Axia Releases Results for Fiscal 2009 and Q4FY09
- Increased revenues by 9 percent to $69.8 million for fiscal 2009
compared to $63.8 million for fiscal 2008. Revenue for the quarter
was $17.3 million from $17.8 million for the prior quarter of fiscal
2009.
- Net income for the current quarter was $0.4 million or $0.01 per
fully diluted share and $6.0 million for fiscal 2009 or $0.09 per
fully diluted share, a decrease of $0.3 million from $0.7 million or
$0.01 per fully diluted share from the previous quarter and a
decrease of $2.1 million from $8.1 million or $0.13 per fully diluted
share from fiscal 2008.
- Hérault and A75 segments in France are activated and accepting
customer connections.
- Government of Newfoundland and Labrador selected Axia's proposal to
deliver on its Government Broadband Initiative.
Operational Highlights
Alberta
Axia's Alberta SuperNet business continues to generate stable revenues and cash flows. In today's environment, Axia is seeing opportunity for high availability network services through the replacement or augmentation of its clients' existing non-SuperNet services. This is driving greater consideration of the Alberta SuperNet as a cost competitive and capable network alternative to support the delivery of its clients' significant investments in new and planned network centric business and public safety systems. Axia is working with the Government of Alberta to increase their functional use of the Alberta SuperNet and increase their bandwidth usage while reducing their cost structures by leveraging the Alberta SuperNet.
Axia's
Covage is on schedule to complete its national fibre backbone by the end of calendar year 2009. Construction of the Dunkerque Grand Littoral Network has begun and is expected to be completed in
As at
Covage's addressable market is approximately 34,000 sites as at
Covage is focused on leveraging its existing infrastructure, including its national fibre backbone infrastructure, in partnership with key RSPs in order to accelerate its market penetration. Covage is developing a new offer targeting 200 specific business parks with close to 5,000 businesses for which the connection costs would be minimized due to the deployment of fibre in existing infrastructure. This strategy is supported by a government initiative to encourage migration of business parks from DSL to fibre.
The French Government has announced an initiative to create a consortium of operators to deploy Fibre to the Premise ("FTTP") in medium density areas and Covage is interested in participating provided it is an open access network. Consequently departments are re-evaluating their plans to prepare for FTTP initiatives.
As of today, Covage has two outstanding bids and decisions are expected by the end of calendar 2009. Covage continues to review all potential opportunities in light of current market conditions and the degree to which the opportunity complements Covage's existing assets.
Axia owns a 30 percent equity investment in OpenNet which is responsible for providing passive fibre services to every premise in
The majority of the costs being incurred by OpenNet to build and commission the fibre grid will be capitalized during this construction and commissioning phase.
Axia believes that the OpenNet Network will become the network of choice for fixed wireline connectivity by 2015. Axia's share of earnings depends on market penetration. As the market matures Axia forecasts its share of pre-tax earnings to be in the range of SGD$6 million to SGD$14 million per annum.
Newfoundland and Labrador
On
When completed, the GBI will connect more than 1,000 government facilities that include healthcare institutions, libraries, schools, and other offices in communities spanning all regions of the province. It will also enhance the ability of retail service providers to offer similar services to local residential and business customers in Newfoundland and Labrador.
Axia is pleased to have been selected by the Government of Newfoundland and Labrador to deliver on the GBI. As the Corporation moves through the negotiation process, Axia's unique solution will demonstrate Axia's ability to add value to the Government of Newfoundland and Labrador and meet its policy objectives.
New Opportunities
As a result of its success in Alberta,
FY2009 and Q4FY09 Consolidated Financial Information
Consolidated revenue for the quarter was
Net income for the current quarter was
As at
Outlook
Axia's business is based on next generation digital networks that are increasingly seen as critical infrastructure to enable end users to improve their productivity and efficiency. Most of the digital based technology being developed depends on next generation network connectivity. These characteristics are becoming better understood by progressive governments and as a result, next generation network investments are being considered in some jurisdictions as economic stimulus initiatives.
