iWeb Communities: Blog

A new series of articles are coming up on the iWeb blog. Every wednesday, you will meet virtually one of our staff. The starred employee will be delighted to answer your questions and feedback.

Name : Steph Bertini
Your favorite quote : The best way to make your dreams come true is to wake up
Job : Senior Account Executive Business Services
Drafted by iWeb in : 2007
Datacenter : iWeb-CO
Background : Entrepreneur
Favorite Drink : Chivas on the rocks
Favorite Food : Pasta
Favorite Music : Rock

At iWeb, my job is.. Manage and bring in new colocation customers.

I can’t imagine working at iWeb if.. there was not that great bunch of collegues who have me laugh at them and at myself.

Tell me again this crazy story at iWeb about.. Every story is crazy at iWeb.

I think the colocation market is now.. up for grabs and ready for a top of the line company like iWeb.

Free text, tell me something in 140 letters.. Watch out, here we come!!!!!!

IT infrastructure outsourcing is helping businesses innovate while containing costs; iWeb announced its financial results for the second quarter of 2009.

Second Quarter Highlights:  

• Revenues have increased by 94%, reaching $6.9 million for the second quarter; almost doubling the performance for the same quarter of 2008
• Adjusted EBITDA of almost $2.0 million for 2009, or 28.5% of revenues
• Operating income of $324,000, compared to $6,000 12 months earlier
• Net loss of $246,000, following the additional unrealized theoretical exchange lost on long-term debt in U.S. dollars

“Our revenue growth is consistent, almost double what it was 12 months ago.” said Eric Chouinard, iWeb President and CEO. “And, with operating income over $300,000, EBITDA close to $2 million, which is nearly 30% of revenues, the strength and full potential of our business is becoming easier to understand”.

“Monthly revenues reached the $2.4 million mark in March, though we have to work even harder to maintain that pace, given the current economic context.” adds Martin Leclair, President, Products and Technology. He then said that “In recent months, we noticed a slowdown in new net recurring revenues, mostly due to an increase in the churn rate. This increase in churn is mainly attributable to current clients who are downsizing the level of certain services which were not considered essential at this time. We believe that these same services will be reintroduced when our customers’ situation will allow them to pursue more ventures.”

“The strong improvement of our operations, in terms of profitability, is not yet reflected in our net results.” indicates Philip Tousignant, Chief Financial Officer. ” Due to financial expenses resulting from external market conditions, totalling $560,000 for the last quarter, we are reporting a net loss. For the second consecutive quarter, the main element of these financial expenses is the unrealized exchange loss on the long-term debt of $10 million US.”

Read the full press release.

MONTREAL, QUEBEC – May 20, 2009 – iWeb (TSX-V: IWB), a global provider of Internet hosting services and IT infrastructure, today released its financial results for the quarter ended March 31, 2009. The complete interim financial statements and management report of the Company are available on the websites www.sedar.com and www.iweb.com.

Second Quarter Highlights:

• Growth in revenues of 94%, from $3.6 million to $6.9 million for the second quarter ending March 31, 2009, compared to the same period in 2008
• Adjusted EBITDA of almost $2,0 million for 2009, i.e. 28.5% of revenues
• Operating income of $324,000, compared to $6,000 for the same period of the preceding year
• Net loss of $246,000, following the additional unrealized theoretical exchange lost on long-term debt denominated in U.S. dollars

“Our revenue growth is still continuing on the trend of the first quarter with an increase of more than 90% over last year.” said Eric Chouinard, iWeb President and CEO. “In addition, profitability in terms of operation is demonstrated, as indicated by the operating income of more than $300,000 for the last quarter. EBITDA reaches almost $2 million, at nearly 30% of revenues. These are many factors showing the strength of our operations”.

“Monthly revenues reach the $2.4 million number for the month of March 2009. But, we have to work harder in order to keep that trend, given the current economic context. We noticed a slowdown in the level of our new net recurring revenues for the last few months, due to the increase in our churn rate. This increase in churn is mainly attributable to present customers who are downsizing their level of services, in order to adjust to the difficult financial times. We believe that these customers will reorder these services when the economy is back on tracks.” adds Martin Leclair, President, Products and Technology.

