MetroBridge Networks Announces Second Quarter 2008 Results

Highlights

- Revenue increased $1.0 million reaching $1.9 million in the quarter, up from $0.9 million year over year and $0.4 million quarter over quarter

- Gross margin, excluding amortization, was flat at 63% of revenue year over year

- EBITDA loss was $0.4 million, up $0.1 million year over year and down $0.3 million from $0.6 million quarter over quarter

- Customer Locations* reached 4,775 in the quarter, up from 887 year over year and up from 4,635 quarter over quarter

- Customer Churn* was 0.92% up from 0.89% year over year and down from 1.23% quarter over quarter

- On May 29, 2008, holders of the Company's $1.7 million in unsecured Convertible Debentures converted to common shares or extended the term of the Convertible Debentures. A total of $1.0 million in Convertible Debentures were converted into 6,867,616 common shares of the Company at $0.144 per share. Holders of the remaining portion of unsecured Convertible Debentures, $0.7 million, extended their maturity to June 29, 2009 and their conversion rights or coupon remained unchanged.

"MetroBridge's second quarter results show the strong organic growth resulting from our continued focus on enterprise-level contracts. We're expanding our enterprise-level network in Utah and anticipate securing additional accretive acquisitions in the future to enter new markets," said Dorian Banks, President and Co-Founder of MetroBridge. "We're seeing strong demand for our growing suite of value-added products and services. They serve as traction with existing customers and are driving new sales. We're taking steps to bolster our operational efficiencies as we drive towards positive EBITDA and cash flow," added Banks.

First Quarter Financial Results

Total revenue for the quarter ended June 30, 2008 was $1.9 million compared with $0.9 million for the quarter ended June 30, 2007. The increase in revenue was driven primarily by the positive impact of a full quarter of the Utah acquisition, as well as by strong organic growth in existing markets.

Gross margin, excluding amortization, was flat at 63% for the second quarter of 2008 compared with the second quarter of 2007, in line with our expectations going forward.

Operating expenses increased to $2.0 million compared with $1.0 million for the second quarter of 2007. The increase was due primarily to expenses associated with additions to our sales force, administrative personnel and infrastructure to support the Company's new Utah market, as well as corporate costs associated with mergers and acquisitions and financing activities. We do not expect increases in operating costs going forward until we enter another new market, and in the interim we expect these costs to decrease.

EBITDA loss was $0.4 million down from $0.6 million quarter over quarter and flat year over year.

MetroBridge reported a net loss of $2.2 million or $0.05 per share for the second quarter of 2008, compared to a net loss of $0.6 million or $0.02 per share for the second quarter of 2007. -- www.cnxmarketlink.com