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Earnings Releases
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2008-05-15 PEER 1 Network Announces Record Third Quarter Results and Toronto Stock Exchange Listing
VANCOUVER, BRITISH COLUMBIA - Thursday, May 15, 2008 - PEER 1 Network
Enterprises, Inc. (TSX-V:PIX), a global provider of high performance Internet
infrastructure, today released the company's financial results for the third quarter of
fiscal year 2008 for the three months ended March 31, 2008. In addition, the
company announced that the Toronto Stock Exchange (TSX) has approved PEER 1's
application to have its shares listed on the TSX.
TORONTO STOCK EXCHANGE LISTING
The company is pleased to announce that its common shares will commence trading
on the TSX on Tuesday, May 20, 2008 under its current trading symbol "PIX".
Concurrent with listing on the TSX, PEER 1's common shares will be delisted for
trading on the TSX Venture Exchange ("TSX-V").
"The listing of PEER 1's shares on the Toronto Stock Exchange will be a major
milestone in PEER 1's evolution" said Fabio M. Banducci, PEER 1's president and CEO.
"We look forward to the increased visibility that our graduation to the TSX will deliver to
the company and to our shareholders."
RECORD THIRD QUARTER RESULTS
Financial highlights from the quarter include the following (all figures are reported in
US dollars):
- PEER 1's revenue increased 21.42% to $22.77 million for the three months ended
March 31, 2008, compared to $18.76 million for the three months ended March
31, 2007.
- Gross profit increased 47.57% to $10.34 million for the three months ended
March 31, 2008, compared to $7.01 million for the three months ended March
31, 2007.
- Operating income increased 114.52% to $4.11 million for the three months
ended March 31, 2008, compared to $1.92 million for the three months ended
March 31, 2007.
- Income before income taxes was $3.70 million for the three months ended March
31, 2008 compared to $0.54 million for the three months ended March 31, 2007.
- Net income was $2.2 million for the three months ended March 31, 2008,
compared to $0.23 million for the three months ended March 31, 2007.
- Normalized EBITDA increased 54.15% to $7.43 million for the three months
ended March 31, 2008, compared to $4.82 million for the three months ended
March 31, 2007.
"PEER 1's third quarter results build on the successes of previous quarters," said Mr.
Banducci. "We are very pleased to report our seventh consecutive quarter of record
profitable growth."
KEY DEVELOPMENTS
- During the quarter ended March 31, 2008, the company substantially completed
its implementation of its extensive upgrade of the PEER 1 IP network. The total
estimated capital expenditure related to this upgrade is approximately $4 million.
- On February 26th, PEER 1 announced that the company has partnered with
Microsoft to offer 50 free developer sandbox servers for a 30-day trial. Web
developers now have a chance to work with full control on a collection of
Microsoft website development applications in a dedicated hosting environment.
This is a unique opportunity for developers and agencies to explore both the
internal and external aspects of testing and developing a website and other
online applications using some of the latest Microsoft software that has been preloaded
in to the sandbox server and is connected into PEER 1's extensive online
network infrastructure. Working together in this collaborative and supportive
environment enables the developers to build applications and compatible
offerings, which can better meet customer needs and increase both business and
customer revenue.
- On January 17, PEER 1 announced that the company now offers Fibre Attached
Storage (FAS) system options on its managed Storage-Area-Network (SAN) to
deliver high performance and customizable data sharing and storage capability.
The service will provide customers of all sizes with fast, high performing Storage
Area Network at an affordable price point. This is in response to a growing
demand for online infrastructure and data storage. The FAS solution is ideal for
both fast growing businesses and established companies, such as SaaS, data
warehousing or high transactional e-commerce environments, that require
limitless amounts of storage, scalability and performance capabilities. The system
uses the EMC SAN infrastructure, based in PEER 1's Atlanta, Miami, and Fremont
CA data centers, which provides customers diverse geographic options. It is also
fully customizable depending on the business requirements and growth structure
of the customer.
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 or at www.peer1.com.
