TIO Networks Corp. 2008, Q3 financial results



    
    - 27% increase in Transactions offsets losses due to
      Currency Devaluation -
    

    BURNABY, BC, June 24 /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 third quarter ended April 30, 2008.
    The number of revenue generating transactions increased 27% to 1,415,220
compared to 1,114,860 for the same period last year and improved by 36,817
transactions or 3% over the previous quarter.  Total recurring revenue for the
quarter, including transaction services and maintenance/licensing services
revenue, increased 3% and accounted for $3,441,953 or 98% of total revenue,
compared to $3,355,835 or 92% for the quarter ended April 30, 2007. The gross
profit on recurring revenue for the quarter decreased 8.9% to $1,218,440,
compared to gross profit of $1,337,605 for the same period one year ago. Given
that approximately 99% of the Company's recurring revenue was generated in the
US, recurring revenue for the quarter was adversely affected by a 14% change
in currency caused by devaluation in the US dollar as compared to the same
period one year ago.
    Revenue for the quarter ended April 30, 2008 was $3,508,643, compared to
$3,639,693 for the same period one year ago. Revenue was negatively impacted
by the devaluation of the US dollars by approximately 14% compared with Q3
2007. (*)Earnings before interest, tax, depreciation, amortization and
stock-based compensation (EBITDA) was a loss of $342,000 compared to a loss of
$146,000 one year ago and a loss of $541,000 during the previous quarter
representing a quarter over quarter EBITDA improvement of 37%. Net loss for
the quarter ended April 30, 2008 was $1,267,348 compared to a loss of
$1,119,695 for the same period one year ago.

    Contributing to the financial results for Q3 were:

    
    1   Amortization of property and equipment of $728,098 (compared with
        $597,269 in Q3 2007).
    2   Reduced margins for the quarter in the amount of $218,000 or 14% due
        to foreign exchange as compared to the exchange rates adopted in the
        same period last year,
    3   Decrease in one-time revenues by $217,000 for the quarter as compared
        to one-time revenues of $284,000 in the same period last year
    4   Reduction in margins was partially offset by the reduction in
        operating expenses. General and administration expenses went down by
        $116,360 or 13% to $750,175 compared to the same period last year.
        Compared to the previous quarter, it went down by $253.200 or 25%.
        Sales and marketing expenses went down by $27,628 or 6% to $411,716
        compared to the same period last year. The Company recently announced
        that it had surpassed the 10,000 location activated milestone
    

    "The Company delivered on its plan to significantly reduce expenses,
improve quarter over quarter profitability and deliver growth in locations and
transactions while dramatically reducing its capital expenditures." said Hamed
Shahbazi Chairman and CEO of TIO Networks, "Subsequent to the quarter we
surpassed the '10,000 locations activated' mark earlier than expected and look
forward with increased confidence as we unlock the value of the TIO Network."

    The following metrics are key measures on the Company's quarterly
performance in terms of deployments, transactions and profit margins:

    
    -------------------------------------------------------------------------
                                           Clerk Assisted
    -------------------------------------------------------------------------
                                                         TIO provides
                                                        processing only

                           TIO provides platform         (OEM Express)
                                & processing

                                                      driven by TIO's API
    Metric                      (TIO Express)       (Application Programming
                                                          Interface)
    -------------------------------------------------------------------------
    No. of Locations       Q3 08    Q2 08    Q1 08   Q3 08   Q2 08   Q1 08
    -------------------------------------------------------------------------
    Contracted             2,625    2,456    1,751    7400   6200(3) 6200(3)
    ----------------------
    Configured/Activated   1,991    1,951    1,471    631(a)     0       0
    ----------------------
    Transacted(1)         1,684(b)  1,611    1,158     276       0       0
    -------------------------------------------------------------------------
                                        Self-Service (TIO Kiosks)
    -------------------------------------------------------------------------
    No. of Locations             Q3 08            Q2 08            Q1 08
    -------------------------------------------------------------------------
    Deployed(2)                  1,447            1,437            1,416
    ----------------------
    Installed, Activated &
     Transacting(1)              1,361            1,284            1,278
    -------------------------------------------------------------------------
                                     Clerk Assisted and Self-Service
    -------------------------------------------------------------------------
                                 Q3 08            Q2 08            Q1 08
    -------------------------------------------------------------------------
    Total number of locations
     Activated                   3,983            3,235            2,749
    -------------------------------------------------------------------------
    Total number of locations
     Transacted(1)               3,321            2,895            2,436
    ----------------------
    Number of Revenue
     Generating
     transactions            1,415,220        1,378,403        1,289,342
    ----------------------
    Transactional Revenues  $3,358,879       $3,156,378       $3,188,431
    ----------------------
    Transactional Gross
     Profit                 $1,146,494       $1,147,928       $1,095,472
    ----------------------
    Gross Margin % from
     Trans Revenue               34.1%            36.4%            34.4%
    ----------------------
    Recurring Revenues
     (transaction + fixed
      fee revenues)         $3,441,953       $3,246,197       $3,283,000
    ----------------------
    Quarter to Quarter
     Transaction Growth
     (based on
     revenue generating
     transactions)                  3%               7%               5%
    ----------------------
    Quarter to Quarter
     Growth in
     Transactional Gross
     Margin                       0%(4)            5%(4)              1%
    -------------------------------------------------------------------------

    Notes:

    (1) This includes all locations which have transacted over the past
        6 months

    (2) 75% of Deployed Kiosks are Owned by TIO (Q2 75%, Q1 76%)

    (3) Approximate figures based on contracts executed to date. These
        figures will be updated as implementation occurs.

    (4) Gross margins were negatively impacted primarily due to the fact
        that a greater percentage of transactions was conducted via the clerk
        assisted model (i.e. TIO Express and OEM Express) which traditionally
        yields lower margins.

    (a) over 5500 locations were activated subsequent to the quarter end,
        bringing the total OEM Express to approx 6200.

    (b) As part of a temporary arrangement with a biller/retail partner to
        assist them in a transition period due to an acquisition,
        191 locations that were included in the prior quarter were
        deactivated in Q3 2008.

    (c) 18 kiosks from two Canadian customers were deactivated during Q3 2008
    

    Conference Call:

    You are invited to attend a conference call on Tuesday, June 24, 2008 at
11:00am EST to review the financial results. The dial-in numbers are
416-644-3419 in Toronto, or, Toll Free 1-800-733-7560. Callers should request
the TIO Networks Conference.

    About TIO Networks Corp.

    TIO Networks Corp. powers the "Walk Up Financial Services" marketplace
with thousands of leading edge automated self-service and clerk assisted
solutions. TIO owns the largest and most convenient national network of cash
accepting ATMs for bill payment and prepaid services for the 'cash preferred'
consumer marketplace in North America. TIO symbolizes fast, convenient, safe
and 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.

    %SEDAR: 00010068E




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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