PEER 1 Network Enterprises, Inc.
TSX VENTURE : PIX

PEER 1 Network Enterprises, Inc.

February 28, 2007 17:00 ET

PEER 1 Network Announces Second Quarter Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 28, 2007) - PEER 1 Network Enterprises, Inc. (TSX VENTURE: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)
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EBITDA 4,763 3,211

Integration costs 293 365
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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.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • PEER 1 Network Enterprises, Inc.
    Gary Sherlock
    Chief Financial Officer
    (604) 683-7747
    or
    PEER 1 Network Enterprises, Inc.
    Katie Wilson
    (604) 683-7747
    Website: www.peer1.com