Web Host iWeb Reports 92% Jump in Revenues

Dedicated Web hosting accounts for 85% of the revenues in 1Q of fiscal 2009.

March 1st, 2009 - MONTREAL, QUEBEC - iWeb (TSX-V: IWB), a global provider of Internet hosting services and IT infrastructure, today released its financial results for the quarter ended December 31, 2008. The complete interim financial statements and management report of the Company are available on the websites www.sedar.com and www.iweb.com.

First Quarter Highlights:
• Revenue increased 92% to $6.1 million for the quarter ended December 31, 2008, compared to revenues of $3.2 million for the same period in 2007
• Adjusted EBITDA grew to $1.6 million, or 26% of revenues
• New annual recurring revenues of $2.8 million generated during the first quarter.
• Operating income at break-even
• Net loss of $1.2 million, after taking into account the unrealized, theoretical exchange lost on the long-term debt denominated in U.S. dollars

“Our revenues are continuing their rapid growth, constantly reaching new heights.” proudly states Eric Chouinard, iWeb President and CEO. “Since November, our monthly billing has exceeded $2 million! With new annual recurring revenues of $2.8 million generated in Q1 and a more favorable CAD/USD exchange rate, we are maintaining the pace of our growth plan.

“Given the current economic context, we are constantly adapting our marketing strategies to generate new revenues,” adds Martin Leclair, President, Products and Technology. “We are also actively working on the major restructuring of customer service, which now operates with three distinct and specialized groups. With 24/7 availability required for support services, the planned structure is already showing signs of success; all of which is aimed at helping our clients and improving the support we provide with our services. ”

“Our operating results clearly show a stable level of profitability,” said Philip Tousignant, Chief Financial Officer. “We are still above the break-even point and our Adjusted EBITDA has doubled since last year, totaling $1.6 million; that’s 26% of revenue. However, the accounting results show a significant loss for the quarter, following the booking of financial expenses resulting from external market conditions. These costs amount to $1.4 million for the last quarter, the most important element of which is the unrealized exchange loss on the long-term debt of $10MUSD. Since the long-term debt is in USD, it is affected by the current exchange rate. During the quarter, the CAD/USD exchange rate rose from 1.06 to 1.225, causing the unrealized loss of $1.6 million on long-term debt. ”

First quarter Financial Review
Revenues for the quarter ended December 31, 2008 reached $6.1 million, an increase of $2.9 million. It is 92% higher than revenues recorded for the same period twelve months earlier.

Income for the first 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 revenues for the quarter were generated in U.S. dollars, a significant advantage for the Company given the weakness of the Canadian dollar to the U.S. dollar. Compared to the same period of the previous year, this has had a positive impact of $720,000 on earnings. Even excluding this, revenues would still have increased by 69% compared to the same quarter one year ago.