EBITDA Reconciliation
(unaudited - prepared by management)
(in $ thousands)
| Quarter Ended |
|
|
| 31-Mar-08 | 31-Mar-07
|
| Net Profit | 2,202 | 230 |
| Income tax expense | 1,500 | 312 |
| Interest Expense | 471 | 814 |
| Interest accretion on notes payable | 22 | 54 |
| Amortization of preferred share discount | - | 389 |
| Amortization - licences, fixed assets and deferred network costs | 2,881 | 2,713 |
| Stock based compensation | 399 | 150 |
| Loss (gain) on disposal of assets | (7) | 82 |
| Amortization of deferred gain | (20) | (30) |
| Foreign exchange loss (gain) | (15) | 14 |
|
| EBITDA | 7,433 | 4,728
|
| Integration costs | - | 90 |
| | Normalized EBITDA | 7,433 | 4,818 |
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.
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2008-02-14 PEER 1 Network Announces Record Second Quarter Results
Company Records Sixth Consecutive Quarter of Profitable Growth
VANCOUVER, BRITISH COLUMBIA –Thursday, February 14, 2008 – PEER 1 Network Enterprises, Inc. (TSX-V:PIX), 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 high-density 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)
| Three Months Ended |
|
|
| 31-Dec-07 | 31-Dec-06
|
| Net Profit (Loss) | 1,882 | 849 |
| Income tax expense (recovery) | 1,382 | (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) |
|
| EBITDA | 6,855 | 4,777
|
| Integration costs | - | 293 |
| | 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 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.
-30-
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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2007-11-27 PEER 1 Network Announces Record First Quarter Results
VANCOUVER, BRITISH COLUMBIA –Tuesday, November 27, 2007 – PEER 1 Network Enterprises, Inc. (TSX-V:PIX), a global provider of high performance Internet infrastructure, released the company’s financial results for the first quarter of fiscal year 2008 for the three months ended September 30, 2007.
FIRST QUARTER RESULTS
Financial highlights from the quarter include the following (all figures are reported in US dollars):
- PEER 1’s revenue increased 20.11% to $20.96 million for the three months ended September 30, 2007, compared to $17.45 million for the three months ended September 30, 2006.
- Gross profit increased 37.73% to $8.98 million for the three months ended September 30, 2007, compared to $6.52 million for the three months ended September 30, 2006.
- Operating income increased 62.64% to $2.83 million for the three months ended September 30, 2007, compared to $1.74 million for the three months ended September 30, 2006.
- Income before income taxes was $2.15 million for the three months ended September 30, 2007, compared to $0.35 million for the three months ended September 30, 2006.
- Net income was $1.25 million for the three months ended September 30, 2007, compared to $0.25 million for the three months ended September 30, 2006.
- Normalized EBITDA increased 34.13% to $5.97 million for the three months ended September 30, 2007, compared to $4.46 million for the three months ended September 30, 2006.
“PEER 1 had a great first quarter,” said Fabio M. Banducci, PEER 1’s president and CEO. “We experienced solid growth across all of our core service offerings during the quarter and posted record financial results. Our focus remains on becoming the preferred IT Infrastructure solutions provider to the SMB marketplace.”
KEY DEVELOPMENTS
- During the quarter ended September 30, 2007, PEER 1 committed to a $4 million upgrade of the company’s IP network. This upgrade will be accomplished through 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. 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.
- On September 4, 2007, PEER 1 and Juniper Networks, Inc. the leader in high-performance networking announced that PEER 1 has expanded its managed firewall service offerings with the addition of Juniper Networks Secure Services Gateways (SSGs). Fully managed by PEER 1 experts, the Juniper Networks SSG platforms will provide best-in-class protection, superior capacity and Gigabit Ethernet interfaces, enabling PEER 1 to offer cost-effective, high-capacity security solutions that scale to meet the demands of the largest enterprises. The expanded managed firewall services ensure a secure and trusted network environment without requiring enterprise customers to dedicate IT resources, enabling customers to reduce operational costs and complexity.
- On September 10, 2007 the company announced several changes of roles for members of the company executive management team.
Lance Tracey, co-founder and chief executive officer, announced that he was stepping down from his role as CEO. Immediately thereafter, Mr. Tracey assumed his new role as executive chairman of PEER 1’s board of directors.
Fabio M. Banducci was appointed the company’s new CEO in addition to his existing role as president of PEER 1.
