VANCOUVER, Aug. 29 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) today
announced results for the second quarter and the six-month period ended
June 30, 2006.
Quarterly revenue increased 36% to $2.3 million compared with the same
quarter in 2005. The Company reported an EBITDA loss of $221,000 compared with
an EBITDA loss of $90,000 in the quarter ended June 30, 2005. EBITDA is a
non-GAAP measure and is further described below.
For the six months ended June 30, 2006, revenue increased by 45% to
$4.8 million as compared to the corresponding period in 2005. The loss for the
period was $1.1 million or $0.07 per share (basic) compared with a loss of
$1.0 million in 2005. The EBITDA loss for the period was $235,000, a
substantial improvement over the EBITDA loss of $420,000 in 2005.
John Jacobson, President & CEO, said, "The second quarter results were
impacted by three key factors: i) we performed less paid development work in
Q2 than in Q1; ii) two customers departed; and iii) we incurred significant
one-time setup costs when we began delivering network services to two
customers. However, the lower revenue and increased costs for the quarter were
offset somewhat by continued growth in revenue from several key customers.
Continued growth from these key customers combined with elimination of
our payables and accrued liabilities carried forward from 2005, leads us to
expect that both revenues and cash flow will improve in Q3.
We're also working with two of our key customers to enhance and expand
our product offerings. The new business opportunities that flow from these new
offerings are helping us to shape an exciting new vision and strategy for the
Company."
Achievements during the period ended June 30, 2006:
<<
- An increase of 45% in average monthly revenue to $793,000 over the
first six months of the year and a 44% reduction of the EBITDA
loss to $39,000 per month from $70,000 the period before
- Migrated network services to IPA from other suppliers for two
existing customers during the quarter to generate future recurring
revenue in Q3 and beyond
- Maintained revenue and margin despite a continuing decline in the
US dollar exchange rate
- Eliminated outstanding payables and accrued liabilities carried
forward from 2005
>>
The Company also announces that Mr. Mark Sampson, former President and
CEO of IP Applications, has resigned as a Director of the Company. The Board
and management wish to thank Mr. Sampson for his leadership and contributions
to the Company over the past three years.
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:
<<
June 30 March 31 December 31 September 30
(000's) 2006 2005 2005 2005
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Operating Loss $(640) $(411) $(1,580) $(836)
Amortization 318 312 305 262
Stock-Based Compensation 83 79 269 63
Write-down of capital
equipment - - 307 -
Loss on lease commitment - - 210 -
Other 18 6 - 29
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EBITDA $(221) $(14) $(489) $(482)
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>>
Additional details on the quarterly results, including the unaudited
Consolidated Financial Statements and Management Discussion and Analysis, are
available at www.sedar.com under IP Applications Corp.
About IP Applications
IP Applications Corp. is uniquely positioned to serve companies that are
bringing online products, services, content, and internet access to market. IP
Applications 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, Help Desk and Network Monitoring Systems 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.
