iWeb Communities: Blog

We are proud to announce a new 22M$ financing agreement with Goldman Sachs, a leading global investment banking. To learn more about the terms of this agreement, we invite you to read the
complete press release.

This agreement will cover iWeb’s financial requirements for the long term growth of the company’s data centers, as well as its dedicated server leasing and web hosting operations. “With this agreement, Goldman Sachs will provide financing to allow us to further our business objectives.” declared Eric Chouinard, iWeb Chief Executive Officer.

“A deal of this magnitude will allow us to continue investing in the infrastructures which are vital to maintaining our growth, which has been outstanding thus far.“ added Marc Guindon, Vice-President and Chief Financial Officer. Thank you to all of our customers, for being a part of what iWeb is today.

iWeb Group Inc. (TSX.V : IWB), a worldwide provider of Internet hosting services and IT infrastructure and Goldman Sachs Credit Partners L.P. (“Goldman Sachs”) today announced a $ 22M financing agreement.   

“With this agreement, Goldman Sachs will provide financing to allow us to further our business
objectives.” declared Eric Chouinard, iWeb Chief Executive Officer.

“A deal of this magnitude will allow us to continue investing in the infrastructures which are vital to maintaining our growth, which has been outstanding thus far. “  added Marc Guindon, Vice-President and Chief Financial Officer. iWeb will initially receive $ 10M USD in senior debt, 5 years, 16% and $ 1M in common shares will be issued to Goldman Sachs at $ 1.30 per share, these common shares will be subject to a four-month hold period. A subsequent $ 1M in shares will follow at $ 1.30, subject to certain market conditions.

Under the second part of the agreement, Goldman Sachs can provide an additional  $ 8M in senior debt with $ 2M in shares to be issued at market price, all subject to certain conditions and performance indicators.  This agreement will cover iWeb’s financial requirements for the long term growth of the company’s data centers,
as well as its dedicated server leasing and web hosting operations.   Share prices are in CAD unless otherwise specified 

About iWeb Group Inc.
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Founded in 1996,
iWeb is today one of the leading Canadian providers of advanced IP hosting services through shared hosting, dedicated servers or co-location in three data centers, featuring over 48,000 square feet of floor space and the latest technological equipment. iWeb provides services in English, French and Spanish to more than 14,000 clients from more than 135 countries. For more information, please visit the Company’s website at www.iweb.com.

Caution concerning forward-looking statements
———————————————
This news release contains certain forward-looking statements. These statements relate to future events or iWeb’s future economic performance and reflect the current assumptions and expectations of management.

Certain unknown factors may affect the events, economic performance and results of operations. iWeb undertakes no obligation, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

For further information:  Bernard Dahl, Director, Communications and Public Relations, iWeb Group Inc. (514) 286-4242 ext. 115, bdahl@iweb.com Marc Guindon, Vice-President and Chief Financial Officer, iWeb Group Inc. (514) 286-4242 ext. 121, mguindon@iweb.com

A new vulnerability has recently been discovered, which affects the reverse lookup of the domain name system (DNS).  An attacker could use this vulnerability to transfer a domain name towards a specific IP address.

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We are happy to announce that we will soon be completing our network expansion to upgrade our total network capacity to 15Gbps while adding three new carriers. The addition of these three new transit providers will mean better diversity, redundancy and reachability for all our customers and partners.

With these additional transit providers, iWeb will be directly linked to more networks which will result in connections being more direct and more efficient for all our customers. These additions will affect mostly the High Quality Network customers, but will also enhance incoming routes for our Redundant Unmetered Network customers; while also providing additional redundancy.

Which new carriers will be added to iWeb’s High Quality Network? 

• T-Systems / Deutsche Telekom (In production)
• 3Men@Work / Bell Peering (In production)
• Level 3 Communications   (Coming at the end of August)

Unmetered Network upgrade:  

• Additional Cogent Bandwidth

Once all the upgrades will be completed, iWeb’s network will have a total network capacity of 15 Gbps dedicated to hosting services. The High-Quality Network and incoming routes will combine the networks of 7 carriers for a total of 11 Gbps, while the Redundant Unmetered Network (Cogent-based) now totals 4 Gbps. It is important to note that each part of iWeb’s network (High Quality and Unmetered) is configured to backup the other if necessary and that customers of both networks benefit from all available routes for incoming traffic. For a real-time overview of iWeb’s network usage, please have a look at the network usage page on our web site. 

Here is complete list of our network composition:  

• 3 Gbps with Videotron Telecom
• 3 Gbps with Tata Communications, formerly Teleglobe
• 4 Gbps with Cogent Communications (Unmetered Network)
• 1 Gbps with Peer1 Network
• 1 Gbps with Priority Colo (TorIX peering)
• 1 Gbps with Level 3 Communications (Coming at the end of August)
• 1 Gbps from 3 Men @ Work (Bell peering)
• 1 Gbps from T-Systems / Deutsche Telekom

iWeb’s first telecom link, back in 2000, was a whopping 100 Mbps link !!! In other words, our first link had less than 1% of the capacity we offer our to iWeb customers today. In the next few months, we also expect to upgrade our main transit providers to 10Gbps, stay tuned for more details!  

