Hostopia Reports 42% Rise in Operating Income on Record Third Quarter Revenue

About this update from Pure Energy Minerals Ltd.

MISSISSAUGA, ON and FT. LAUDERDALE, FL, Feb. 11 /CNW/ - Hostopia.com Inc. (TSX: H), a leading provider of web services that enable small and medium-sized businesses to establish and maintain an Internet presence, today reported its unaudited financial results for the third quarter ended December 31, 2007. All figures are in U.S. dollars unless otherwise stated. Highlights - Q3 revenue increased 29.8% year over year; 7.1% sequentially from Q2 - 31st consecutive quarter of increasing revenue - 17th consecutive quarter of positive operating income - Announced the launch of new Nexthaus mobile data synchronization applications - Closed 9 new customer contracts for web services, templates and mobile sync services - Added 8,000 end users "We are pleased with our continued sequential revenue growth and the demonstrated earnings leverage our increased revenues bring," said Colin Campbell, Hostopia's CEO. "The Company showed strong revenue growth driven by the record 28,000 end user accounts we migrated onto our platform in the previous quarter and the net addition of a further 8,000 end users this quarter. The large end user increase year to date, combined with our backlog of website and email migrations, should result in a further improvement in our operating results over the remainder of the year." Financial Results for the Third Quarter of Fiscal 2008 Revenues increased 29.8% to $7.3 million in the three months ended December 31, 2007, compared to the same period last year. This was the 31st consecutive quarter of higher revenues. Sequential revenue growth of 7.1% in the third quarter was primarily due to the migration of 28,000 end users onto the Hostopia platform in the previous quarter as well as the net addition of 8,000 end users this quarter. Two website template license contracts also contributed to the sequential revenue growth. Gross profit of $6.3 million increased by $1.4 million compared to last year. Income before interest and income taxes was $643,000 up $189,000, compared to the third quarter of last year. This 42% increase in income before interest and income taxes was tempered by the $1.2 million increase in operating expenses resulting primarily from: (1) personnel costs associated with two new start-up units within Hostopia: Website Experts (website creation services) and the Nexthaus mobile syncing service, (2) higher am...

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