About UsNarrowstep™ to Focus on Enterprise Customers Requiring Sophisticated Tools and Functionality for Delivering High-Quality Video over the Internet
Narrowstep™ Reports 2nd Quarter Results for Fiscal Year 2008
NEW YORK / LONDON, OCTOBER 16, 2007 - Narrowstep™ Inc. (OTC Bulletin Board: NRWS), the TV on the Internet company, announced today that it has upgraded its telvOS™ platform and its CDN network which the Company believes will enable it to offer enterprise customers the most sophisticated tools and functionality on the market. The Company also announced its results for the second quarter of fiscal year 2008, ended August 31, 2007 which included significant investments in the company's video-centric content distribution network and the Company's telvOS operating system.
Operating Highlights:
- Completes $10.5 million equity financing
- Expands video-based content distribution network for high-quality streaming
- Narrowcasting revenue increases 10% over same year period
- Signs strategic partnership with KPN to offer TV on the Internet solutions
- Adds customers through sales partnerships in Spain and Germany
Revenue for the quarter was $1.3 million with a loss of $4.9 million or $0.07 loss per share, compared to revenue for the second quarter of 2006 of $1.6 million with a loss of $1.3 million or $0.03 loss per share. The loss for the quarter included non-cash items of $1.5 million in stock expense and $0.2 million in depreciation compared with $0.4 million in stock expense and $0.1 million in depreciation for the comparable quarter of the previous year.
Narrowcasting revenue increased $0.1 million or 10% compared to the second quarter of 2006, while production services revenue decreased $0.4 million compared to revenue for the comparable quarter of the previous year. The Company has previously stated that it intends to exit the production services business after fulfilling its current obligations.
The increased net loss in the second quarter of 2007 was primarily the result of higher operating expenses, primarily relating to the build-out of the Company's video-based content delivery network, increased headcount to support the Company's growing customer base, increased research and development expenses relating primarily to enhancements to the Company's TelvOS operating system and increased customization expenses.
The Company is currently shifting the focus of its sales and marketing efforts on larger enterprise customers requiring sophisticated tools and functionality and will continue to move away from smaller content providers who have traditionally had lower margins and less financial resources. Management expects that this focus on larger enterprise customers will accelerate the Company's average revenue per customer and overall revenue growth.
"This quarter we continued to invest in our content distribution network and our technology platform and I am very pleased with the progress we have made," said David C. McCourt, the Company's Chairman and Interim Chief Executive Officer. "The investments we have made took slightly longer to complete than originally expected, however, we are now in a position to provide larger enterprise customers with a sophisticated solution for monetizing their video over the Internet in a secure, controlled, high quality, and cost-effective fashion. With these significant platform investments now behind us, I anticipate a reduction in our development costs going forward."
For additional information please contact, Jesse Case at jcase@narrowstep.com or visit http://www.narrowstep.com.
About Narrowstep:
Narrowstep™ Inc. (OTC Bulletin Board: NRWS), the TV on the Internet company, is a leading provider of Internet TV services to 100+ companies worldwide. Narrowstep's propriety technology, the Television Operating System™ or telvOS™ delivers the most television-like and true community building Internet TV experience available. A pioneer in the IPTV spectrum, Narrowstep offers the expertise to build channels, as well as state-of-the-art technology that can send video to multiple platforms. For more information about telvOS™, please visit http://www.narrowstep.com/technology/internet-tv-software-platform.aspx and for more information about Narrowstep, please visit http://www.narrowstep.com or call +44 (0) 20 7498 3377.
Forward-Looking Statement:
Certain statements in this news release constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company's filings with the Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.