Gary Sherlock, PEER 1’s chief financial officer, was promoted to the role of executive vice president in addition to his CFO responsibilities.
- On September 25, 2007 PEER 1 announced that it has deployed EMC Storage Area Network (SAN) platforms across all of its managed dedicated hosting data center operations in Atlanta, Miami, and Fremont, California (Silicon Valley). The EMC platform provides state-of-the-art technology to optimize PEER 1’s data backup solution, providing managed dedicated hosting customers with faster and more reliable backup and data recovery. PEER 1’s backup and data recovery solutions are fully managed by internal PEER 1 data backup experts and support professionals.
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)
| Three Months Ended |
|
|
| 30-Sep-07 | 30-Sep-06
|
| Net Profit (Loss) | 1,246 | 249 |
| Income tax expense (recovery) | 901 | 97 |
| Interest Expense | 596 | 856 |
| Interest accretion on notes payable | 22 | 56 |
| Amortization of preferred share discount | - | 357 |
| Amortization - licences, fixed assets and deferred network costs | 2,711 | 2,606 |
| Stock based compensation | 352 | 55 |
| Loss (gain) on disposal of assets | (14) | (5) |
| Amortization of deferred gain | (20) | - |
| Foreign Exchange loss (gain) | 99 | (33) |
|
| EBITDA | 5,893 | 4,238
|
| Integration costs | 93 | 225 |
| | Normalized EBITDA | 5,986 | 4,463 |
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.
-30-
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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2007-10-25 Company Records First Ever Annual Net Profit of $3.63 Million
VANCOUVER, BRITISH COLUMBIA – Thursday, October 25, 2007 – PEER 1 Network Enterprises, Inc. (TSX-V: PIX), a leading provider of IT infrastructure, today released the company’s financial results for the fiscal year ended June 30, 2007, recording the company’s first year of four profitable quarters. All figures are in US dollars.
“Fiscal year 2007 was a transformational year for PEER 1,” said Fabio M. Banducci, PEER 1’s president and chief executive officer. “We have successfully completed the turnaround of the acquisition of Interland’s dedicated server assets, reported record financial results and significantly strengthened our balance sheet. We are now very well positioned to extend our leadership position further by focusing on delivering premium, value added solutions to our growing base of over 9,000 customers worldwide and by enabling them to focus on the possibilities of the Internet, not the problems.”
Financial highlights from the year include the following:
- PEER 1’s revenue increased 22.45% to $74.36 million for the year ended June 30, 2007, compared to $60.73 million for the year ended June 30, 2006;
- Gross profit increased 28.08% to $28.77 million for the year ended June 30, 2007, compared to $22.46 million for the year ended June 30, 2006.;
- Operating income increased 88.90% to $7.61 million for the year ended June 30, 2007, compared to $4.03 million for the year ended June 30, 2006;
- Net profit was $3.63 million for the year ended June 30, 2007, compared to a net loss of $3.19 million for the year ended June 30, 2006.
- Normalized EBITDA for the year ended June 30, 2007 was $19.9 million, a 55.5% increase over normalized EBITDA of $12.8 million for the year ended June 30, 2006.
Corporate highlights from fiscal 2007:
- Effective May 29, 2007, PEER 1 closed a $40 million amended and restated loan agreement with Fortress Credit Opportunities I LP that provides for a $20 million term loan and a $20 million line of credit available to fund growth capital and acquisitions.
- During the year, the company completed a 12,000 square foot data center move and expansion of its available facilities in San Antonio, TX. In addition, the company completed an expansion of both its Vancouver and Toronto data center facilities.
- On February 1, 2007, PEER 1 announced that its data center expansions gave the company the capacity to add approximately 65% more dedicated servers to its then current base of over 16,000 dedicated servers and approximately 40% more co-location cabinet equivalents to its then current base of over 1,100 cabinet equivalents. This capacity will enable PEER 1 to significantly grow its customer base with modest incremental capital expenditures relative to building a new data center.
