iWeb Communities: Blog

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