Although the current economic climate appears to be stabilizing, it remains volatile and the global capital markets are unstable. Axia continues to review the level and timing of any future capital commitments for new next generation network opportunities and its ability to raise funds on favourable terms prior to committing to any new contracts. However, as a consequence of the instability in the capital markets, and the low price of its common stock at this time, the Corporation may decide not to pursue certain opportunities.
Conference Call Scheduled
A conference call for the investment community will be held
To participate in the conference call, please dial (416) 644-3426 in
Please call ten minutes prior to the start of the call. A live webcast (listen only mode) of the conference call will be available at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2798620
A replay of the conference call will be available at (416) 640-1917 or 1-877-289-8525, passcode 21314094 followed by the number sign from
About Axia
The audited Consolidated Financial Statements for the year ended
Axia provides Real Broadband(TM) IP services and solutions through planning, designing and operating no conflict Open Access Next Generation Networks. Axia has networks in Alberta,
This News Release contains forward looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions which constitute "forward looking information" within the meaning of applicable Canadian securities laws. These statements are based on our current expectations, estimates, forecasts and assumptions about the operating environment, economies and markets in which we operate and are subject to important assumptions, risks and uncertainties that are difficult to predict. Examples of these statements would include those where Axia forecasts its success and timing in winning new OAN NextGen contracts, the timing of completion and estimated total costs of these networks, the revenues and operating costs associated with these networks over time, and Axia's ability to generate future cash flows and avail itself of other financing alternatives given current market conditions. The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward looking information, include, but are not limited to, changes in customer markets, changes in demand for our services, our inability to deliver services in a timely and cost efficient manner, technological change, general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in our Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. Unless otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward looking statements either as a result of new information, future events or otherwise.
CONSOLIDATED BALANCE SHEETS
(000s) June 30, June 30,
2009 2008
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Assets
Current assets:
Cash $ 10,040 $ 2,210
Short-term investments 14,266 25,867
Restricted short-term investments 4,014 4,763
Accounts receivable 28,083 25,222
Prepaid expenses 2,038 1,326
Future income tax asset 20 24
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58,461 59,412
Property and equipment 69,041 49,373
Intangible assets 8,459 6,699
Goodwill 4,201 4,201
Advances to joint venture - 1,785
Other assets 1,299 816
Investment under equity accounting 3,798 -
Restricted long-term investments 2,915 4,310
Future income tax asset 5,127 4,608
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$ 153,301 $ 131,204
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 37,254 $ 29,826
Income taxes payable 4,479 5,306
Current portion of deferred revenue 4,962 1,061
Current portion of lease obligation 77 284
Current portion of cost of excess space 66 61
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46,838 36,538
Deferred revenue 5,041 1,503
Lease obligation - 77
Cost of excess space 56 115
Shareholders' equity:
Share capital 48,111 48,074
Contributed surplus 3,741 2,893
Retained earnings 44,972 38,986
Accumulated other comprehensive income
Unrealized gain on short-term investments 76 225
Unrealized gain on translation of
self-sustaining foreign operations 4,466 2,793
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49,514 42,004
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101,366 92,971
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$ 153,301 $ 131,204
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CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the years ended June 30, 2009 and 2008
Three months Year ended
(000s except per share amounts) 2009 2008 2009 2008
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Revenue $ 17,277 $ 16,216 $ 69,847 $ 63,805
Cost of products and services
sold 10,773 9,289 41,574 34,850
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Gross profit 6,504 6,927 28,273 28,955
Expenses