- PEER 1 was recognized as the ninth fastest-growing company in Canada and second in British Columbia in the 19th annual PROFIT 100 ranking of Canada’s Fastest-Growing Companies by PROFIT Magazine. This is PEER 1’s second consecutive year in the top ten of the PROFIT 100 list. In 2006 the company ranked fourth in Canada and came in as the number one fastest growing company in British Columbia.
- During the year, the company, in partnership with industry leaders, introduced a number of quality products and services that leverage and complement PEER 1’s current infrastructure.
- In April 2007, PEER 1 completed the installation of IBM Tivoli Storage Manager software, and is offering its managed dedicated hosting customers world-class enterprise data backup services.
- In April 2007, PEER 1 announced its partnership with ControlScan, a market leader in e-commerce security and marketing services. This partnership allows PEER 1 to offer its dedicated hosting customers an affordable solution for scanning their servers for the latest vulnerabilities. It also satisfies the rigorous payment card industry (PCI) compliance scan requirements.
- In May 2007, in accordance with the pre-existing terms of the Preferred Shares Series A, the holders of the 7,000 Preferred Shares Series A converted all 7,000 shares and cumulative unpaid dividends into 34,869,628 Common Shares of the company.
SUMMARY OF FOURTH QUARTER RESULTS
Revenue for the fourth quarter of fiscal year 2007 was $19.9 million compared to $17.1 million in the same quarter of fiscal year 2006.
Normalized EBITDA for the fourth quarter was $5.6 million compared to $3.1 million for the quarter ended June 30, 2006.
During the quarter, PEER 1 recorded two one-time charges: a $1.2 million intangible asset impairment charge and a $0.91 million provision for sales and use taxes.
SUBSEQUENT EVENTS
The following corporate developments occurred subsequent to June 30, 2007:
Network upgrade
On September 4, 2007, PEER 1 and Juniper Networks, Inc., the leader in high-performance networking, announced that PEER 1 expanded its managed firewall service offerings with the addition of Juniper Networks Secure Services Gateways (SSGs). Fully managed by PEER 1 experts, the Juniper Networks SSG platforms will provide best-in-class protection, superior capacity and Gigabit Ethernet interfaces, enabling PEER 1 to offer cost-effective, high-capacity security solutions that scale to meet the demands of the largest enterprises.
In addition, the company committed to a $4.5 million capital expenditure program to upgrade its network backbone utilizing the latest Cisco and Juniper switches and routers.
New executive roles
On September 10, 2007, the company announced several changes of roles for members of PEER 1’s executive management team. Lance Tracey, co-founder and chief executive officer, announced that he was stepping down from his role as CEO to assume his new role as executive chairman of PEER 1’s board of directors. Fabio M. Banducci was then appointed the company’s new CEO in addition to his existing role as president of PEER 1. Gary Sherlock, PEER 1’s chief financial officer, was promoted to the role of executive vice president in addition to his CFO responsibilities.
Data backup optimization
On September 25, 2007, PEER 1 announced that it deployed EMC Storage Area Network (SAN) platforms across all of its managed dedicated hosting data center operations in Atlanta, Miami, and Fremont, California (Silicon Valley). The EMC platform provides state-of-the-art technology to optimize PEER 1’s data backup solution, providing managed dedicated hosting customers with faster and more reliable backup and data recovery.
EBITDA Reconciliation
(unaudited - prepared by management)
(in $ thousands)
| Quarter Ended | Twelve Months Ended |
|
|
|
| 30-Jun-07 | 30-Jun-06 | 30-Jun-07 | 30-Jun-06 |
| Net Profit (Loss) | 2,303 | (1,333) | 3,631 | (3,188) |
| Income tax expense (recovery) | (2,918) | 390 | (2,678) | 390 |
| Interest Expense | 687 | 806 | 3,152 | 3,506 |
| Interest accretion on notes payable | 45 | 49 | 208 | 667 |
| Amortization of preferred share discount | 240 | 343 | 1,361 | 1,090 |
| Amortization - licences, fixed assets and deferred network costs | 2,955 | 2,399 | 10,945 | 8,514 |
| Stock based compensation | 133 | 30 | 449 | 289 |
| Loss (gain) on disposal of assets | 11 | 61 | 138 | 61 |
| Amortization of deferred gain | (20) | - | (59) | - |
| Peer 1 share of Symmetric Broadband loss | - | - | - | 13 |
| Foreign Exchange loss (gain) | (9) | (28) | (33) | 305 |
|
| EBITDA | 3,427 | 2,717
| 17,114 | 11,647
|
| Impairment of intangible assets | 1,185 | - | 1,185 | - |
| Provision for sales/use tax | 915 | - | 915 | - |
| Integration costs | 42 | 349 | 650 | 1,187 |
|
| Normalized EBITDA | 5,569 | 3,066 | 19,864 | 12,834 |
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 differs 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.
