Axia Releases Results for 1Q2008Transmitted by CNW Group on : November 6, 2007 17:09
Axia Releases Results for 1Q2008
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- Revenues of $14.5 million for 1Q2008 compared to $11.0 million in the
same period for fiscal 2007.
- Net income of $2.4 million ($0.04 per share) for 1Q2008 versus
$4.9 million ($0.09 per share) for the prior year, which included a
$1.7 million non-cash tax recovery.
- Gross profit for the quarter ended September 30, 2007 increased
44 percent to $7.2 million from $5.0 million for the same quarter
last year.
- Announced Covage was awarded interests in a 22-year network DSP.
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CALGARY, Nov. 6 /CNW/ - Axia NetMedia Corporation ("Axia" or the
"Corporation") today announced the results for its first quarter ended
September 30, 2007.
1Q2008 Highlights
Axia began deploying self-healing optical ring technology on the Alberta
SuperNet, improving network reliability that is already best in class to
levels normally only available to special critical customer locations in
metropolitan markets. Art Price, Chairman and CEO said, "I believe that this
approach enables new mission critical enterprise application services to be
used by the many enterprise customers with activities that involve operations
outside metropolitan Alberta. Alberta continues to be a showcase on the power
of Real Broadband(TM) and Next Generation Network technology when it is made
available to every community."
Geoff Thompson, Axia's President remarked, "The Alberta marketplace is
now beginning to understand the value proposition that the Alberta SuperNet
represents. We are organized to respond to meet both our existing customers'
evolving needs and attract new customers. In terms of our financial results,
the gross profit from our North American segment increased 20 percent compared
to the same period in fiscal 2007. Our gross profit margin for this segment
remained consistent with the fourth quarter of fiscal 2007 at 48 percent.
"Our business in France continues to evolve and we expect that it will be
late in calendar year 2008 before results based on market penetration will
provide meaningful indications of successful market penetration," said Mr.
Thompson. During the first quarter of fiscal 2008, the Corporation announced
the département of Hérault had awarded Covage, a French company jointly owned
by Axia and VINCI Networks, interests in a 22-year network Délégations de
Service Public ("DSP"). Covage's existing interests and additional interests
being acquired through its agreements with VINCI will result in Covage owning
interests in 13 private companies contracted to operate public networks. The
Corporation expects that all material transfers of DSP interests into Covage
will be completed by the end of this calendar year.
The Corporation continues to participate in the public competitive bid
processes being conducted by the governments of Western Australia and
Singapore. These are expected to draw to a conclusion in the first half of
calendar 2008. In the other jurisdictions, Axia continues to have confidential
preliminary discussions.
"Through fiscal 2008 Axia will continue to pursue international
opportunities with the attendant business development expenses," said Art
Price, Chairman and CEO. "However, we believe that the risk reward profile of
these opportunities is attractive to our shareholders."
1Q2008 Consolidated Financial Information
Consolidated revenues for the quarter ended September 30, 2007 increased
$3.5 million to $14.5 million from $10.9 million for the quarter ended
September 30, 2006. As compared to the fourth quarter of fiscal 2007,
consolidated revenues increased $1.0 million from $13.5 million.
Consolidated gross profit for the quarter ended September 30, 2007
increased 44 percent to $7.2 million from $5.0 million for the same quarter
last year. As compared to the fourth quarter of fiscal 2007, gross profit
increased $0.9 million from $6.3 million. The Corporation's gross profit
percentage over this period has remained relatively consistent with a small
increase this quarter due to the higher margins earned in Europe from its
Other Services revenues.
For the quarter ended September 30, 2007, total expenses were
$3.4 million as compared to $1.8 million for the same quarter last year and
$3.7 million for the fourth quarter of fiscal 2007. The Corporation's
marketing costs remained consistent with previous reporting periods. Business
development expenses of $1.7 million for the current quarter were in line with
the $1.8 million reported for the fourth quarter of fiscal 2007. These
expenses were up significantly from the $0.5 million reported during the first
quarter of 2007 and represent the increased level of bid and proposal
activities being pursued by Axia which began during the later half of fiscal
2007.
During fiscal 2006 and 2007, Axia recognized the benefit of future income
tax assets, which positively affected net income during those periods. At the
end of the third quarter of fiscal 2007, all of the future income tax benefits
relating to temporary tax differences had been recognized and the Corporation
began reporting income tax expense at that time. During the fourth quarter of
fiscal 2007, Axia recognized a non-cash draw-down of these future income tax
assets in the amount of $1.4 million, which was recorded as income tax
expense. For the current quarter, the consolidated accrual for current taxes
payable totalled $1.7 million and the future income tax benefit totalled
$0.3 million.
Net income for the first quarter of fiscal 2008 was $2.5 million
($0.04 per common share on a fully diluted basis) as compared to $4.9 million
($0.09 per common share on a fully diluted basis) for the same quarter last
year and $1.4 million ($0.02 per common share on a fully diluted basis) for
the fourth quarter of fiscal 2007.
As at September 30, 2007, the Corporation's working capital was
$40.7 million as compared to $43.1 million at June 30, 2007. As at
September 30, 2007, Axia had 63.4 million common shares issued and
outstanding.
FY2008 Outlook
In fiscal 2008 Axia's management will remain focused on its three
strategic priorities: growing bandwidth commitments on the Alberta SuperNet to
increase its gross profit contribution; developing and marketing other
services for deployment in Alberta and France; and winning and developing new
Open Access Networks in France and other jurisdictions.