VANCOUVER, BRITISH COLUMBIA , a global provider of high
performance Internet infrastructure, released the company's
financial results for the second quarter of fiscal year 2008 for
the three months ended December 31, 2007.
SECOND QUARTER RESULTS
Financial highlights from the quarter include the following (all
figures are reported in US dollars):
- PEER 1's revenue increased 23.02% to $22.22 million for the
three months ended December 31, 2007, compared to $18.07 million
for the three months ended December 31, 2006.
- Gross profit increased 44.08% to $10.13 million for the three
months ended December 31, 2007, compared to $7.03 million for the
three months ended December 31, 2006.
- Operating income increased 76.32% to $3.91 million for the
three months ended December 31, 2007, compared to $2.22 million for
the three months ended December 31, 2006.
- Income before income taxes was $3.27 million for the three
months ended December 31, 2007 compared to $0.68 million for the
three months ended December 31, 2006.
- Net income was $1.88 million for the three months ended
December 31, 2007, compared to $0.85 million for the three months
ended December 31, 2006.
- Normalized EBITDA increased 35.20% to $6.86 million for the
three months ended December 31, 2007, compared to $5.07 million for
the three months ended December 31, 2006.
"The second quarter of fiscal 2008 was our strongest quarter
ever," said Fabio M. Banducci, PEER 1's president and CEO. "This is
our sixth consecutive quarter of record profitable growth, and sets
our company firmly on the path to becoming the preferred provider
of IT infrastructure solutions for the ever-growing SMB
market."
KEY DEVELOPMENTS
- On October 3, 2007, PEER 1 began offering the latest SWsoft
Plesk 8.2 for Linux control panel software for its managed hosting
customers. Plesk provides server administrators with a tool to
manage their servers and websites and includes an intuitive
interface that allows users without a technical background to
create new email accounts and manage domains. The Plesk control
panel automates a large number of tasks to help service providers
reduce operating costs and resources.
- On November 28, 2007, PEER 1 initiated SaaS3, a
Software-as-a-Service (SaaS) incubation and enablement service, for
Independent Software Vendor (ISV) partners. SaaS3 assists small- to
mid-sized ISVs test, deploy and manage web 2.0, enterprise 2.0 and
SaaS applications throughout the entire product lifecycle on the
Microsoft Windows platform. The program builds on PEER 1's existing
infrastructure for SaaS applications, and walks businesses through
the essential aspects of building and deploying applications
running on the Microsoft platform. ISVs can begin by working on
products from the ground up in an online developer sandbox. Then
when the product is ready for market, it can be seamlessly
transitioned online, within the PEER 1 secure, managed hosting
infrastructure. These services can help reduce the ISVs' IT
spending and consolidate resources needed for SaaS applications. As
the product and company grows, the SaaS3 program provides expert
consultation and a fully scalable network to support it.
- On December 11, 2007, PEER 1 launched its "We get IT"
marketing campaign which focuses on the people behind technology,
sharing customer stories and playing on web hosting and technology
issues in a humorous manner. PEER 1 is using traditional marketing
mediums in addition to popular social media tools, such as viral
video pieces, to reach business and technology operators in all
fields. PEER 1's viral marketing includes "Growing Pains," a
humorous video short series telling the story of a home business
start-up that quickly grows out of control and overtakes the house
with new employees, computers and servers. Video customer stories
featuring leading VoIP provider Vonage, free online dating site
PlentyofFish.com, and interactive design agency Blast Radius are
currently featured on PEER 1's web site.
- During the quarter ended December 31, 2007, the company
continued its implementation of its substantial upgrade of the PEER
1 IP network. This upgrade includes the installation of carrier
class routers purchased from the leaders in high performance
networking, Cisco and Juniper. These two suppliers were chosen as
part of the PEER 1 multi-vendor strategy to leverage the
capabilities of each supplier to provide a best fit to each area of
the PEER 1 backbone. The Juniper M series multiservice edge routing
portfolio uniquely combines best-in-class IP/MPLS capabilities with
reliability, stability, security, and service richness, while the
Cisco 7600 series provides the same features with the added benefit
of having highdensity Ethernet switching capabilities. Each router
series has 10 gigabit interface capabilities allowing PEER 1 to
upgrade existing areas of the backbone, as well as keeping an eye
to the future for further capacity expansion. As a result of this
purchase the company will have substantially increased bandwidth
capacity, IP performance and the ability to accommodate new feature
sets such as MPLS. The total estimated capital expenditure related
to this upgrade is approximately $4 million.
For complete details on any of the above, please refer to the
Financial Statements and Management's Discussion & Analysis
which will be available at www.sedar.com within 24 hours of the
time of this release.
EBITDA Reconciliation
(unaudited - prepared by management)
(in $ thousands) Quarter Ended
------------------------------
31-Dec-07 31-Dec-06
Net Profit 1,882 849
Income tax expense (recovery) 1,385 (169)
Interest expense 564 851
Interest accretion on notes payable 22 54
Amortization of preferred share discount - 374
Amortization - licences, fixed assets and
deferred network costs 2,429 2,671
Stock based compensation 429 111
Loss (gain) on disposal of assets 7 51
Amortization of deferred gain (20) (10)
Foreign exchange loss (gain) 157 (5)
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EBITDA 6,855 4,777
Integration costs - 293
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Normalized EBITDA 6,855 5,070
Non-GAAP Measures
PEER 1 reports EBITDA because it is a key measure used by
management to evaluate the company's performance. PEER 1 believes
that EBITDA is useful supplemental information as it provides an
indication of the results generated by PEER 1's main business
activities prior to taking into consideration how those activities
are financed and expensed. 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 Canadian GAAP as an indicator of
financial performance of PEER 1 or as a measure of the company's
liquidity and cash flows. PEER 1's method of calculating EBITDA may
differ from other issuers and, accordingly, EBITDA may not be
comparable to similar measures presented by other issuers. The
schedule above sets out PEER 1's EBITDA calculations.
About PEER 1
PEER 1, a leading Internet infrastructure solutions company,
provides full services to handle the needs of customers requiring
100% uptime for their online presence including network,
co-location, and dedicated hosting services. Since its inception in
1999, the company has grown to include data centers and network
points of presence in 17 major cities across North America and
Europe, all connected by PEER 1's world class IP (Internet
Protocol) network. PEER 1 serves a variety of customers including
hosting providers, online gaming companies, Internet phone (VoIP)
companies and many small and medium-sized businesses. The company's
headquarters are in Vancouver, Canada and the stock is traded on
the TSX Venture exchange under the symbol PIX. For more information
visit http://www.peer1.com.
Statements in this release relating to matters that are not
historical fact are forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. Factors that could cause or contribute to such
differences include, but are not limited to, general economic
conditions, changes in technology, reliance on third party
manufacturing, managing rapid growth, global sales risks, limited
intellectual property protection and other risks and uncertainties
described in PEER 1's public filings with securities regulatory
authorities.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: PEER 1 Network Enterprises, Inc. Gary Sherlock
Executive Vice President & CFO (604) 683-7747 PEER 1 Network
Enterprises, Inc. Katie Wilson Communications (604) 683-7747
Website: www.peer1.com
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