The annual financial statements, management’s discussion and analysis, along with the Annual General Meeting materials, will be mailed out to shareholders in November. Interested persons may access the financial statements and MD&A on the SEDAR website: www.sedar.com.
About PEER 1
PEER 1 is a leading IT infrastructure provider delivering highly scalable dedicated hosting and co-location solutions to ensure a client’s online presence is fast performing and available 100% of the time. 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 Internet network. PEER 1 serves a variety of startups and SMEs including software as a service (SaaS), web 2.0, hosting providers, online gaming providers, Internet phone (VoIP) companies, and outsourced enterprise solutions organizations. The company’s headquarters are in Vancouver, Canada and the stock is traded on the TSX Venture exchange under the symbol PIX.
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.
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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. |
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2007-05-29 PEER 1 Network Announces Third Quarter Results, New Credit Facilities and Conversion of Preferred Shares
VANCOUVER, BRITISH COLUMBIA –Tuesday, May 29, 2007 – PEER 1 Network Enterprises, Inc. (TSX-V:PIX), a global provider of high performance Internet infrastructure, released the company’s financial results for the third quarter of fiscal year 2007 for the three months ended March 31, 2007. In addition, PEER 1 reported details relating to new credit facilities and the conversion of all preferred shares.
“These results represent a major milestone for PEER 1,” said Fabio M. Banducci, PEER 1’s president. “Continued profitable growth, reduced cost of capital, access to new growth capital and a simplified balance sheet have set the stage for our growth strategy.”
Third Quarter Results
Financial highlights from the quarter include the following (all figures are reported in US dollars):
- PEER 1’s revenue increased 7% to $18.81 million for the three months ended March 31, 2007, compared to $17.63 million for the three month period ended March 31, 2006.
- Gross profit was $7.06 million for the three months ended March 31, 2007, an increase of 8.12% from $6.53 million for the three months ended March 31, 2006.
- Operating income was $1.97 million for the three months ended March 31, 2007, an increase of 61.47% from the operating profit of $1.22 million for the three months ended March 31, 2006.
- Net profit was $0.23 million for the quarter ended March 31, 2007, compared to a net loss of $0.35 million for the quarter ended March 31, 2006.
- Normalized EBITDA for the quarter ended March 31, 2007 was $4.80 million, an increase of 32.2% compared to $3.63 million for the quarter ended March 31, 2006 (see reconciliation table below).
"We continued to see profitable growth across all lines of business during our third quarter and made investments in operations and sales and marketing to accommodate further growth," said Mr Banducci. “Our mission to allow our customers to focus on the possibilities of the Internet, not the complexities, continues to build momentum.”
New Credit Facilities
Effective today, PEER 1 has closed a $40 million amended and restated loan agreement with Fortress Opportunities I LP. The loan agreement provides for two senior, secured credit facilities: (1) a $20 million term loan to refund existing indebtedness; and (2) a $20 million line of credit. The credit facilities will accrue interest at the rate equal to LIBOR plus an applicable margin. The applicable margin is a function of total debt outstanding to trailing twelve month EBITDA (TTM EBITDA) at any determination date, per the table below.
| Total Debt/Actual TTM EBITDA | Applicable Margin |
| Greater than 2.00x, less than or equal to 2.50x | 4.25% |
| Greater than 1.00x, less than or equal to 2.00x | 3.25% |
| Less than or equal to 1.00x | 3.00% |
The applicable interest rate for PEER 1’s present level of indebtedness is LIBOR plus 3.25%. This compares to LIBOR plus 6.50% that the company had been paying prior to today.
