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TERAGO Reports Fourth Quarter and Full Year 2023 Financial ResultsTORONTO, March 6, 2024 /CNW/ - TERAGO Inc. ("TERAGO" or the "Company") (TSX: TGO), https://terago.ca/), today reported financial and operating results for the fourth quarter and fiscal year ended December 31, 2023. "I am proud to report my second quarter since becoming CEO on June 12th, 2023. Our "Value Creation Strategy" accelerated delivery on behalf of customers, employees, shareholders – continued apace in the final quarter of 2023. In our prior earnings release I highlighted improvements across all of our key financial indicators. Today I am pleased to share that in the second half of 2023, we have continued the trend of strengthening these metrics. Improvements in second half of 2023 as compared to the second half of 2022
In the second half of 2023, we delivered substantial financial wins that have afforded TERAGO the opportunity to reinvest in its transformation. This will drive a reenergizing of our top line. With new sales leadership in place and further growth investments anticipated, it is my intention to drive value as much from top line revenue growth as from cost optimization and careful management of our capital expenditures. TERAGO is extremely well positioned as a nimble, carrier-grade managed service provider of choice with differentiated frequencies, deep capabilities and a delivery track record in emerging growth areas. Smart, profitable growth will be a theme in 2024 and beyond," said Daniel Vucinic, CEO. Key Developments and Financial Highlights
Additional Management Commentary "The Value Creation Strategy has gained sufficient traction and is already yielding tangible benefits. I expect that TERAGO's efforts will be further buoyed by the addition of a permanent Chief Financial Officer, following the departure of the previous CFO due to personal family reasons after a brief tenure. A search is well underway for a permanent Chief Financial Officer, and I look forward to reacquainting the investor community with TERAGO and the Value Creation Strategy in the second half of 2024 following the integration of this key member of our team. "In addition, we noted with great interest the consultation launched by Innovation, Science and Economic Development Canada with respect to license renewals impacting our 38 GHz and 24GHz bands, as well as the preliminary consultation launched on changes to our 24 GHz band. Like any wireless business, spectrum is our lifeblood. Reasonable long-term visibility and our ability to put our spectrum to work in a way that fosters a growing, competitive and knowledge-based economy is absolutely critical for us to be able to invest in our diverse and innovative service offerings. We remain fully engaged in this important process.", said Daniel Vucinic. RESULTS OF OPERATIONS Comparison of the three months and year ended December 31, 2023 and 2022
Conference Call Management will host a conference call on Thursday, March 7, 2024, at 10:00 AM ET to discuss these results. To access the conference call, please dial 888-506-0062 or 973-528-0011 and use conference ID 572559 if applicable. Please call the conference telephone number 15 minutes prior to the start time so that you are in the queue for an operator to assist in registering and patching you through. An archived recording of the conference call will be available through Thursday, March 21, 2024. To listen to the recording, call 877-481-4010 or 919-882-2331 and enter passcode 50012# if applicable. (1) Non-IFRS Measures This press release contains references to "Cost of Services", "Gross Profit Margin", "Adjusted EBITDA", "Backlog MRR", "ARPU", and "churn" which are not measures prescribed by International Financial Reporting Standards (IFRS). Cost of Services consists of expenses related to delivering service to customers and servicing the operations of our networks. These expenses include costs for the lease of intercity facilities to connect our cities, internet transit and peering costs paid to other carriers, network real estate lease expense, spectrum lease expenses and lease and utility expenses for the data centres and salaries and related costs of staff directly associated with the cost of services. Gross Profit Margin % consists of gross profit margin divided by revenue where gross profit margin is revenue less cost of services. Adjusted EBITDA - The Company believes that Adjusted EBITDA is useful additional information to management, the Board and investors as it provides an indication of the operational results generated by its business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and amortization and it excludes items that could affect the comparability of our operational results and could potentially alter the trends analysis in business performance. Excluding these items does not necessarily imply they are non-recurring, infrequent or unusual. Adjusted EBITDA is also used by some investors and analysts for the purpose of valuing a company. The Company calculates Adjusted EBITDA as earnings before deducting interest, taxes, depreciation and amortization, foreign exchange gain or loss, finance costs, finance income, gain or loss on disposal of network assets, property and equipment, impairment of property, plant, & equipment and intangible assets, stock-based compensation and restructuring, acquisition-related and integration costs. Investors are cautioned that Adjusted EBITDA should not be construed as an alternative to operating earnings (losses), or net earnings (losses) determined in accordance with IFRS as an indicator of our financial performance or as a measure of our liquidity and cash flows. Adjusted EBITDA does not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. A reconciliation of net loss to Adjusted EBITDA is found below and in the MD&A for the three months and year ended December 31, 2023. Adjusted EBITDA does not have any standardized meaning under IFRS/GAAP. TERAGO's method of calculating Adjusted EBITDA may differ from other issuers and, accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. The table below reconciles net loss to Adjusted EBITDA for the three months and year ended December 31 2023 and 2022.
Backlog MRR - The term "Backlog MRR" is a measure of contracted monthly recurring revenue (MRR) from customers that have not yet been provisioned. The Company believes backlog MRR is useful additional information as it provides an indication of future revenue. Backlog MRR is not a recognized measure under IFRS and may not translate into future revenue, and accordingly, investors are cautioned in using it. The Company calculates backlog MRR by summing the MRR of new customer contracts and upgrades that are signed but not yet provisioned, as at the end of the period. TERAGO's method of calculating backlog MRR may differ from other issuers and, accordingly, backlog MRR may not be comparable to similar measures presented by other issuers. ARPU - The term "ARPU" refers to the Company's average revenue per customer per month in the period. The Company believes that ARPU is useful supplemental information as it provides an indication of our revenue from an individual customer on a per month basis. ARPU is not a recognized measure under IFRS and, accordingly, investors are cautioned that ARPU should not be construed as an alternative to revenue determined in accordance with IFRS as an indicator of our financial performance. The Company calculates ARPU by dividing our total revenue before revenue from early terminations by the number of customers in service during the period and we express ARPU as a rate per month. TERAGO's method of calculating ARPU has changed from the Company's past disclosures to exclude revenue from early termination fees, where ARPU was previously calculated as revenue divided by the number of customers in service during the period. TERAGO's method may differ from other issuers, and accordingly, ARPU may not be comparable to similar measures presented by other issuers. Churn - The term "churn" or "churn rate" is a measure, expressed as a percentage, of customer cancellations in a particular month. The Company calculates churn by dividing the number of customer cancellations during a month by the total number of customers at the end of the month before cancellations. The information is presented as the average monthly churn rate during the period. The Company believes that the churn rate is useful supplemental information as it provides an indication of future revenue decline and is a measure of how well the business is able to renew and keep existing customers on their existing service offerings. Churn and churn rate are not recognized measures under IFRS and, accordingly, investors are cautioned in using it. TERAGO's method of calculating churn and churn rate may differ from other issuers and, accordingly, churn may not be comparable to similar measures presented by other issuers. Cash from Operations – The term "Cash from Operations" refers to the "Cash from Operating Activities" as shown on the "Consolidated Statement of Cash Flows" in the Company's Consolidated Financial Statements. Overall Cash Consumption - The term "Overall Cash Consumption" refers to the "Net change in cash and cash equivalents during the period" as shown on the "Consolidated Statement of Cash Flows" in the Company's Consolidated Financial Statements. About TERAGO Forward-Looking Statements SOURCE TeraGo Inc. |