IP Applications Corp. Achieves Positive EBITDA during the First Half of 2007



    VANCOUVER, Aug. 22 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) today
announced its quarterly and semi-annual results for the period ended June 30,
2007.
    For the first three months ended June 30, 2007 revenue was $1.9M compared
to $2.3M in the corresponding period in 2006. The net loss decreased to $247K
from $640K. EBITDA loss was $13K, a significant improvement from the loss of
$221K in the corresponding quarter in 2006.
    For the six months ended June 30, 2007 revenue was $4.0 million compared
to $4.8 million in the corresponding period in 2006. The net loss decreased to
$433K from $1.05M. EBITDA was $12K, as compared to the loss of $235K for the
six months ended June 30, 2006.
    John Jacobson, President and CEO said "The dramatic decline in the US
Dollar since 2005 has been a challenge for IP Applications. We estimate that
for every cent the Canadian Dollar rises against the US Dollar, the Company's
annualized revenues would decline by approximately $73K. In the short term,
cost control has improved our bottom line. Our long-term strategy is to shift
more of our costs to products and services we purchase with US Dollars and to
reduce costs outright by shifting some of our labour expenses to lower cost
locations around the globe. This should make us more competitive and more
efficient, and this competitiveness will support growth."

    Achievements during the first half of 2007:

    
    -  During the first half of 2007, the Company achieved positive EBITDA of
       $12K compared to the loss of $235K in the same period in 2006; this is
       the result of our continued focus on operational efficiencies.
    -  Gross margin improved to 42.6% in the second quarter, as compared to
       37.6% in the comparable quarter in 2006.
    -  Operating expenses declined 31% to $1.0M in the current quarter, as
       compared to $1.5M for the three month period ended June 30, 2006.
    -  Operating expenses declined 26% to $2.2M for the six months ended
       June 30, 2007, down from $3.0M in the six months ended June 30, 2006.
    -  Net loss for the six months ended June 30 improved 59% to $433K in
       2007 from $1.05M in 2006. The second quarter loss also improved 61% to
       $247K from $640K in 2006.
    -  In March 2007, the Company entered into a revolving line of credit
       facility with a major Canadian chartered bank. The maximum borrowing
       limit of $400,000 is backed by a fixed and floating charge against
       assets.
    

    Non-GAAP measures

    EBITDA is a key measure used by management to evaluate the Company's
performance. Management believes that EBITDA is useful as it provides an
indication of the results generated by the Company's business activities prior
to taking into consideration how those activities are financed and taxed and
also prior to taking into consideration asset depreciation and other non-cash
expenditures. EBITDA is not a recognized measure under Canadian GAAP, and
accordingly, investors are cautioned that EBITDA should not be construed as an
alternative to net earnings or loss determined in accordance with GAAP as an
indicator of the financial performance of the Company or as a measure of the
Company's liquidity and cash flows. EBITDA may not be comparable to similar
measures presented by other issuers. The schedule below details how IP
Applications reconciles its net loss per GAAP to EBITDA for the most recent
four quarters:

    
                                                Quarter Ended

                              June 30     March 31  December 31 September 30
    (000's)                      2007         2007         2006         2006
    -------------------------------------------------------------------------

    Operating Loss              $(247)       $(186)     $(1,361)       $(472)

    Amortization                  122          122          321          318

    Stock-Based Compensation       60           37           48           88

    Write-down of
     Intangible assets              -            -          609            -

    Other                          52           52           76           17
    -------------------------------------------------------------------------

    EBITDA (loss)                $(13)         $25        $(307)        $(49)
    -------------------------------------------------------------------------
    

    Additional details on the quarterly and year end results, including the
audited Consolidated Financial Statements and Management Discussion and
Analysis, are available at www.sedar.com under IP Applications Corp.

    About IP Applications

    IP Applications Corp. supports clients that are bringing online products,
services, content and Internet access to market. The Company provides a
flexible combination of technology, systems and expertise for customers who
have identified channels and products but who lack the delivery and support
capabilities. IP Applications' integrated Operational Support System (OSS) and
Customer Care help desk services dramatically reduce the cost, complexity and
time to market for online products and services.

    Forward-Looking Statements

    This press release may contain forward-looking statements. Actual events
or results may differ materially from those described in the forward-looking
statements due to a number of risks and uncertainties. Forward-looking
statements are based on management's estimates, beliefs, and opinions. The
company assumes no obligation to update forward-looking statements.

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





For further information:

For further information: Richard Topham, CFO, D (604) 630-5657, E
rtopham@ipapplications.com

Organization Profile

IP APPLICATIONS CORP.

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