“We are thrilled to have successfully negotiated these credit facilities with our existing lender,” said Mr. Banducci. “With the cost of our debt now significantly reduced and with secured access to a line of credit, we are now well positioned to aggressively pursue additional growth opportunities.”
Conversion of Preferred Shares
In addition to the above, PEER 1 reported that effective May 25, 2007, all outstanding preferred shares together with accrued and unpaid dividends have been converted into 34,869,628 common shares. As the preferred shares were accounted for as debt under Canadian GAAP, conversion of the preferred shares will result in a reclassification of $9.4 million of long term debt to equity.
“Successful conversion of all outstanding preferred shares into common shares is a key milestone in PEER 1’s evolution.” said Mr. Banducci. “Our capitalization structure has now been greatly simplified with the result that we now have only one class of shares outstanding. Conversion of the preferred shares has also further strengthened our balance sheet.”
For complete details on any of the above, please refer to the Financial Statements and Management’s Discussion & Analysis which will be available at http://www.sedar.com within 24 hours of the time of this release.
EBITDA Reconciliation
(unaudited - prepared by management)
(in $ thousands)
| Quarter Ended | |
| | 31-Mar-07 | 31-Mar-06
| | Net Profit (Loss) | 230 | ( 355) | | Income tax expense (recovery) | 311 | - | | Interest Expense | 803 | 631 | | Interest accretion on notes payable | 53 | 77 | | Amortization of preferred share discount | 389 | 342 | | Amortization - licences, fixed assets and deferred network costs | 2,713 | 2,328 | | Stock based compensation | 150 | 77 | | Loss (gain) on disposal of assets | 81 | - | | Amortization of deferred gain | (30) | - | | Foreign Exchange loss (gain) | 14 | 124 |
| | EBITDA | 4,714 | 3,224
| | Integration costs | 91 | 405 |
| | Normalized EBITDA | 4,805 | 3,629 |
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 differs 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.
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.
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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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2007-02-28 PEER 1 Network Announces Second Quarter Results
VANCOUVER, BRITISH COLUMBIA –WEDNESDAY, FEBRUARY 28, 2007 – PEER 1 Network Enterprises, Inc. (TSX-V:PIX), a global provider of high-performance Internet infrastructure, released the company's financial results for the second quarter of fiscal year 2007 for the three months ended December 31, 2006. Financial highlights from the quarter include the following (all figures are reported in US dollars):
- PEER 1's revenue increased 11% to $18.13 million for the three months ended
December 31, 2006, compared to $16.29 million for the three month period
ended December 31, 2005.
- Gross profit was $6.75 million for the three months ended December 31, 2006,
an increase of 15% from $5.88 million for the three months ended December 31,
2005.
- Operating income was $2.28 million for the three months ended December 31,
2006 an increase of 113% from the operating profit of $1.07 million for the three
months ended December 31, 2005.
- Net profit was $0.85 million for the quarter ended December 31, 2006, compared
to a net loss of $0.48 million for the quarter ended December 31, 2005.
- Normalized EBITDA for the quarter ended December 31, 2006 was $5.06 million,
an increase of 41% compared to $3.58 million for the quarter ended December
31, 2005 (see reconciliation table below).
"Our second quarter financial results are the strongest quarterly figures that PEER 1
has reported to date," said Fabio M. Banducci, PEER 1's President. "We saw growth
from new and existing customers during the quarter as well as continued margin
improvement and look forward to extending our leadership position further in the
quarters ahead."
For complete details on any of the above, please refer to the Financial Statements
and Management Discussion & Analysis available at http://www.sedar.com within 24
hours.
EBITDA Reconciliation
(unaudited - prepared by management)
(in $ thousands)
| QUARTER ENDED |
| 31-Dec-06 | 31-Dec-05 |
| Net Profit (Loss) | 849 | (482) |
| Income tax expense (recovery) | (169) | - |
| Interest Expense | 836 | 1,041 |
| Interest accretion on notes payable | 55 | 64 |
| Amortization of preferred share discount | 374 | 261 |
| Amortization - licences, fixed assets and deferred network costs | 2,671 | 2,348 |
| Stock based compensation | 111 | 154 |
| Loss (gain) on disposal of assets | 51 | - |
| Amortization of deferred gain | (10) | - |
| Foreign Exchange loss (gain) | (5) | (175) |
| | | | |
| EBITDA | 4,763 | 3,211 |
| Integration costs | 293 | 365 |
| Normalized EBITDA | 5,056 | 3,576 |
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
differs 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.
