VANCOUVER, Nov. 28 /CNW/ - IP Applications Corp. (TSX-Venture: IPX) today announced its quarterly results for the three-month period ended September 30, 2008.
For the quarter ended September 30, 2008 revenue was $1.3M, a decrease of 29% from $1.9M in the corresponding period in 2007. The net loss increased 3% to $(204)K from $(197)K. EBITDA loss was $(162)K as compared to an EBITDA loss of (7)K in the corresponding quarter in 2007.
Overview of the three months ended September 30, 2008: - Implemented a complete redesign of its corporate website "www.IPApplications.com" and rolled out new marketing material describing its billing and subscriber management product suite. - During July 2008, the Company closed a non-brokered private placement of 3.9 million shares for total gross proceeds of $0.8 million - Revenues of $1.3 million for Q3-2008 represent a 29% decrease from the $1.9 million recognized in Q3-2007 but are essentially unchanged from revenues recognized during Q2-2008 - Gross margin was 41% for Q3-2008, down from 44% in Q3-2007 but up from 34% in Q2-2008 - Operating expenses were $0.7 million in Q3-2008, 22% less than Q3-2007 and 10% less than Q2-2008. Marketing and sales was higher than both Q3-2007 and Q2-2008 which reflects the Company's move into billing services for SaaS and Cloud Computing
John Jacobson, President and CEO said "In the third quarter we clarified our product positioning and value proposition for the SaaS and Cloud Computing billing market and presented the new messaging on our new corporate website. Feedback on the site has been very favorable and the response to the marketing has been a growing pipeline of new sales opportunities. We're making solid progress establishing our Software as a Service ("SaaS") business as the dominant driver of future shareholder value.
Multiples and valuations of successful SaaS companies have been and we expect will continue to be many times greater than conventional help desk and hosted applications providers.
In Q3, we also cut costs and improved the performance of the technical support and Internet Service segment of our business. While revenue was relatively unchanged from Q2, our gross margin and operating expenses both improved even as we continued to increase the sales and marketing costs associated with SaaS and Cloud Computing."
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:
September 30 June 30 March 31 December 31 (000's) 2008 2008 2008 2007 ------------------------------------------------------------------------- Operating Loss $(204) $(374) $(138) $(280) Amortization 46 46 45 111 Stock-Based Compensation 21 41 20 37 Other (26) (26) (26) - ------------------------------------------------------------------------- EBITDA $(163) $(313) $ (99) $(132) -------------------------------------------------------------------------
Additional details on the quarterly and year end results, including the audited Consolidated Financial Statements and Management Discussion and Analysis, are available at www.sedar.com under IP Applications Corp.
About IP Applications Corp.
The Company delivers business process automation, customer care and hosting for companies in SaaS, Cloud Computing, telecom, internet services and electronic commerce markets. IP Applications simplifies complex contract administration and management tasks with its comprehensive billing, administrative and marketing support application.
More product information is available on its corporate website (www.IPApplications.com)
Forward-Looking Statements
This press release may contain forward-looking statements. The Company cautions users of this forward-looking information that actual results or events may vary materially either favorably or unfavorably from those described due to a number of risks and uncertainties. Such risks and uncertainties include, but are not limited to: the inability of the Company to accurately forecast the revenue from new and existing customers; the inability of the Company's customers to accurately forecast their own demand for the Company's products and service; changes in the relative value of the US and Canadian dollars; the possibility that one or more customers or suppliers might experience financial difficulties that could affect the Company's ability to deliver and get paid for its products and services; and changes in the growth rate of technology and telecommunications concerns. Refer to the Company's management's discussion and analysis ("MD&A") for further discussion of these and other risks and uncertainties in relation to such forward-looking information.
Forward-looking information is based on management's current expectations, estimates and opinions. Please refer to the MD&A for a discussion of the events and circumstances which occur that cause, or are likely to cause, actual results to differ materially from such forward-looking information.
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