CALGARY, Alberta, Canada, Feb. 28, 2003 (PRIMEZONE) -- Cybersurf Corp. ("Cybersurf") (TSX Venture Exchange:CY), one of Canada's leading Internet technology companies, today reported financial results for the three months and six months ended December 31, 2002. The company, which develops Internet-related software products and services and operates one of Canada's leading Internet services, generated $1,633,538 in operating revenue for the three months ended December 31, 2002 compared to $1,728,219 for the same period of the prior fiscal year. This 5% decline in operating revenue for the current quarter was due to an extremely high conversion rate of free Internet users to the new fee-based 3webXS service in the prior year, followed by a brief but unusually high cancellation rate. These conversion anomalies were immediately rectified and user cancellation rates had returned to industry standards upon completion of the user conversion. Despite this, the Corporation was poised to record its best quarterly operating results since launching its 3web Internet service, however due to higher general and administrative expenses as a result of the contested shareholder meeting and the subsequent court challenge of the Chairman's rulings, initiated by the dissident shareholder, Mercury Partners and Company Inc., this result was not achieved. Following a positive court ruling, Cybersurf is seeking to recover some of these costs. Cybersurf's balance sheet remained strong with working capital of $ 6.6 million, and no debt, at December 31, 2002.
"Cybersurf's performance this quarter reflects the company's ability to maintain its 3web dial-up subscriber base while aggressively pursuing the deployment of a competitively priced high-speed Internet service," said Paul Mercia, President and CEO of Cybersurf. "While the potential for continued growth in the market for dial-up Internet services exists, cable high-speed Internet is clearly a service that Canadians want, and Cybersurf plans to become the first independent Internet service provider to successfully capitalize on this demand. We continue to move ahead on this front despite the challenges presented by this highly regulated industry, and we will provide shareholders with periodic updates on our progress. In an effort to further strengthen the 3web brand and generate revenue, we also were able to continue to build consumer awareness of our value-added services 3webLD and 3webTLC this quarter."
In the first six months of fiscal year 2003, Cybersurf moved forward by increasing operating revenues while at the same time decreasing communications costs, salary and benefits, when compared to results for the same period of the prior fiscal year. The Company generated $3,287,733 in year to date operating revenues, representing a 22% increase in operating revenue compared to the same period of the prior fiscal year. Operating revenues from the company's 3webXS service for the six months ended December 31, 2002, rose 24% when compared to results for the same period last fiscal year.
FINANCIAL SUMMARY
3 months 3 months 6 months 6 months
ended ended ended ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
Cash & Prepaid
Communication
services $6,009,713 $11,759,846 $6,009,713 $11,759,846
Working
Capital $6,579,444 $11,286,669 $6,579,444 $11,286,669
Operating
Revenue $1,633,538 $1,728,219 $3,287,733 $ 2,695,893
Operating
loss $1,270,525 $ 964,736 $2,542,937 $ 2,992,428
Earnings/
(Loss) per
Share ($0.05) ($0.03) ($0.09) ($0.09)
Fiscal 2003 Highlights
-- Increase in year to date operating revenues by 22% compared to prior
year results.
-- Decrease in communications costs, salary and benefits of 12% compared
to prior year results.
-- High-speed intersections between Cybersurf and the cable companies
nearing completion.
-- Cybersurf in negotiations with a number of possible accretive
acquisition targets.
Fiscal 2003 Outlook
-- Continued expansion of the subscriber base, organically and through
acquisitions.
-- Further development of complementary products and value-added services
such as a residential high-speed Internet service, commercial
high-speed services and Hosting, to expand the Company's operating
revenues.
About 3web Corp.
3web Corp. is Canada's largest independent Internet service provider, having served hundreds of thousands of Canadians from coast to coast since 1998. Through its 3webXS service, 3web provides its subscribers with premium, unlimited Internet access at a fraction of the cost of other competing services. 3web provides service in 30 major centres including Barrie, Calgary, Chicoutimi, Edmonton, Gatineau (formerly Hull), Guelph, Halifax, Hamilton, Kingston, Kitchener, London, Montreal, Newmarket, Oshawa, Ottawa, Peterborough, Quebec City, Saint John, St. Catharines, St. Jerome, St. John's, Sherbrooke, Sudbury, Thunder Bay, Toronto, Trois Rivieres, Vancouver, Victoria, Windsor and Winnipeg. Canadians are invited to visit www.get3web.com to download the latest version of the 3webXS software. 3web also operates a national long distance service under the brand 3webLD.
About Cybersurf Corp.
Cybersurf operates through two separate wholly owned subsidiaries, Cybersurf Technologies Corp. and 3web Corp. Cybersurf Technologies Corp. is responsible for the development of Internet-related software products and services, and for all implementation and licensing initiatives pertaining to these unique technologies. The software developed by Cybersurf Technologies Corp. creates revenue opportunities for any Internet company focused on client acquisition, content delivery or advertising revenue, elements vital to any company in the Internet sector.
3web Corp. utilizes Cybersurf Technologies Corp.'s products and services in its national Internet service. 3web Corp. is the first business model to showcase the various proprietary software applications developed by Cybersurf Technologies Corp.
Forward Looking Statements: This news release may contain certain forward-looking statements. All statements, other than statements of historical fact, included herein, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and Cybersurf does not undertake an obligation to update forward-looking statements should conditions or management's estimates or opinions change. For more information about Cybersurf and 3web, please visit www.cybersurf.com and www.3web.com.
Cybersurf's common shares trade on the TSX Venture Exchange (TSX:CY). The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.
For more information, please contact: investor.relations@cybersurf.com.