 “In spite of the strong improvement of our operations in terms of profitability, it is still not apparent on our net results.” indicates Philip Tousignant, Chief Financial Officer. “Once again, due to financial expenses resulting from external market conditions totalling $560,000 for the last quarter, we are reporting yet another net loss. The main element of these financial expenses is the unrealized exchange loss on the long-term debt of $10 million US.”

Second quarter Financial Review

Revenues for the second quarter ended March 31, 2009 increased by $3.4 million or 94%, compared to the same period of 2008, to reach almost $6.9 million.

Revenues for the second quarter of fiscal 2009 originated from iWeb’s three main service offerings as follows: Dedicated servers accounted for 85%, followed by 8% for co-location services and 7% for the shared web hosting. 78% of iWeb revenues for the quarter were generated in U.S. dollars, a significant advantage for the Company during the last quarter, as the impact of the decrease in value of the Canadian dollar against the U.S. dollar compared to the same period of last year, had a positive impact of more than $1.0 million on revenues. Without taking into account this impact, revenues would have increased by 65% compared to the quarter ended on March 31, 2008.

Gross profit was 51% of revenues for the second quarter of 2009 compared to 53% for the same period of the previous year. The favourable impact of the variation of Canada/U.S. exchange rates on gross profit margin for the last quarter was more than compensated by higher payroll expenses in order to support the sustained high growth of the Company’s operations.

Operating expenses for the quarter went from 52.1% of revenues in 2008 to 46.3% in 2009.  This improvement is explained by lower costs compared to the revenues for selling and administrative expenses, but compensated by a rise in interest expenses. Selling expenses decreased from 17.3% to 15.3% of revenues for the quarter ended March 31, 2009. Administrative expenses decreased from 26.0% to 20.2% of revenues for the quarter ended March 31, 2009. Interest expenses increased significantly (from 7.2% to 10.9% of revenues for the second quarter of 2009). This is caused by the increase in long-term debt in order to support the important addition of the infrastructures of the Company, the greater part of which carry interests in U.S. currency.

The operating income of the Company was $324,000 for the quarter ended March 31, 2009, compared to $6,000 for the corresponding period of the preceding year. 

The other financial expenses represent elements which are the consequence of the external conditions of the market. These expenses amounted to $560,000 for the last quarter ended March 31, 2009. The most important element of these expenses is the unrealized exchange loss on the long-term debt of $10 million US. For the end of quarter ended March 31, 2009, the Canada/U.S. exchange rate was 1.26, compared to 1.225 for the beginning of quarter, explaining the unrealized loss of $356,000.

Taking into account the impact of the other financial expenses, the Company recorded a net loss of $246,000 for the second quarter of 2009, compared to a net income of $19,000 for the quarter ended March 31, 2008.

Key Financial Data (in thousands of Canadian dollars)

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

About iWeb Group Inc.

iWeb is a worldwide provider of Internet hosting services and IT Infrastructure, with three secure data centers in Montreal. Since 2004, the company’s compounded annual growth rate has been above 75%, making it one of Canada’s 100 fastest growing companies according to PROFIT Magazine.

Founded in 1996 in Montreal, iWeb now generates more than 60% of its revenues from abroad; and employs over 170 full-time employees providing Dedicated Server Hosting, Co-location and Web Hosting services to more than 21,000 customers in 150 countries. iWeb’s shares are listed on the TSX Venture Exchange (TSX-V : IWB); for more information please consult the Company’s website: http://about.iweb.com

Webcom 2009 was scheduled May 13th with many famous speakers. There were people from Google, Salesforce and Yahoo amongst others. I went to several tracks during the day and I found it interesting to compare what we were doing at iWeb to what the speakers were saying. So here a quick summary of iWeb vs speakers.