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The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.
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2006-11-29 PEER 1 Network Announces First Quarter Results
VANCOUVER, BRITISH COLUMBIA –WEDNESDAY, NOVEMBER 29, 2006 – PEER 1 Network Enterprises, Inc. (TSX-V:PIX), a global provider of high-performance Internet infrastructure, released the company’s financial results for the first quarter of fiscal year 2007 for the three months ended September 30, 2006.
Financial highlights from the quarter include the following (all figures are reported in US dollars):
- PEER 1’s revenue increased 80.7% to $17.49 million for the quarter ended September 30, 2006, compared to $9.68 million for the quarter ended September 30, 2005.
- Gross profit was $6.22 million for the quarter ended September 30, 2006, an increase of 67.2% from $3.72 million for the quarter ended September 30, 2005.
- Operating income was $1.77 million for the quarter ended September 30, 2006, an increase of 61.8% from operating income of $1.10 million for the quarter ended September 30, 2005.
- Net profit was $0.25 million for the quarter ended September 30, 2006, compared to a net loss of $1.02 million for the quarter ended September 30, 2005.
- Cash flow from operating activities for the quarter ended September 30, 2006 was $1.1 million, compared to $2.03 million for the quarter ended September 30, 2005
- Normalized EBITDA for the quarter ended September 30, 2006 was $4.43 million, an increase of 73.0% compared to $2.56 million for the quarter ended September 30, 2005 (see reconciliation table below).
The previously announced acquisition of the dedicated hosting assets from Interland, Inc. was completed on September 2, 2005. Accordingly, for comparative purposes, please note that results for the quarter ending September 30, 2005 include only one month of contribution from the former Interland assets whereas the quarter ending September 30, 2006 includes a full three months of contribution.
“Achieving profitability for the first time in company history reflects well on our team's efforts to make our operations more efficient and to realize savings from the integration of the assets we acquired from Interland," said Fabio M. Banducci, PEER 1's president. "Our team remains focused on positioning PEER 1 for further growth and continued margin improvement."
Some key developments during the quarter include:
- On August 9, 2006, the company exercised its option to purchase its leased data center property located at 2300 NW Place, Miami, Florida. On September 26, 2006, PEER 1 subsequently entered into a sale and leaseback arrangement. After adjustments, PEER 1 recorded a deferred gain of $0.79 million on this transaction.
- On September 7, 2006, PEER 1 opened a new facility at 8500 Vicar Drive in San Antonio, Texas. The space includes 12,000 square feet of raised floor data center space and 6,500 square feet of adjoining office space.
- PEER 1 committed to a lease for a 3,500-square-foot expansion of its Vancouver co-location facilities.
- On September 6, 2006 PEER 1 announced that its Board of Directors had approved the adoption of a 2006 Combined Incentive and Nonqualified Stock Option Plan to replace the company’s 2002 Incentive Stock Option Plan.
For complete details on any of the above, please refer to the Financial Statements and Management Discussion & Analysis available at www.sedar.com.
EBITDA Reconcilation
(unaudited - prepared by management)
(in $ thousands) | QUARTER ENDED |
| 30-Sep-06 | 30-Sep-05 |
| Net Profit (Loss) | 249 | (1,018) |
| Income taxes | 97 | - |
| Interest Expense | 826 | 1,027 |
| Interest accretion on notes payable | 56 | 478 |
| Amortization of preferred share discount | 357 | 144 |
| Amortization - licences, fixed assets and deferred network costs | 2,606 | 1,441 |
| Stock based compensation | 55 | 26 |
| Loss (gain) on disposal of assets | (5) | - |
| Peer 1 share of Symmetric Broadband loss | - | 13 |
| Foreign Exchange loss (gain) | (33) | 383 |
| | | | |
| EBITDA | 4,208 | 2,494 |
| Integration costs | 225 | 67 |
| Normalized EBITDA | 4,433 | 2,561 |
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 differs 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.
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