MetroBridge Networks Announces Second Quarter 2008 Results



    VANCOUVER, Aug. 29 /CNW/ - MetroBridge Networks International Inc.
(TSX-V: MEB), a premier high-speed wireless broadband provider for business
with operations in Canada and the United States, today announced results for
the quarter ended June 30, 2008. All figures in Canadian Dollars unless
otherwise stated.

    
    Highlights

    -   Revenue increased $1.0 million reaching $1.9 million in the quarter,
        up from $0.9 million year over year and $0.4 million quarter over
        quarter
    -   Gross margin, excluding amortization, was flat at 63% of revenue year
        over year
    -   EBITDA(*) loss was $0.4 million, up $0.1 million year over year and
        down $0.3 million from $0.6 million quarter over quarter
    -   Customer Locations(*) reached 4,775 in the quarter, up from 887 year
        over year and up from 4,635 quarter over quarter
    -   Customer Churn(*) was 0.92% up from 0.89% year over year and down
        from 1.23% quarter over quarter
    -   On May 29, 2008, holders of the Company's $1.7 million in unsecured
        Convertible Debentures converted to common shares or extended the
        term of the Convertible Debentures. A total of $1.0 million in
        Convertible Debentures were converted into 6,867,616 common shares of
        the Company at $0.144 per share. Holders of the remaining portion of
        unsecured Convertible Debentures, $0.7 million, extended their
        maturity to June 29, 2009 and their conversion rights or coupon
        remained unchanged.
    

    (*)Non-GAAP Measures

    "MetroBridge's second quarter results show the strong organic growth
resulting from our continued focus on enterprise-level contracts. We're
expanding our enterprise-level network in Utah and anticipate securing
additional accretive acquisitions in the future to enter new markets," said
Dorian Banks, President and Co-Founder of MetroBridge. "We're seeing strong
demand for our growing suite of value-added products and services. They serve
as traction with existing customers and are driving new sales. We're taking
steps to bolster our operational efficiencies as we drive towards positive
EBITDA and cash flow," added Banks.

    First Quarter Financial Results

    Total revenue for the quarter ended June 30, 2008 was $1.9 million
compared with $0.9 million for the quarter ended June 30, 2007. The increase
in revenue was driven primarily by the positive impact of a full quarter of
the Utah acquisition, as well as by strong organic growth in existing markets.
    Gross margin, excluding amortization, was flat at 63% for the second
quarter of 2008 compared with the second quarter of 2007, in line with our
expectations going forward.
    Operating expenses increased to $2.0 million compared with $1.0 million
for the second quarter of 2007. The increase was due primarily to expenses
associated with additions to our sales force, administrative personnel and
infrastructure to support the Company's new Utah market, as well as corporate
costs associated with mergers and acquisitions and financing activities. We do
not expect increases in operating costs going forward until we enter another
new market, and in the interim we expect these costs to decrease.
    EBITDA loss was $0.4 million down from $0.6 million quarter over quarter
and flat year over year.
    MetroBridge reported a net loss of $2.2 million or $0.05 per share for
the second quarter of 2008, compared to a net loss of $0.6 million or $0.02
per share for the second quarter of 2007.
    As of August 29, 2008 there were 54,746,764 Class A Common Shares
outstanding.

    Outlook

    MetroBridge will continue to yield strong operational results from growth
in organic markets, continue to drive towards positive EBITDA and cash flow,
and generate opportunities for future market expansion through accretive
acquisitions.

    Conference Call

    Dorian Banks, President, and Christopher Morris, Chief Financial Officer
will hold a conference call at 8:00 a.m. PST on Thursday, September 4, 2008 to
discuss financial results and performance. Interested parties may access the
call dialing (800) 731-6941 or (416) 644-3420 (for international callers).

    Forward Looking Statements

    This press release contains certain forward-looking statements that
reflect the current views and/or expectations of MetroBridge Networks
International Inc. with respect to performance, business and future events.
Such statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly from those
disclosed herein. Investors are cautioned not to rely on these forward-looking
statements. MetroBridge Networks International Inc. does not undertake to
update these forward-looking statements.

    About MetroBridge Networks International Inc.

