iWeb's First Quarter Marked by Growth and Investment

iWeb Group announces first quarter 2011 financial results

MONTREAL, Feb. 23 /CNW Telbec/ - iWeb (TSXV: IWB), a global provider of Internet hosting services and IT infrastructure, today released its financial results for the first quarter (Q1) of its fiscal 2011, quarter ended December 31, 2010.

First Quarter Highlights:

  • 17% increase in revenues, from $6.9 million to $8.0 million
  • Launch of "Smart Servers"
  • Added $205,000 in monthly recurring revenue, 50% more than recurring revenues generated in the entire previous fiscal year
  • Adjusted EBITDA of $1.7 million (21% of revenues)
  • Operating loss of $956,000, net loss of $1.0 million

"Growing iWeb's revenue was one of the main priorities throughout the first quarter. Because they are recurring, these results will affect the company's results throughout the coming quarters." declared Eric Chouinard, iWeb President. "With strong sales demand for the Smart Server, iWeb's new automation technology, the first quarter represents a very constructive start to the year. 2011 should be a very exciting year for iWeb!"

"A very important indication of performance is the addition of $205,000 in recurring monthly revenue," said Philip Tousignant, Chief Financial Officer. "This represents $2.5 million annually, or 57% of the new recurring revenue generated during the previous four quarters combined. Lower gross margins and adjusted EBITDA for this quarter are mainly explained by the fixed costs related to the infrastructure of the new data center supporting the Smart Servers. The accelerated additions of new revenues coming from the Smart Servers should provide future savings in the labor costs, resulting from the automated deployment of these servers."

Selected Financial Data (in thousands of U.S. dollars, except per share amounts) 

     
    Q1 - 2011 Q1 - 2010
Revenues   $8,004 $6,864
Adjusted EBITDA1   $1,680 $1,947
Adjusted EBITDA / Revenues   21 % 28 %
Operating income (loss)   $ (956) $3
Net income (loss)   $ (1,031) $170
Income (loss) per share - basic   $ (0.0363) $0.0061
Cash flow from operating activities   $ 1,827 $1,780
       As of December 31
2010
     As of September 30
2010
Total assets   $41,006 $40,279
Long-term debt, including embedded derivatives   $22,433 $20,810
Shareholders' Equity   $5,837 $6,724
Cash and term deposits             $785 $1,081

*Refer to the "Selected financial information" section of Management's discussion and analysis (MD&A) for a description of Adjusted EBITDA.

First quarter 2011 financial review
Unless otherwise indicated, all amounts are in U.S. dollars (USD). Since September 30, 2010, the company's financial results are presented in U.S. dollars.

Revenues rose 17% year-over-year, from $6.9 million to $8.0 million. 80% of all revenues generated during the quarter were in U.S. dollars.

EBITDA of $1.7 million, approximately 21% of revenues, were lower than EBITDA of $1.9 million recorded in Q1-2010.

Compared to net income of $170 000 in the first quarter of 2010, iWeb recorded a net loss of $1.0 million for the quarter, primarily the result of an operating loss of $956,000 and unrealized foreign exchange loss on long-term debt.

The addition of $205,000 new net recurring revenue (NNRR), which is billed monthly, represents $2.5 million on an annual basis, equivalent to 57% of the $359,000 NRRN generated for all four quarters of 2010 COMBINED.

During the first quarter, iWeb acquired tangible and intangible assets totaling $3.2 million, doubling the $1.6 million for Q1-2010. The addition of new servers to support services sold during the quarter, completion of the construction of Phase I of the new data center (iWeb-NE) and significant investments in systems development, especially iWeb's proprietary "Smart Layer" platform represent the bulk of the amounts invested during the quarter.

Complete interim financial statements and Management's Discussion and Analysis (MD&A) of the company are available on http://investors.iweb.com and SEDAR (http://www.sedar.com).

About iWeb Group Inc. (iWeb.com)

iWeb provides Internet hosting services and IT infrastructure to 24,600 customers in 150 countries. With its four data centers, iWeb's total capacity has reached 34,000 dedicated servers, over 1,100 co-location cabinets and 77 Gigabits per second (Gbps) of Internet connectivity, from 9 separate providers.

One of Canada's 100 fastest growing companies according to PROFIT Magazine, iWeb now generates more than 60% of its revenues, which reached $29 million U.S. in 2010, from abroad. Founded in 1996 in Montreal, iWeb shares are traded on the TSX Venture Exchange under the symbol "IWB".

Forward Looking Statements

This release contains forward-looking statements relate to future events or iWeb's future economic performance and reflect assumptions and current expectations of management. Certain unknown factors may affect the events, financial performance and operating results. iWeb is not obligated to update or revise publicly any forward-looking statements result of new information, future events or other factors, unless applicable law requires it. The TSX Venture Exchange assumes no responsibility for the adequacy or accuracy of this release

SOURCE IWEB GROUP INC.

For further information:

http://investors.iweb.com

Philip Tousignant
Chief Financial Officer
IWeb Group Inc.
(514) 286-4242 ext 2149

Bernard Dahl
Investor Relations and Media Relations
Presentis
(514) 802-2801

Organization Profile

IWEB GROUP INC.

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