TORONTO – Revenues were up but 2013 profits dropped 11% year-over-year at TeraGo due in part to fourth quarter losses.
The company posted annual revenues of $51.4 million for the year ended December 31, 2013, up 5% over $49.2 million in 2012, however, net earnings fell from $4.9 million in 2012 to $4.3 million. EBITDA was $16.5 million for the year, up 8% over $15.3 million in 2012.
Net loss for the fourth quarter was $734,000, versus net earnings of $3.2 million for the same period in 2012. The company said the loss was principally due to $1.3 million in costs incurred for the departure of an executive and recruiting expenses for a replacement, costs related to its Vancouver data centre purchase, and an income tax recovery of $2.5 million recorded in Q4 2012. Revenue of $12.9 million for the quarter increased 3% over $12.6 million in the same period last year, but EBITDA dropped 23% to $3.0 million.
Gross profit margin for the full year and Q4 2013 were 78.0% and 77.0% respectively, compared to 77.6% and 77.9% for the same periods in 2012.
Data centre services generated $1.6 million in revenue in 2013, and the company said that the integration of Data Centers Canada with the company's core business is progressing as planned and data centre services will continue to contribute to the Company's growth.
TeraGo ended the year with 6,453 net access customer locations in service, down from 6,575 at the end of 2012. Net access customer locations decreased by 80 in Q4 2013, compared to an increase of 73 of the same period in 2012, primarily due to increased competition in higher capacity services.
New president and CEO Stewart Lyons described 2013 as “a year of continued progress and growth”.
“We envision 2014 as a year of transition and transformation into an IT services company, leveraging our leading position in broadband access services with the continued growth of a complementary data centre services capability”, he said in a statement. “Key steps in this transformation include rounding out our operational and business development team, evolving our go to market strategy, and expanding our data centre footprint and services suites to win a greater share of both existing and new customers' needs. Our aim is to drive improved returns on assets for our shareholders through accelerating growth over time."