We released today our financial results for the third quarter of fiscal year 2008, ended June 30, 2008. The Company’s full interim financial statements and MD&A are available at www.iweb.com and www.sedar.com.

Third quarter highlights :

• Revenue increased 57% to $4.1 million for the three months ended June 30, 2008;
• Adjusted EBITDA¹ increased to $1.0 million for the third quarter of 2008;
• Infrastructure work has begun on the fourth and final phase of the Couture Data Center;
• An additional $2.7 million of annually recurring revenue generated in the third quarter.

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MONTREAL, QUEBEC – August 12, 2008 – iWeb Group Inc. (TSX-V : IWB) (“iWeb” or the “Company”), a worldwide internet hosting infrastructure provider, today released the financial results for the third quarter of fiscal year 2008, ended June 30, 2008. The Company’s full interim financial statements and MD&A are available at www.iweb.com and www.sedar.com.

Third quarter highlights :

- Revenue increased 57% to $4.1 million for the three months ended June 30, 2008, compared to $2.6 million for the same period in 2007;
- Adjusted EBITDA¹ increased to $1.0 million for the third quarter of 2008, compared to $0.7 million for the same period in 2007;
- Infrastructure work has begun on the fourth and final phase of the Couture Data Center;
- An additional $2.7 million of annually recurring revenue generated in the third quarter.

“Revenues have continued to grow steadily in the last quarter,” explains Eric Chouinard, President and CEO of iWeb. “This progress confirms the effectiveness of recently implemented strategies to support our growth: the new web site, launched in March, improved management of advertising strategies, and a new operational structure in the Company’s sales department. Combined with our standard operations, these strategies are generating remarkable results. In the past three months, we have added $2.7 million in annual recurring revenue to our existing revenues, which bodes very well for the upcoming quarters. ”

Third Quarter of 2008 Financial Review

Revenues for the third quarter ended June 30, 2008 totalled $4.1 million, compared to $2.6 million for the same period of 2007, an increase of $1.5 million, or 57%.

The gross profit margin for the quarter was 49%, compared to 59% for the same period 12 months ago. The strength of the Canadian dollar compared to the U.S. dollar is the main reason for this decrease. The majority of iWeb’s cost of services sold is expensed in Canadian dollars, as opposed to revenues, which are perceived mostly in U.S. dollars. In addition, costs attributed to the co-location site on Nun’s Island, which was brought online on May 1, 2008, have affected the gross profit margin, given the modest revenues recorded thus far for this data center.

Operating expenses have increased, from 47% of revenues one year ago, to 49% of revenues for the third quarter. These additional operating expenses are the result of higher financing costs, due to increased debt facilities, this despite a decrease in sales expenses, the result of the improved management of advertising strategies.

Adjusted EBITDA increased to $1.0 million, or 23% or revenues for the third quarter ended June 30, 2008, compared to $0.7 million, or 27% of revenues for the three months ended June 30, 2007.

Net earnings for the quarter ended June 30, 2008 are close to break-even, at $13,210 or $0.0005 per share compared to $200,848 or $0.0085 per share for the corresponding period of 2007. This decrease in net earnings is the direct result of the lower gross profit margin.

Key Financial Data

*As at September 30, 2007

¹ The Company defines Adjusted EBITDA as Earnings before interest, taxes, depreciation and amortization, and stock-based compensation.

About iWeb Group Inc.
Founded in 1996, iWeb is today one of the leading Canadian providers of advanced IP hosting services through shared hosting, dedicated servers or co-location in three data centers, featuring over 48,000 square feet of floor space and the latest technological equipment. iWeb provides services in English, French and Spanish to more than 14,000 clients from more than 135 countries. For more information, please visit the Company’s website at www.iweb.com.

Caution concerning forward-looking statements
This news release contains certain forward-looking statements. These statements relate to future events or iWeb?s future economic performance and reflect the current assumptions and expectations of management. Certain unknown factors may affect the events, economic performance and results of operations. iWeb undertakes no obligation, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.

For more information:

Marc Guindon
iWeb Group Inc.
Vice-President and Chief Financial Officer
514-286-4242 ext. 121
mguindon@iweb.com

Bernard Dahl
iWeb Group Inc.
Director, Communications and Public Relations
514-286-4242 ext. 115
bdahl@iweb.com

After its original launch in English and French in march, the new iweb.com is now available in Spanish! Olé!

Originally planned for summer 2008, the latin site is officially online since 8:00 PM Montreal time, and will offer all iWeb hosting services in Spanish at the following address: http://es.iweb.com. Though the entire site now available in three languages, you may notice that our team is still working on the ordering process (currently available in English and French), the backend and that our blog does not yet have a spanish version … we are working on it.

Over the past several months iWeb has multiplied the services offered to spanish speaking customers, including the addition of spanish speaking account managers, customer service agents and support technicians. We hope our efforts will facilitate the work of system administrators and web entrepreneurs everywhere in the world, who can now work with their web hosting provider in their mother tongue.

Gracias!