Axia Releases Results for Fiscal 2011 and Q4FY11

  • Net income for fiscal 2011 increased 74% to $6.0 million.

  • Consolidated revenue for fiscal 2011 increased 14% to $78.2 million.

  • Major wins in Spain and Massachusetts.

  • Connected enterprise customers in the Alberta Oil Sands sector by completing two major builds.

  • Bandwidth usage grew in France by 51% and in North America by 18% over the prior year.

  • New financial partner in France.

  • Network construction in Singapore has now been completed to over 70% of premises.

CALGARY, Sept. 20, 2011 /CNW/ - Axia NetMedia Corporation (Axia) today announced the results for the fourth quarter and fiscal year ended June 30, 2011.

Chairman and CEO Art Price commented, "Fiscal year 2011 was an exciting year for Axia as we continued to deliver on our goal of being the dominant provider of fibre infrastructure in the regions we operate in. Axia is experiencing continued demand growth for our fibre infrastructure services as our customers look for ways to further leverage our networks for Cloud Computing and remote Data Processing services."  He added, "We remain on track with our plans to deliver predictable and sustainable earnings growth for our shareholders.  Alberta continues to generate positive cash flows, France is focused on growing its market penetration, Spain has begun to sell services on existing infrastructure and the construction in Singapore and Massachusetts are progressing on schedule."


($000s except per share amounts)               2011         2010
Gross profit
Net income
Net income per share - f/d


  • Revenue for fiscal 2011 increased $9.6 million (14%) to $78.2 million from $68.5 million.

  • Gross profit for fiscal 2011 increased by $3.6 million (14%) to $29.0 million or 37% of revenue.

  • The net income for fiscal 2011 was $6.0 million ($0.09 per fully diluted share) compared to $3.4 million ($0.05 per fully diluted share) for fiscal 2010.

  • Working capital was $24.3 million as compared to $21.8 million at June 30, 2010.  As at June 30, 2011, Axia had $32.7 million in cash and unrestricted short-term investments.


North America

($000s)                                       2011         2010
Broadband Revenue
Total Revenue
Gross profit
Net income



North America revenue for fiscal 2011 increased $5.0 million (10%) to $56.6 million.  Bandwidth usage in North America grew 18% during fiscal 2011. Gross profit for fiscal 2011 increased by $1.0 million (4%) to $25.7 million or 45% of revenue. Investing in new opportunities in both Massachusetts and Alberta led to a decrease in net income of 8% to $15.2 million.

Alberta SuperNet

During the fourth quarter, the North American segment established a strong Alberta Oil Sands enterprise business focus and successfully delivered on two major builds, and recently concluded commercial arrangements that will connect Alberta's SuperNet to three major Canadian data centres.

Axia's Alberta network's largest customer is the Government of Alberta and the initial term of the agreement with them is up for renewal in 2015.  The Alberta SuperNet value proposition of high performance for low cost is aligned with customer requirements based on productivity and cost efficiency.  In addition to this Axia is actively bringing new enterprise customers to the network, growing its private sector business and refreshing the electronics to ensure that Axia continues to have a state-of-the-art network available for use by existing and potential new customers, today and beyond 2015.

MassBroadband 123

Axia signed a ten year renewable agreement with the Massachusetts Broadband Institute which allows Axia the exclusive right to sell fibre based infrastructure services over a network consisting of 2,153 kms of fibre backhaul infrastructure and electronics in Western and North Central Massachusetts.  Axia has the opportunity to operate and extend the network and sell Broadband Services to customers in the region.  Additionally, approximately 1,400 government institutions in more than 120 communities have committed to use the network.


($000s)                                       2011         2010
Broadband Revenue
Total Revenue
Gross profit
Net income (loss)



Revenue from Axia's European business increased $4.7 million (28%) in fiscal 2011, to $21.6 million.  Axia's business in Spain, Xarxa Oberta, was activated during the quarter and European Broadband Services revenue includes the early stage revenue from Xarxa Oberta of $0.2 million.  Compared to fiscal 2010, Broadband Services revenue increased $5.5 million (46%) to $17.4 million. Bandwidth usage in Europe grew 51% during fiscal 2011. Gross profit for the year increased by $2.6 million to $3.3 million or 15% of revenue.  Net income improved by 52% over the prior year to a loss of $3.3 million.