    MetroBridge, a leading international fixed wireless provider, delivers
broadband wireless access using WiMAX and other advanced wireless
technologies. Its highly redundant mission critical network provides
connections up to 2500Mbps in Canada and the United States. MetroBridge's
aggressive growth strategy contemplates acquisitions throughout North America
and additional complementary products and services. The Company operates in
all market segments including police and 911 services, the financial industry,
retailers and businesses of all sizes. MetroBridge was the first Canadian
carrier selected to join the WiMAX Forum(TM) to assist the industry in
establishing equipment interoperability. Please visit the Company's website at
www.metrobridge.com.

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


    METROBRIDGE NETWORKS INTERNATIONAL INC.
    Consolidated Balance Sheets
    (Expressed in Canadian dollars)

    -------------------------------------------------------------------------
                                                       June 30,  December 31,
                                                          2008          2007
                                                    (unaudited)
    -------------------------------------------------------------------------
    Assets

    Current assets:
      Cash and cash equivalents                   $    663,550  $  6,160,377
      Accounts receivable                              981,926       542,233
      Prepaid expenses and deposits                    357,312       379,669
      -----------------------------------------------------------------------
                                                     2,002,788     7,082,279

    Capital assets                                   2,077,447     1,670,565

    Assets under capital leases                      1,828,762     1,287,932

    Intangible assets                                2,586,586       169,547

    Goodwill                                         2,223,539             -
    -------------------------------------------------------------------------
                                                  $ 10,719,122  $ 10,210,323
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable, and accrued liabilities   $  1,443,036  $    985,200
      Loan payable and convertible debentures          953,830       292,049
      Current obligations under capital leases         485,875       356,729
      Current portion of long-term debt                 33,932        40,627
      -----------------------------------------------------------------------
                                                     2,916,673     1,674,605

    Obligations under capital leases                 1,186,963       896,638
    -------------------------------------------------------------------------

    Shareholders' equity:
      Share capital                                 18,763,753    15,138,926
      Equity component of convertible debenture        242,482     1,427,047
      Contributed surplus                            1,366,300     1,053,930
      Deficit                                      (13,757,049)   (9,980,823)
      -----------------------------------------------------------------------
                                                     6,615,486     7,639,080

    -------------------------------------------------------------------------
                                                  $ 10,719,122  $ 10,210,323
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Approved on behalf of the Board:

     "Martin Bajic"                       "Dorian Banks"
    ------------------                   ------------------
      Director                             Director



    METROBRIDGE NETWORKS INTERNATIONAL INC.
    Consolidated Statements of Operations, Comprehensive Loss and Deficit
    (Expressed in Canadian dollars)
    -------------------------------------------------------------------------
                      Three months ended June 30,   Six months ended June 30,
                      --------------------------- ---------------------------
                           2008          2007          2008          2007
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    -------------------------------------------------------------------------
    Revenue:

      Monthly Recurring  1,513,918       729,687     2,739,328     1,402,456
      Value added
       services             86,856        54,488       158,963        83,626
      Installation,
       activation, and
       traffic             271,799       142,763       443,383       283,460
     ------------------------------------------------------------------------
                         1,872,573       926,938     3,341,674     1,769,542

    -------------------------------------------------------------------------
    Cost of services:
      Cost of services
      (exclusive of
       amortization of
       network equipment)  684,215       344,088     1,202,309       705,846
      Amortization of
       network equipment   252,115       124,703       551,836       205,865
      -----------------------------------------------------------------------
                           936,330       468,791     1,754,145       911,711

    -------------------------------------------------------------------------
    Operating Expenses:
      Corporate office     858,933       431,348     1,651,461       822,004
      Sales and marketing  340,844       266,711       837,426       509,837
      General and
       administrative      419,155       205,489       763,831       447,417
      Amortization         277,648        73,791       332,185       140,167
      Bad debts             53,717         7,441       130,693        12,342
      -----------------------------------------------------------------------
                         1,950,297       984,780     3,715,596     1,931,767
    -------------------------------------------------------------------------

    Loss from operations 1,014,054       526,633     2,128,068     1,073,936
    -------------------------------------------------------------------------
    Other expenses
     (income):
      Interest income            -             -       (21,253)            -
      Interest expense     262,496        95,270       416,022       123,126
      Imputed debenture
       interest            909,943             -     1,226,025             -
      Exchange loss         (2,140)            -        27,365             -
      -----------------------------------------------------------------------
                         1,170,299        95,270     1,648,159       123,126
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Operating loss
     from continuing
     operations          2,184,353       621,903     3,776,227     1,197,062

