Quebec, Canada – (The Hosting News) – February 15, 2008 – Web hosting services company, iWeb, has released its financial results for the three-month period ending December 31, 2007. The Q1-2008 Summary indicates a revenue of $3.2 million, with a 62% increase in revenues compared to the first quarter of the previous fiscal year.
Marc Guindon, Vice-President and Chief Financial Officer of iWeb noted, ”Our steady growth in revenues and adjusted EBITDA continued in this quarter. We are currently working to keep that growth level, with the completion of phase three of our second data center of dedicated servers. In addition, with the addition of the coming installation of Nuns’ Island, we will increase our revenue source in the co-location services. Proceeds received from the November public offering will help in financing a portion of the current work. We are currently in discussions in order to obtain additional financing to complete the necessary investments required to keep our growth level.”
Other highlights include:
– Adjusted EBITDA(1) of $0.8 million, a 65% increase over the first quarter of fiscal 2007 – Closing of a 3.3 million of shares public offering with gross proceeds of $4.1 million – Beginning of installation work of the Nuns’ Island premises for a new co-location data center.
The First Quarter of 2008 Financial Review indicates: For the first quarter of 2008, consolidated revenues increased $1.2 million or 62% to $3.2 million compared to the same quarter of last year. This revenue growth can be attributed primarily to a steady rise in dedicated server demand. Gross profit margin for the first quarter of fiscal 2008 was in line with last year margin at 54%. The benefits of tight operating cost control were offset by the decrease in value of the U.S. dollar against the Canadian dollar, having a negative effect on Company’s revenues in the last quarter. More than 70% of iWeb revenues are generated in U.S. currency. Total operating expenses for the quarter ended December 31, 2007, were 53% of revenue, compared to 47% for the same three-month period of fiscal 2007.
This increase in expenses is attributable to a higher level of activities resulting from the Company’s organic growth, specifically resulting in higher overhead expenses. In addition, increase in stock-based compensation expense, resulting from a higher stock price in the last year, impacted the administration expenses in the last quarter. Financial expenses were also higher, in line with the additional financing facilities obtained in order to pay for the additions in iWeb infrastructures. Adjusted EBITDA increased 65% to $0.8 million, or 25% of revenues, in the last quarter, compared to $0.5 million, or 24% of revenues, for the three-month period ended in December of 2006. This is an increase of 65%. Net earnings were $18,026 or $0,0007 per share compared to $92,995 or $0.0040 per share one year-ago.
As discussed, net earnings for the last quarter were impacted by a stronger Canadian dollar against the U.S. dollar, by higher overhead costs in order to support the Company’s growing operations, and by a higher non-deductible share-based compensation expenses which have also a negative impact on the Company’s effective tax rate, increasing it to 42%, from 32% in the first quarter of fiscal 2007.
Founded in 1996, iWeb offers a full line of advanced IP hosting services either through shared hosting, dedicated servers or co-location in three data centers, featuring over 52,000 square feet of floor space and the latest technological equipment. iWeb provides services in English, French and Spanish to clients in more than 130 countries.
For more information about iWeb, please visit: www.iweb8.com.