Corp. Reports Q3 2007 Results and Continuing Progress



    VANCOUVER, Nov. 29 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) today
announced its quarterly and year-to-date results for the period ended
September 30, 2007.
    For the three months ended September 30, 2007 revenue was $1.9M compared
to $2.4M in the corresponding period in 2006. The net loss decreased to $197K
from $472K. EBITDA loss was $6K, an improvement over the loss of $49K in the
corresponding quarter in 2006.
    For the nine months ended September 30, 2007 revenue was $5.9M compared
to $7.2M in the corresponding period in 2006. The net loss decreased
substantially to $630K from $1.52M. EBITDA was $6K, as compared to the loss of
$284K in the corresponding period in 2006.
    John Jacobson, President and CEO said, "For a company in a turn-around
situation, IP Applications is showing positive progress - the third quarter
results show that revenue has stabilized and EBITDA remains near cash
break-even levels. However, approximately 84% of IP Applications' revenue is
invoiced in US dollars and the continued decline in the dollar's value has
masked the very real operational improvements we've accomplished over the past
year and that we continue to work on. Had the exchange rate remained at Q1
levels through Q2 and Q3, we would've reported an increase in Q3 revenue over
Q2, positive cash flow and operating results trending toward profitability in
the fourth quarter. We haven't experienced any impact from the credit crisis
or from slowing consumer spending that might affect our customers, although
several new contracts signed in the early fall have taken longer to begin
delivering revenue than was expected. We have no reason to believe that these
contracts won't soon perform as originally budgeted."

    Achievements through the first nine months of 2007:

    
    -   Fiscal year-to-date, the Company achieved positive EBITDA of $6K
        compared to the loss of $284K over the same nine-month period in
        2006. This despite the negative impact of the rapidly depreciating
        US$ which has resulted in a foreign exchange loss of $103K
        year-to-date.

    -   Gross margin improved to 44.7% year-to-date, as compared to 40.3% in
        the comparable nine-month period in 2006.

    -   Operating expenses declined 26% to $3.3M year-to-date, as compared to
        $4.4M for the same nine-month period in 2006.

    -   Net loss decreased 59% to $(630K) year-to-date from $(1.52M) in the
        comparable nine-month period in 2006.

    -   In November 2007, the Company concluded a debt settlement arrangement
        and closed a private placement which dramatically improved the
        balance sheet. The bank indebtedness, demand loan and convertible
        debentures were all extinguished and the Company expects to exit 2007
        with cash resources of at least $500K.
    

    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:


    
                                     September   June 30  March 31  December
    (000's)                           30 2007     2007      2007    31 2006
    -------------------------------------------------------------------------

    Operating Loss                       $(197)    $(247)    $(186)  $(1,361)

    Amortization                           107       122       122       322

    Stock-Based Compensation                31        60        37        48

    Write-down of Intangible assets          -         -         -       609

    Other                                   52        52        52        75
    -------------------------------------------------------------------------
    EBITDA (loss)                          $(7)     $(13)      $25     $(307)
    -------------------------------------------------------------------------
    

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

    Option grant and Stock Option Plan amendment

    The Company announces that under the existing fixed Stock Option Plan
("Plan"), it has granted an Officer and a Director options to purchase
151,000 common shares of the Company and granted employees options to purchase
an additional 600,000 common shares. All options are priced at $0.18 per
share, are exercisable for a period of 5 years and vest over a period of not
less than 18 months. This grant is subject to regulatory approval.
    The Directors have resolved to amend the Plan to increase the total
number of options reserved for issuance to 3,810,389 from 2,624,935 and to
grant Officers and Directors options to purchase 587,000 common shares of the
Company. These options are priced at $0.18 per share and may not be exercised
until shareholder approval of the amendment to the Plan is obtained at the
next AGM. Further, the Company intends to re-price 270,000 options previously
granted to employees (non-insiders). Of these, 172,000 options with an
exercise price of $0.33 per share and 98,000 options with an exercise price of
$0.55 per share will be re-priced to $0.18 per share. This re-pricing is
subject to regulatory and shareholder approval and the re-priced options may
not be exercised until such approvals are obtained.

    About IP Applications

    The Company delivers business process automation and customer care for
companies in the rapidly expanding Software-as-a-Service ("SaaS") market. IP
Applications' customers use the Company's data center and staff to run
particular segments of their business operations. While customers are left to
focus on their product marketing and technology, IP Applications solves the
end user satisfaction and subscriber management issues for them.

    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.

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