    Impairment of
     network equipment
     and intangible
     assets                      -             -             -       268,399
    -------------------------------------------------------------------------

    Net Loss             2,184,353       621,903     3,776,227     1,465,461

    Deficit, beginning
     of period          11,572,696     5,537,923     9,980,823     4,962,764

    -------------------------------------------------------------------------
    Deficit, end of
     period           $ 13,757,049  $  6,159,826  $ 13,757,049  $  6,159,826
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Loss per common
     share:

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
     Basic and
      diluted         $      (0.05) $      (0.02) $      (0.08) $      (0.06)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                      Three months ended June 30,   Six months ended June 30,
                           2008          2007          2008          2007
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)

    Weighted average
     number of common
     shares:
      Basic and
       diluted          45,867,506    25,250,625    45,910,417    24,023,180
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net loss             2,184,353       621,903     3,776,227     1,465,461
     Other
     comprehensive
     income:
      Currency
      translation gain     132,513             -       132,513             -
    -------------------------------------------------------------------------
    Comprehensive loss $ 2,051,840  $    621,903  $  3,643,714  $  1,465,461
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    METROBRIDGE NETWORKS INTERNATIONAL INC.
    Consolidated Statements of Cash Flows
    (Expressed in Canadian dollars)
    -------------------------------------------------------------------------
                      Three months ended June 30,   Six months ended June 30,
                      --------------------------- ---------------------------
                           2008          2007          2008          2007
                        (unaudited)   (unaudited)   (unaudited)   (unaudited)
    -------------------------------------------------------------------------
    Operating
     activities:
      Net loss        $ (2,184,353)   $ (621,903) $ (3,776,227) $ (1,465,461)
      Items not
       involving
       cash:
        Amortization of
         capital and
         intangible
         assets            480,147       198,494       834,404       346,031
        Amortization
         of deferred
         financing costs    (9,803)            -             -             -
        Stock-based
         compensation       75,764        62,340       209,149       117,281
        Accretion interest
         on debentures      932,747             -     1,323,615             -

      Changes in non-cash
       operating
       working capital:
        Network Inventory        -       (10,407)            -           187
        Current obligation
         under capital
         lease                   -       218,890             -       255,525
        Accounts
         receivable       (277,073)     (116,863)     (496,521)     (304,137)
        Prepaid expenses
         and deposits      182,050      (447,371)       28,319      (641,948)
        Accounts payable
         and accrued
         liabilities       298,164       353,303       456,179       573,439
        Deferred revenue         -        (7,179)            -        40,147
    -------------------------------------------------------------------------
    Cash (used in)
     operating
     activities           (502,357)     (370,696)   (1,421,082)   (1,078,936)
    -------------------------------------------------------------------------

    Financing
     activities:
      Proceeds of Loan     500,000                     502,000
      Shares issued for
       cash                              (11,651)                    744,362
      Long-term debt        (4,695)    1,696,459        (6,695)    1,685,371
      Capital lease
       obligations         509,150      (192,370)      (36,326)     (236,327)
    -------------------------------------------------------------------------
    Cash from
     financing
     activities          1,004,455     1,492,438       458,979     2,193,406
    -------------------------------------------------------------------------

    Investing:
      Acquisition of
       capital
       assets             (426,913)     (266,952)     (282,042)     (334,460)
      Acquisition of
       intangible
       assets                    -        18,182             -       157,104
      Acquisition of
       assets of
       Utah Broadband
       LLC                       -             -    (4,252,682)            -
    -------------------------------------------------------------------------
    Cash (used in)
     financing
     activities           (426,913)     (248,770)   (4,534,724)     (177,356)
    -------------------------------------------------------------------------
    Decrease in Cash        75,185       872,972    (5,496,827)      937,114
    -------------------------------------------------------------------------
    Cash, beginning
     of period             588,365       753,904     6,160,377       689,762
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash, end of
     period           $    663,550   $ 1,626,876  $    663,550  $  1,626,876
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: Samantha Singh, MetroBridge Investor Relations,
Toll Free: (888) 628-1240, Direct: (604) 628-5627, Fax: (888) 628-2650,
ssingh@metrobridge.com

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