Covage sells services over nationwide fibre infrastructure that is comprised of 15 regional network segments and a 3,700 km national fibre network backbone.  On July 4, 2011, Axia's partner, VINCI Networks (VINCI) sold all of its shares in Covage to Cube Communications Infrastructure Fund (Cube).  Cube made an initial payment to VINCI of €30 million with a commitment to pay an additional €36 million during the next three years depending on Covage's results. Both partners are committed to expanding Covage's business.

During fiscal 2011, Covage expanded its business with its wins: to activate and sell services on the submarine cable between Corsica and the mainland of France; sell services on an enterprise network for a period of ten years for the city of Nîmes in southwestern France; and its award of the Chevry-Cossigny FTTH Pilot Project in Seine-et-Marne which will connect 1,250 residences to Covage's existing Sem@for77 network segment.

Xarxa Oberta

Axia, with our Spanish partner, was awarded a 20 year contract by the Generalitat of Catalonia to sell, on an exclusive basis, fibre based infrastructure services on a statewide network in Catalonia. The network, activated by Axia, connects 696 government sites in 95 municipalities. Axia has begun to sell Broadband Services throughout the state, in addition to the government's commitment to spend €253 million to purchase our services over the 20 year term.

Asia Pacific

OpenNet has completed construction to approximately 900,000, or just over 70%, of premises in Singapore and is on schedule to complete its rollout by July 2012. While the network is being rolled out, completed sections have already been activated. All of Singapore's major communication retailers (i.e. SingTel, StarHub, and M1) have begun selling broadband services on the fibre network.

Fourth Quarter FY11 Consolidated Financial Information

($000s except per share amounts)       Q4       Q3       Q2       Q1
Gross profit
Net income
Net income per share - f/d

  • Revenue for fourth quarter was $19.2 million, an increase of $0.3 million (2%) from $18.9 million for the prior quarter.

  • Gross profit for the quarter was $6.5 million or 34% of revenue, a decrease of $0.4 million (6%) from the prior quarter.

  • Net income was $1.6 million ($0.02 per fully diluted share) as compared to $1.1 million ($0.02 per fully diluted share) for the prior quarter.


As each of Axia's networks progresses through the build phase into active operations Axia remains on track with its long-term plans to deliver predictable and sustainable earnings growth. Alberta continues to generate positive cash flows, France has moved from the construction phase to activation, Spain has begun to sell services on existing infrastructure and construction in Singapore and Massachusetts are progressing on schedule. Axia will continue to maximize the use and value of the networks it operates.


A conference call with the financial community will be held on Wednesday, September 21, 2011 at 3 p.m. (Eastern), 1 p.m. (Mountain). Axia Chairman and CEO Art Price, Axia North America President and Executive Vice-President Murray Sigler, and Chief Financial Officer Alan Hartslief will participate.

To participate in the conference call, please dial (647) 427-7450 in Toronto and internationally. If you are connecting from other parts of Canada, dial 1-888-231-8191. Please call ten minutes prior to the start of the call. In addition, a live webcast (listen only mode) of the conference call will be available at:

A replay of the conference call will be available at (416) 849-0833 or 1-800-642-1687, passcode 72360153 from 6 p.m. (Eastern) Wednesday, September 21, 2011 to midnight (Eastern) Wednesday, September 28, 2011 or through the webcast archives at


The audited Consolidated Financial Statements for the fiscal year and quarter ended June 30, 2011 and related Management's Discussion & Analysis have been reviewed and approved by Axia's Audit Committee and Board of Directors.  These reports have been filed on SEDAR at and also posted at

Axia sells services over fibre optic communications infrastructure that has implemented the Axia NGN Solution. To date, the Axia NGN Solution has been implemented in Alberta, France, Singapore, Spain and Massachusetts. Axia trades on the Toronto Stock Exchange under the symbol "AXX".

This News Release contains forward-looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws.  These statements are based on our current expectations, estimates, forecasts and assumptions about the operating environment, economies and markets in which we operate and are subject to important assumptions, risks and uncertainties that are difficult to predict.  Examples of these statements would include those where Axia forecasts its success and timing in winning new NGN business, the timing of completion and estimated total costs of our networks, the revenues and operating costs associated with these networks over time, and Axia's ability to generate future cash flows and avail itself of other financing alternatives given current market conditions.  The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to, changes in customer markets, changes in demand for our services, our inability to deliver services in a timely and cost efficient manner, technological change, general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in our Annual Information Form, which filings can be found at Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.  Unless otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise.


SOURCE Axia NetMedia Corporation

For further information:

For further information, please visit Axia's website at, or contact:

Dawn Tinling
VP, Investor Relations and Communications
Axia NetMedia Corporation
(403) 538-4074

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