iWeb reports revenue increase of 94% in the second quarter; EBITDA of $2 million



    MONTREAL, May 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 March 31, 2009. The complete interim financial
statements and management report of the Company are available on the websites
www.sedar.com and www.iweb.com.

    
    Second Quarter Highlights:
    --------------------------

    - Growth in revenues of 94%, from $3.6 million to $6.9 million for the
      second quarter ending March 31, 2009, compared to the same period in
      2008
    - Adjusted EBITDA of almost $2.0 million for 2009, i.e. 28.5% of revenues
    - Operating income of $324,000, compared to $6,000 for the same period of
      the preceding year
    - Net loss of $246,000, following the additional unrealized theoretical
      exchange lost on long-term debt denominated in U.S. dollars
    

    "Our revenue growth is still continuing on the trend of the first quarter
with an increase of more than 90% over last year." said Eric Chouinard, iWeb
President and CEO. "In addition, profitability in terms of operation is
demonstrated, as indicated by the operating income of more than $300,000 for
the last quarter. EBITDA reaches almost $2 million, at nearly 30% of revenues.
These are many factors showing the strength of our operations".
    "Monthly revenues reach the $2.4 million number for the month of March
2009. But, we have to work harder in order to keep that trend, given the
current economic context. We noticed a slowdown in the level of our new net
recurring revenues for the last few months, due to the increase in our churn
rate. This increase in churn is mainly attributable to present customers who
are downsizing their level of services, in order to adjust to the difficult
financial times. We believe that these customers will reorder these services
when the economy is back on tracks." adds Martin Leclair, President, Products
and Technology.
    "In spite of the strong improvement of our operations in terms of
profitability, it is still not apparent on our net results." indicates Philip
Tousignant, Chief Financial Officer. "Once again, due to financial expenses
resulting from external market conditions totalling $560,000 for the last
quarter, we are reporting yet another net loss. The main element of these
financial expenses is the unrealized exchange loss on the long-term debt of
$10 million US."

    Second quarter Financial Review
    -------------------------------

    Revenues for the second quarter ended March 31, 2009 increased by $3.4
million or 94%, compared to the same period of 2008, to reach almost $6.9
million.
    Revenues for the second quarter of fiscal 2009 originated from iWeb's
three main service offerings as follows: Dedicated servers accounted for 85%,
followed by 8% for co-location services and 7% 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, as the impact of the
decrease in value of the Canadian dollar against the U.S. dollar compared to
the same period of last year, had a positive impact of more than $1.0 million
on revenues. Without taking into account this impact, revenues would have
increased by 65% compared to the quarter ended on March 31, 2008.
    Gross profit was 51% of revenues for the second quarter of 2009 compared
to 53% for the same period of the previous year. The favourable impact of the
variation of Canada/U.S. exchange rates on gross profit margin for the last
quarter was more than compensated by higher payroll expenses in order to
support the sustained high growth of the Company's operations.
    Operating expenses for the quarter went from 52.1% of revenues in 2008 to
46.3% in 2009. This improvement is explained by lower costs compared to the
revenues for selling and administrative expenses, but compensated by a rise in
interest expenses. Selling expenses decreased from 17.3% to 15.3% of revenues
for the quarter ended March 31, 2009. Administrative expenses decreased from
26.0% to 20.2% of revenues for the quarter ended March 31, 2009. Interest
expenses increased significantly (from 7.2% to 10.9% of revenues for the
second quarter of 2009). This is caused by the increase in long-term debt in
order to support the important addition of the infrastructures of the Company,
the greater part of which carry interests in U.S. currency.
    The operating income of the Company was $324,000 for the quarter ended
March 31, 2009, compared to $6,000 for the corresponding period of the
preceding year.
    The other financial expenses represent elements which are the consequence
of the external conditions of the market. These expenses amounted to $560,000
for the last quarter ended March 31, 2009. The most important element of these
expenses is the unrealized exchange loss on the long-term debt of $10 million
US. For the end of quarter ended March 31, 2009, the Canada/U.S. exchange rate
was 1.26, compared to 1.225 for the beginning of quarter, explaining the
unrealized loss of $356,000.
    Taking into account the impact of the other financial expenses, the
Company recorded a net loss of $246,000 for the second quarter of 2009,
compared to a net income of $19,000 for the quarter ended March 31, 2008.

    
    Key Financial Data (in thousands of Canadian dollars)
    -----------------------------------------------------

                                               Second Quarter ended March 31
                                                        2009            2008

    Revenues                                        $  6,933        $  3,575
    Gross Profit                                    $  3,545        $  1,897
    Operating income                                $    324        $      6
    Net earnings (loss)                            ($    246)       $     19
    Earnings (loss) per share - basic              ($ 0.0088)       $ 0.0007
    Adjusted EBITDA(1)                              $  1,978        $    810

                                                       As at           As at
                                                    March 31,   September 30,
                                                        2009            2008

    Total assets                                    $ 31,268        $ 29,361
    Shareholders' equity                            $  4,662        $  6,122
    Cash and cash equivalents                       $  1,318        $  3,261

    1- The Company defines Adjusted EBITDA as Earnings before financial
       expenses, income taxes, depreciation and amortization, and stock-based
       compensation.
    

    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
website: http://about.iweb.com

    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.
    %SEDAR: 00018802EF




For further information:

For further information: Philip Tousignant, Chief Financial Officer,
iWeb Group Inc., (514) 286-4242 ext. 149, ptousignant@iweb.com; Bernard Dahl,
Director, Communications and Public Relations, iWeb Group Inc., (514)
802-2801, bdahl@iweb.com

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iWeb Group Inc.

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