TORONTO – Despite a 2.4% gain in revenue, TeraGo saw first quarter profits plunge 182%.
Total revenue for the three months ended March 31, 2014 was $12.9 million, down from $12.6 million for the same period in 2013. However, the company posted a net loss of $1.1 million compared to net earnings of $1.3 million year-over-year.
Adjusted EBITDA for the period was $3.8 million, down 12% from $4.3 million for the same period last year, due to a decrease in access revenue and selective investments in sales and marketing. Gross profit margin was 77.7%, down slightly from 78.0% for the first quarter last year.
Net access customer locations increased by 22 in the first quarter 2014, ending the period with 6,475 net access customer locations in service, compared to 80 net access customers locations lost in the fourth quarter of 2013 and 12 net access customer locations lost in the same period in 2013.
President and CEO Stewart Lyons said TeraGo “made a solid start to what is planned to be a transitional and transformational year”.
"TeraGo's objective remains to transform our leadership in broadband services into a multi-product IT services company, controlling more of the value chain to serve the growing business need for data center and cloud services, and enhance the loyalty of our unique base of small and medium businesses across Canada”, he said in a statement. “With the progress made in Q1, we are well-positioned for Q2 and are moving onto our next steps in in rolling out our strategy. In short, we are focused on achieving growth in data centers; establishing a presence in cloud services, and creating stability in access services to drive improved returns on assets for our shareholders."