Marketing 375 224 1,303 952
Administration 1,948 1,560 5,369 3,918
Business development 1,030 2,406 7,131 8,368
Stock-based compensation 256 20 865 2,299
Net interest and financing
charges (income) (60) (544) (1,467) (2,508)
Depreciation and amortization 1,809 1,369 5,908 4,661
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5,358 5,035 19,109 17,690
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Income before the following 1,146 1,892 9,164 11,265
Share of loss of equity
investment (5) - (325) -
Gain on disposal - - 374 333
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Income before income tax 1,141 1,892 9,213 11,598
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Current income tax 1,044 1,024 4,724 5,031
Future income tax
(reduction) (315) (609) (1,253) (1,534)
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729 415 3,471 3,497
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Net income before
non-controlled interest 412 1,477 5,742 8,101
Net loss attributable to
non-controlled interest - - 244 -
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Net income 412 1,477 5,986 8,101
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Retained earnings,
beginning of year 44,560 37,509 38,986 30,885
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Retained earnings,
end of year $ 44,972 $ 38,986 $ 44,972 $ 38,986
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Net income per share
Basic $ 0.01 $ 0.02 $ 0.09 $ 0.13
Diluted $ 0.01 $ 0.02 $ 0.09 $ 0.13
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Weighted average shares
outstanding
Basic 63,602 63,537 63,602 63,537
Diluted 64,254 66,406 66,578 63,844
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended June 30, 2009 and 2008
Three Months Year Ended
(000s) 2009 2008 2009 2008
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Net income $ 412 $ 1,477 $ 5,986 $ 8,101
Other comprehensive income,
net of tax:
Transfer losses on sale of
short-term investments (35) - 110 -
Unrealized gains (losses)
on short-term investments 39 (73) (227) 193
Unrealized gain on
translation of foreign
operations (1,801) (330) 1,641 4,598
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Other comprehensive income (1,797) (403) 1,524 4,791
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Comprehensive income $ (1,385) $ 1,074 $ 7,510 $ 12,892
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CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30, 2009 and 2008
Three Months Year Ended
(000s) 2009 2008 2009 2008
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Cash provided by (used in):
Operating activities:
Net income $ 412 $ 1,477 $ 5,986 $ 8,101
Items not involving cash
Depreciation and
amortization 1,809 1,369 5,908 4,661
Future income tax
(reduction) (315) (612) (1,253) (1,534)
Share of income (loss)
of equity investment 5 - 325 -
Gain on disposal of
investments - - (374) (333)
Non-controlled interest - - (244) -
Cost of excess space (5) (43) (54) (91)
Stock-based compensation 256 20 865 2,299
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2,162 2,211 11,159 13,103
Changes in non-cash working
capital items 8,201 (3,738) 6,582 (24,481)
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10,363 (1,527) 15,789 (11,378)
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Financing activities:
Decrease (increase) in
restricted cash and
investments (552) (9,063) 2,144 (9,028)
Issue of common shares 10 - 40 226
Repayment of lease obligation (73) (69) (284) (270)
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(615) (9,132) 1,900 (9,072)
Investing activities:
Short-term investments 6,621 14,231 11,601 17,865
Business combinations (615) - (2,985) (2,230)
Reduction in advance to
joint venture - - 1,785 11,710
Investment under equity
accounting (3,347) - (4,123) -
Purchase of property and
equipment (4,351) (2,321) (19,496) (24,629)
Disposal of investment - - 3,382 21
Purchase of property and
equipment included in
accounts payable (3,230) (668) 274 8,020
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(4,922) 11,242 (9,562) 10,757
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Effect of currency
translation on cash
balances (2,671) (5,987) 1,874 1,041
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Decrease in cash 2,155 (5,404) 7,830 (8,652)
Cash, beginning of period 7,885 7,614 2,210 10,862
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Cash, end of period $ 10,040 $ 2,210 $ 10,040 $ 2,210
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%SEDAR: 00002394E
For further information: please visit Axia's website at www.axia.com, or contact: Dawn Tinling, VP, Investor Relations and Communications, Axia NetMedia Corporation, (403) 538-4074, [email protected]
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