A milestone year for the Montreal web hosting company: a 59% revenue
increase, opening of a third data center and closing of a major financing
deal with Goldman Sachs
MONTREAL, Jan. 20 /CNW Telbec/ - iWeb, a global provider of Internet
hosting service and IT infrastructure, today released its audited financial
results for the fiscal year ended September 30, 2008. In line with its growth
strategy, revenue increased 59% to $15.6 million and EBITDA grew to $3.7
million, though a weak US dollar and charges related to early debt repayment
combined to produce the Company's first net loss.
"The revenue increase is an excellent result, in line with our growth
strategy. This has certainly been our most challenging year, as our sustained
growth has consistently created new challenges and opportunities," said Eric
Chouinard, President and CEO of iWeb. "The key to reaching our main strategic
targets has been our flexibility and the strong work ethic of our team. Our
sales growth is consistent, and with the punctual opening of our third data
center and the final expansion phase of the second one, we are meeting demand
and helping our clients succeed online through these uncertain times."
Martin Leclair, iWeb co-founder and President, Products and Technology
added that "The IP hosting market remains vibrant and active, a powerful
statement considering the roller-coaster events of the past twelve months. A
good sign is our net recurring revenues, which are improving in the three
first months of new new fiscal year."
Recently appointed Chief Financial Officer Philip Tousignant confirmed
that iWeb's first net loss is the result of two factors, "As a result of the
financing agreement with Goldman Sachs, we incurred charges from our other
financial partners; penalties related to early debt repayment, basically." The
other significant factor is the record devaluation of the US dollar compared
to the Canadian dollar during that period; "Almost 80% of iWeb's revenues are
in USD" added Mr. Tousignant, "which has had a net negative impact of $865,000
before income taxes on our results for the year compared to last year results.
A good thing though, the situation seems to have returned recently to a more
favourable conversion rate for our operations."
- Record revenue total of $15.6 million, a 59% improvement
- EBITDA increases to $3.7 million, 24% of revenue.
- Net loss of $552,000
- $22 million US financial agreement with Goldman Sachs in August
- $4.1 million public offering in November 2007
- Opened third Montreal Data center for co-location services
- Tripled Network capacity and expanded IP network to 8 carriers
- Second Data center began Phase IV (Final Phase) of its deployment,
total capacity will be 12,000 dedicated servers and 122 cabinets
- iWeb named to TSX Venture 50, Profit 100 and Branham 300.
- Inaugurated new Headquarters in September, with Montreal Mayor Gerald
Tremblay and Nicole Menard, then Parliamentary Assistant of the
Minister of Economic Development of Quebec addressing iWeb's staff,
clients and partners and shareholders.
Fiscal 2008 Financial Review
Revenues for the year ended September 30, 2008 were $15.6 million,
compared to $9.8 million for the same period of 2007, an increase of $5.8
million or 59%. Management assesses than in spite of the present difficult
economic situation, the maintained growth in monthly recurring revenues and
the increase in product offerings will enable the Company's growth in terms of
Cost of services sold were at 49% of revenues for the year ended September
30, 2008, compared to 43% in the preceding year, an increase of 6%. Gross
profit was therefore 51% of revenues for the last year compared to 57% of
revenues for 2007. This decrease is explained by the impact of a stronger
Canadian dollar over the U.S. currency over the last 12 months (impact of $1.0
million) and by costs incurred in the Nuns' Island facility, for which
revenues are still at an early stage (impact of $300,000). Excluding these two
items, gross profit for the year ended September 30, 2008 would have been
higher by $1.3M or 56% of revenues (compared to 57% of revenues for the same
period of 2007).
Operating expenses were 42% of revenues for 2008, compared to 41% for
2007. The increase is due to administrative expenses growing from 23% to 24%
of revenues due to stock based compensation expense and costs related of
moving the head office to new premises.
The final results for the year was an operating profit at almost
break-even, $82,000 after interest expenses, compared to $880,000 in 2007. The
main reason for this is the increase in value of the Canadian dollar against
the US dollar which has had a negative impact of $865,000.
This operating profit was impacted by the cost of $547,000 of the early
retirement of certain long-term debts and by an unrealised exchange loss of
$152,000 on long-term US$ debt for and after tax final loss of $552,000.
Earnings before financial expenses, taxes, depreciation and amortization,
and stock-based compensation ("Adjusted EBITDA") was $3.7 million (23.8% of
revenues) for the last year compared to $2.8 million in 2007 (28.9% of
Key Financial Data
Fiscal year ended
(in thousands of Canadian
dollars, except per share
Revenues $15,617 $9,816
Gross Profit $7,911 $5,612
Net earnings (loss) ($552) $513
Earnings (loss) per share - basic ($0.0208) $0.0218
Adjusted EBITDA(1) $3,719 $2,836
Total assets $29,361 $14,788
Shareholders' equity $6,122 $1,957
Cash and term deposits $3,779 $844
1- The Company defines Adjusted EBITDA as Earnings before financial
expenses, income taxes, depreciation and amortization, and stock-based
About iWeb Group Inc.
iWeb is a worldwide provider of Internet hosting services and IT
Infrastructure, and is listed on the TSX Venture Exchange (TSX-V : IWB). With
three secure data centers, all in Montreal, iWeb has carved out an enviable
position on the international scene with more than 60% of its revenues from
Founded in 1996 in Montreal, iWeb has recently completed a $22M financing
agreement with investment banking giant Goldman Sachs. iWeb now has over 150
full-time employees providing Dedicated Server Hosting, Co-location and Web
Hosting services to more than 19,000 customers in 150 countries. More
information is available at the Company's website: http://iweb.com/about-us/
Caution concerning forward-looking statements
This news release contains certain forward-looking statements. These
statements relate to future events or iWeb's future economic performance and
reflect the current assumptions and expectations of management. Certain
unknown factors may affect the events, economic performance and results of
operations. iWeb undertakes no obligation, and does not intend to, update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable law.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this news release.
For further information:
For further information: Philip Tousignant, Chief Financial Officer,
iWeb Group Inc., (514) 286-4242 ext. 149, firstname.lastname@example.org; Bernard Dahl,
Director, Communications and Public Relations, iWeb Group Inc., (514) 286-4242
ext. 115, email@example.com