Web hosting and IT infrastructure provider PEER 1 reports that normalized EBITDA increased by 23%.

VANCOUVER, BC – November 13, 2008 – PEER 1 Network Enterprises, Inc. (TSX: PIX, or “the Company”), a leading provider of online IT infrastructure, today announced the results for the three months ended September 30, 2008. All amounts are stated in US dollars.

Selected Financial Highlights comparing the quarters ended September 30, 2008 and 2007:

* Revenue increased 12.1 % to $23.5 million from $21.0 million;
* Gross profit increased 16.6 % to $10.5 million from $9.0 million;
* Operating income increased 24.0% to $3.5 million from $2.8 million;
* Normalized EBITDA increased 23.1% to $7.4 million from $6.0 million;
* Normalized EBITDA margin increased to 31.4% compared with 28.6%; and
* Net income increased by 38.5% to $1.73 million, compared with $1.25 million.

Operational highlights:

* On August 8th the Company took over customer billing, ticketing and provisioning from the third party that was previously responsible for its managed hosting customers. By eliminating the barrier of a third party provider and consolidating these functions, PEER 1 can enhance the customer experience through better visibility into the trends affecting its customers, increased responsiveness, and reduced time-to-market for new products and services.
* The Company entered into an agreement that will expand its leased data centre facility in Herndon, Virginia adding 8,614 square feet of additional contiguous space, and increasing the Company’s capacity by approximately 2,880 servers. Occupancy is scheduled for the first quarter of calendar year 2009.

“While a small percentage of our customers have started to feel the effects of the economic slowdown, overall we continue to see good demand for our core services,” said Fabio Banducci, President and CEO of PEER 1. ”PEER 1’s strategic position, financial strength, and organizational flexibility will allow us to emerge from this period in an even stronger competitive position.”

First Quarter Review

Revenues increased by 12.1% to $23.5 million for the three months ended September 30, 2008, compared with $21.0 million for the same period in 2007. On a quarter-over-quarter basis, revenues increased by 0.5% compared with $23.4 million for the three months ended June 30th 2008, and increased by 1.2% when adjusted for the effects of foreign exchange.

Managed and dedicated hosting revenues increased by 15.1% to $16.8 million for the three months ended September 30, 2008, from $14.6 million in the same period of the previous year. Compared with $16.4 million for the three months ended June 30th 2008, managed and dedicated hosting revenues increased over the previous quarter by a combined 2.4% as a result of continued organic growth.

Co-location revenues increased by 8.3% to $3.14 million for the three months ended September 30, 2008, from $2.9 million for the same period in 2007. Co-location revenues decreased by 3.0% compared with $3.24 million for the three months ended June 30th, 2008. This decrease is primarily attributable to the effect of foreign exchange on Canadian co-location revenues. PEER 1’s growth in this segment will be constrained until new facilities are found in key markets. However, PEER 1 expects that as data centre space is added, co-location revenues will increase.

Bandwidth revenues increased by 2.0% to $2.4 million for the three months ended September 30, 2008, compared with $2.3 million in the same period of the previous year. On a quarter-over-quarter basis, bandwidth revenues decreased by 4.4%, primarily as a result of foreign exchange fluctuations.