Sales, marketing and 2.0 products: Do more for the Facebook era? – Clara Shih of SalesForce

A great speaker which said mainly that each company should be on Facebook because everyone is on this website. There was a brief moment where the speaker talked about advertising on Facebook and overall, it could be summed up to “very targeted customers”. You can advertise very easily, quickly, and at low cost to reach very targeted users

For us, iWeb, we are involved heavily on Facebook with a fan page, a group and exclusive promotions for people on those 2 spaces. We also have several videos on Facebook and we get many comments on our pages. We also have good interactions with our customers, in a more friendly setting and we love that. Do you want to be our friends?

We will begin in a few days testing targeted advertising to see the results. We believe we’ll do well because we can search for the exact kind of customer we target. We can look for people with sys-admin, programmers or other keywords like video. There is practically no limits to Facebook’s platform, and if you have time, try it out.

Ergonomy optimization: Do better with Less!- Anastasia Simitsis of w.illi.am

This was a presentation which made me think we might have too much text with iWeb.com. This stroke me: “For the web, write your content and now, cut it in half!”. We are currently redoing several sections of our website and I think I am going to put that sentence in my signature when we will see what text to put online.

The speaker also demonstrated how complicated it was for a few websites to order. To get a user to buy on your website, you must show very obviously how to go the next step of the buying process, the order! She advises a clear button, with a striking color and a clear message so that the customer can see in blink of an eye how to get the product.

On that last point, I think iWeb is doing very good with its orange buttons “Order now”. It can’t be much clearer, I think.

There were many other presentations during the conference with people like Sylvain Carle of Praized, Simon Lamarche of Adviso, and Marc Canter from BroadbandMechanics. With the magic of the Internet, you can now watch the Webcom 2009 presentations on their website

Congratulations to the Webcom Montreal 2009 team and see you next year!

Since the beginning of this year, we have introduced more ways to reach iWeb, with a focus on reaching iWeb customers and also potential users of iWeb who don’t have the time to read the iWeb blog or who would like to get updates on their favorite websites.

Recently, we have added yet more tools that would let you contact, discuss or know more about iWeb:

• Blog posts published on this blog can be received by email, with the feature accessible on the right sidebar. You will then get email updates every day.
• Of course, there is also a wide variety of RSS feeds, from the RSS feed of the status pages, the feed for the iWeb Tech News Highlights, the feed for the main blog (without the tech news highlights) etc.
• There is the iWeb Technologies youtube account, where we publish videos of our 3 data centers, as well as typical quick youtube videos
• Our Twitter account @iweb has now more than 740 followers, and growing every day. Get there to follow updates. We follow back, we can help you if you are looking to buy, we will answer questions, and we will also help in case you need that little extra push with customer service.
• NEW: We also now have the @iwebstatus twitter account, where sys-admins and webmasters can get access to a dedicated twitter account, with the same updates as found in this page. What you can do for instance is to get updates from @iwebstatus to your mobile phone, by SMS.
• NEW: We have an active Facebook page, where we publish pictures, videos, informal updates about the company, as well as links for deals. There used to be a Facebook group, but a Facebook page is much more practical for Facebook users, since it integrates into their homepage
• NEW: In the same spirit, there’s also the iwebtech Flickr account where you can see pictures of the data centers, and behind-the-scenes moments
• There is also an official LinkedIn group, for those interested in jobs, but also news for the profesionnal networking website.

This means that we’ve got most communication medium covered, and I hope you find one suitable to your online habits. We’re planning to cover more (newsletter are missing for instance and it’s in the next to-do list), stay tuned for more info, and don’t hesitate to reply or comment, we love customer feedback.

The iWeb Tech News Highlights covers web hosting, web development, web design and general technology news and is published at 8.00am EST. For May 12th, here are the highlights:

• FlairBuilder is a very interesting prototyping tool for user interface designers. Unlike Balsamiq or iPlotz, FlairBuilder makes it possible to create actionable prototypes
• Hadoops sorts a Terabyte of data in 62 seconds
• Laconica is an open source micro-blogging platform. Interesting if you want to provide a Twitter-like service for your employees or for an organization
• Python programmers: Pattern matching in Python