TIO Networks Corp. 2008, Q1 financial results



    Recurring Revenue increases 29%

    BURNABY, BC, Dec. 21 /CNW/ - TIO Networks Corp., owner of North America's
leading automated bill payment and financial services network, (TSX-V: TNC),
today announced operating results for the first quarter ended October 31,
2007.
    Total recurring revenue for the quarter, including transaction services
and maintenance/licensing services revenue, increased 29% and accounted for
$3,283,300 or 99% of total revenue, compared to $2,545,589 or 83% for the
quarter ended October 31, 2006. The gross profit for the quarter decreased 5%
to $1,185,985 representing a gross margin of 36%, compared to gross profit of
$1,248,010 and gross margin of 41% one year ago.
    Revenue for the quarter ended October 31, 2007 was $3,305,590, an
increase of 9% from $3,040,375 from the same period one year ago. (*)Earnings
before interest, tax, depreciation, amortization and stock-based compensation
(EBITDA) was a loss of $817,000 compared to a profit of $44,000 one year ago.
Net loss for the quarter ended October 31, 2007 was $1,770,634, compared to a
loss of $537,368 for the same period one year ago.
    Contributing to the financial results for Q1 were 1- Amortization of
property and equipment of $644,120 (compared with $421,452 in Q1 2007), 2-
Interest expenses of $139,755 compared to $146,216 in Q1 2007, 3- Research and
Development expenses of $344,583 compared to $161,502 in Q1 2007, 4- Foreign
exchange loss as a result of revaluation of the Company's US net monetary
assets of $155,956 compared to a gain of $48,279 in Q1 2007, 5- Reduced
margins in the amount of $57,000 due to foreign exchange as compared to the
same period last year, 6- Increase in operations costs to $1,972,175 compared
to $1,252,263 during the same period last year due to the additional human
resources to sustain company growth and continued start-up costs associated
with the Company's new field engineer maintenance program, 7- Decrease in
one-time revenues to $22,290 for the quarter as compared to $494,786 in the
same period last year and 8- an Increase in non-cash stock-based compensation
expense of $124,684 as compared with nil a year ago.
    In the first quarter of fiscal 2008, the Company and/or its deployment
partners shipped 46 TIO and third party owned self-service devices and signed
up or deployed 257 non-kiosk clerk assisted locations. As of October 31, 2007,
1278 of these kiosks and 1158 non-kiosk clerk assisted locations were
activated and capable of generating revenues for a total of 2,436 locations
activated and transacting.
    The following metrics are key measures on the Company's quarterly
performance in terms of deployments, transactions and profit margins:

    
    Metric                                       Clerk Assisted (TIO Express)
    -------------------------------------------------------------------------
    No. of Locations
    -------------------------------------------------------------------------
    Contracted                                                1751
    -------------------------------------------------------------------------
    Configured/Activated                                      1471
    -------------------------------------------------------------------------
    Transacted(*)                                             1158
                                                    Self-Service (TIO Kiosks)
    -------------------------------------------------------------------------
    No. of Locations
    -------------------------------------------------------------------------
    Deployed(xx)                                              1416
    -------------------------------------------------------------------------
    Installed & Transacting(*)                                1278
    -------------------------------------------------------------------------
                                              Clerk Assisted and Self-Service
    -------------------------------------------------------------------------
    Total number of locations Transacted(*)                   2436

    -------------------------------------------------------------------------
    Number of Revenue Generating
     transactions                                        1,289,342
    -------------------------------------------------------------------------
    Number of transactions under fixed fee
     contracts                                             154,656
    -------------------------------------------------------------------------
    Total Number of Transactions                         1,459,693
    -------------------------------------------------------------------------
    Transactional Revenues                             $ 3,188,431
    -------------------------------------------------------------------------
    Transactional Gross Profit                         $ 1,095,472
    -------------------------------------------------------------------------
    Gross Margin % from Trans Revenue                         34.4%
    -------------------------------------------------------------------------
    Recurring Revenues
     (transaction + fixed fee revenues)                $ 3,283,000
    -------------------------------------------------------------------------
    Quarter to Quarter Transaction Growth                        5%
    -------------------------------------------------------------------------
    Quarter to Quarter Growth in
     Transactional Gross Margin(xxx)                             1%
    -------------------------------------------------------------------------

    Notes:

    (*)    This includes all locations which have transacted over the past 6
           months
    (xx)   76% of Deployed Kiosks are Owned by TIO
    (xxx)  Gross margins were negatively impacted by the weaker US Dollar -
           the impact was 5% compared to the previous quarter. This means
           that Gross Margin growth would have been closer to 6%
    

    During and subsequent to the period under review, the Company reduced a
number of staff mostly associated with its operations and customer service
departments. The cumulative effects of this reorganization will result in a
decrease in expenses of approximately $1,000,000 per year.
    As at October 31, 2007, the Company had cash and cash equivalents of
$2,282,031 as compared to $2,336,666 three months ago and $6,794,216 one year
ago.
    "The first quarter was a continuation of where we left off at the end of
2007 with substantial network revitalization, intensive product development,
growth and overall network activity for TIO Networks," said Hamed Shahbazi,
Chairman and CEO of TIO Networks, "Initiatives such as our new API
(Application Programming Interface) has been instrumental in helping us
acquire large new distribution opportunities with negligible capital
expenditures. This now permits TIO to process on a much larger scale and on an
expanded host of devices. The Company has now completed its revitalization and
infrastructure projects and implemented cost cutting measures during and
subsequent to the quarter that should reduce expenses by one million dollars
on an annual basis. We are focused on tightly managing our resources and
determined to profitably grow our transactional revenue."

    Conference Call:

    You are invited to attend a conference call on Friday December 21 at
11:00am EST to review the financial results. The dial-in numbers are (416)
644-3420 in Toronto, or, Toll Free 1-800-732-0232. Callers should request the
TIO Networks Conference.

    About TIO Networks Corp.

    TIO Networks Corp. is North America's largest multi-retailer network of
non bank financial services for the 'cash preferred' consumer marketplace. The
Company provides safe secure access to key financial services. For more
information, please visit www.TIOnetworks.com

    The TSX Venture Exchange has not reviewed this news release and does not
    accept responsibility for its adequacy and accuracy.

    (*)EBITDA: Earnings before interest, tax, depreciation, amortization &
    stock-based compensation

    EBITDA is not a defined term under Canadian generally accepted accounting
    principles, nor does it have a standard, agreed upon meaning.
    Accordingly, the Company's EBITDA may not be directly comparable to
    EBITDA reported by other issuers. Management had determined EBITDA is a
    useful supplemental measure in evaluating the Company's performance as it
    provides investors with an indication of cash available for debt service,
    working capital needs and capital expenditures. This non-GAAP measure is
    intended to provide additional information on the Company's performance
    and should not be considered in isolation or as a substitute for measures
    of performance prepared in accordance with GAAP.





For further information:

For further information: Derek Lai, Acting CFO, TIO Networks, Tel: (604)
298-4636, Ext. 269, Toll Free: 1-888-679-3322, Email:
Derek.Lai@tionetworks.com; John Lewis, Business Development, TIO Networks,
Tel: (416) 364-2266, Email: jrlewis@TIOnetworks.com


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