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Omnicity Announces Record Revenue and Significant
Subscriber Increase for Q4 09
RUSHVILLE, Ind., Oct. 27,
2009 (GLOBE NEWSWIRE) -- Omnicity Corp. (OTC BB: OMCY -
News), the Midwest's largest fixed Wireless Internet
Service Provider (WISP), today announced its financial
results for the fourth quarter 2009.
2009 Fourth Quarter
Results:
Omnicity's revenues for the year ended July 31, 2009
increased by $655,000 to $1,689M (2008 -- $1,034M), an
increase of 63%. More importantly, revenue for Q4 2009
increased by $288,000 to $611,000 (Q3 2008 -- $322,000),
an increase of 89%. Additionally, Q4 2009 revenues
increased by $186,000 to $611,000 (Q3 2009 -- $425,000),
an increase of 44%. This is after a 46% increase Q3 2009
compared to Q2 2009. These significant increases reflect
an increase in recurring service revenue from our four
asset acquisitions; ND Wave, ForePoint Networks, North
Central Communications and Cue Connex. The number of
subscribers increased from 1,800 to 5,200 by virtue of
these acquisitions. The Company mainly receives revenue
from monthly service and modem rental fees collected
from its subscribers. The Company also receives web
hosting fees, installation fees, fiber construction
projects fees and late fees.
Greg Jarman, CEO of Omnicity,
stated, "We are very pleased with our financial results
and growth during the fourth quarter. Our goal is to
maintain double digit growth each and every quarter
during fiscal 2010. This certainly paves the way for our
growth strategy and we expect to be operationally cash
flow positive by the end of January 31, 2010 (Q2 2010).
We have 7 acquisitions in various stages of closure
including the recently announced Midwest WISP Letter of
Intent. We expect to close on each of these acquisitions
by the end of Q2 2010. The financial impact of these
acquisitions should be that Omnicity will be cash flow
positive, which is a major milestone and well ahead of
our original projections when we went public 8 months
ago. We expect these acquisitions, along with stepped up
organic growth, will positively impact our Company's
valuation in the public market. Notably, we are also in
contention to win a $16.2M bid to build fiber optic
services for rural hospitals across the State of
Indiana, being an applicant for $31M in such projects
overall."
"Our vision is to be the first broadband service
provider to expand its network across rural America"
Omnicity Corp. is a public company based in Indiana
providing broadband access, including advanced services
of voice, video and data, in un-served and underserved
small and rural markets and is planning to be the
premier consolidator of rural market broadband
nationwide. Omnicity's strategy is to provide a total
broadband solution and continue rapid growth through
acquisitions, organic growth and continue to partner
with Rural Electric Membership Co-ops and Rural
Telephone Companies. Omnicity has an experienced
broadband operations team with extensive wireless
broadband/ISP expertise as well as the expertise to
consolidate large numbers of businesses through its
roll-up strategy.
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OMCY
expects to, accelerate positive cash flow and earnings
and achieve growth in annualized revenues to
approximately $9M by March 31, 2010. Over the next five
years, the Company anticipates growing its customer base
to 170,000 subscribers, improving operating margins and
increasing EBITDA to a $57M range.
These projections are based
upon basic Broadband connections only and do not include
the planned additions of voice-over-Internet Protocol
(VOIP) and Internet Protocol High-Def TV (IPTV). With
the addition of these two services, the Company will be
delivering a triple play much like its competitors are
delivering in cities through hard-wire systems.
Consolidator of rural broadband market
OMCY provides fixed and wireless broadband Internet
access to unserved and underserved rural communities in
the Midwest. The Companys vision is to be the first
Broadband service provider to expand its network across
rural America and to emerge as a lead consolidator of
rural market Broadband. To achieve this vision, OMCY is
acquiring and/or building operations in small to
mid-size markets characterized by large numbers of
households not effectively served by traditional
hard-wire broadband service.
Huge market opportunity
OMCYs target markets have terrain and other conditions
better suited to wireless transmissions and not
attractive to traditional hard-wire operators. The
Company estimates that at least 40M rural and small
market homes, businesses, government agencies and
schools have inadequate high-speed Internet service and
represent a large growth opportunity. Approximately 85%
of the line-of-sight households within the Companys
target markets have limited access to high-speed
Internet service.
Development of a nationwide wireless network to deliver
low-cost broadband
OMCY plans to develop a nationwide wireless network and
deliver high-speed Internet access to rural subscribers
more cost- effectively than traditional cable or fiber
optic models. Traditional hard-wire systems are
generally much more expensive to build than wireless
networks. Reduced network development costs means lower
infrastructure costs per subscriber for wireless
operators as compared to comparably-sized traditional
hardwire fiber-optic systems. Operating costs for
wireless systems are also generally lower than
comparable costs for hardwire systems. This is because
of reduced network maintenance costs, capital costs and
related depreciation. In addition, OMCY improves
operating efficiencies by using centralized billing and
management systems for its acquired businesses.
Competitive advantages over traditional hard-wire
services
OMCY believes it can deliver service to customers within
three days of the initial service request. This is much
faster than competitors, who require as much as two
weeks for provisioning and installation. In addition,
the Companys technicians are installing the service
directly in the customers home. Cable and DSL services
require the customer to self-install routers and other
equipment sent through the mail. OMCYs services are
also priced competitively with satellite services. In
addition, compared to its primary competitors, OMCY
provides, at no additional charge, SPAM and virus
scanning of email, personal web hosting space and free
technical service.
Aggressive acquisition strategy
The Companys business model has already proven
successful in rural areas of Indiana. Going forward,
OMCY plans to extend its geographic reach through
strategic partnerships with Rural Electric Municipal
Cooperatives (REMCs), rural telephone companies and
local government agencies. Since October 2008, OMCY has
entered into asset purchase agreements with four
wireless operators: NDWave, Inc; Forepoint Networks Inc;
Mooreland Wireless and North Central Communications,
Inc. As a result of these acquisitions, the Company has
now more than 5,500 subscribers and 200 tower locations
covering half of the State of Indiana. In addition,
through a recently announced partnership with Craigville
Telco, the Company increases its network coverage in
north eastern Indiana. OMCY plans to expand into 100
additional rural markets over the next 18 months.
External financing accelerates acquisition program
OMCY and Agility Ventures, LLC recently closed an
agreement that adds $1.0M to the existing Master Lease
facility, providing OMCY with funding to accelerate its
acquisition program. Agility Ventures specializes in
financing and consulting to companies in the wireless
broadband market and is an excellent partner for OMCY
because of its expertise, experience and established
industry relationships.
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