LONDON, June 6, 2007 (PRIME NEWSWIRE) -- IT Group Holdings, Inc. (OTCBB:ITGL) announced financial results for its first quarter 2007.
First Quarter Results
For the three-month period ended March 31, 2007, revenues increased to $6,077,531 from $5,221,769 for the same period in 2006, an increase of $855,762 or 16 percent. Such increase is attributable to a higher number of customers and the addition of resellers (service providers).
Gross profit was $365,337 for the three month period ended March 31, 2007, compared to a gross profit of $284,211 for the same period in 2006, representing an increase of $81,126 or 29 percent over the previous period. Gross margins of approximately 6 percent in the 3-month period ended March 31, 2007, compared to a gross margin of approximately 5.4 percent in the comparable period in the prior year. The gross margin was not as high as anticipated due to conversion and transfer costs of subscriber lines and channels between carriers caused by delays in bringing the newly acquired switch into service. We estimate that gross margins will steadily improve from the second quarter of 2007 with the scheduled conversion of existing and new customers to the new switch and the addition of value-added services contributing to estimated higher margins.
"For our fiscal 2007 first quarter ending March 31, 2007, our customers were primarily residential, business end-users and an increasing number of resellers (service providers) following the Company's decision to become a predominantly wholesale supplier of line rental and associated voice minutes. As a result, the existing residential and business end-user base was retained and growth is now obtained from resellers selling to residential, business end-users, and carriers," said Fredrik Verkroost, CEO of IT Group Holdings, Inc. "Approximately 70 percent of our end-user customers are small to medium sized businesses with the remainder percentage being residential consumers. During our fiscal 2007 first quarter, there was no single customer representing more that 5 percent of our revenues for that period," continued Dr. Verkroost.
About IT Group Holdings, Inc. IT Group Holdings, Inc. (formerly Green Mountain Capital, Inc.) trades through its wholly owned UK subsidiary Internet Telecommunications Plc (IT). IT is fast becoming a leading global provider of telecommunications services. In 2006, IT achieved $22.7m in revenues (up 14.7 percent over 2005) and $1.35m in gross profits (up 18 percent over 2005) through its successful and seasoned management team. IT Group Holdings is now established as a fast expanding wholesale carrier-operator supplying service providers and businesses with low cost telecommunications lines as well as competitive and high quality telephone call services including voice, data, value-added services such as SMS, and carrier services such as Voice-over-Internet Protocol (VoIP).
Forward-Looking Statements
This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on the Company's current expectations as to future events. However, the forward-looking events and circumstances discussed in this press release might not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.