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TeraGo Reports 2017 Third Quarter Financial Results




TORONTO, ONTARIO — (Marketwired) — 11/07/17 — TeraGo Inc. (“TeraGo” or the “Company”) (TSX: TGO) (), today announced financial and operating results for the quarter ended September 30, 2017.

“We are focused on stabilizing the Connectivity business while executing on significant growth opportunities in Cloud and Colocation,” commented Tony Ciciretto, President and CEO of TeraGo. “Our investments to enhance our go-to-market effectiveness and simplify our services portfolio have begun to yield positive results in the third quarter, with a record quarter for sales bookings(1) in Cloud and Colocation. We will continue to manage our costs and focus on profitability as we execute our strategic plan.”

Mr. Ciciretto added, “I am pleased to welcome David Charron, our new CFO, to the senior leadership team this quarter. His leadership and experience will be help TeraGo drive operating leverage as we grow revenue and increase utilization of our data centres.”

Financial Highlights

Key Developments

RESULTS OF OPERATIONS

Comparison of the three and nine months ended September 30, 2017 and 2016

(in thousands of dollars, except with respect to gross profit margin and earnings per share)

Refer to “Definitions – IFRS, Additional GAAP and Non-GAAP Measures” in the MD&A for the three and nine months ended September 30, 2017 for a description of the components of relevant line items noted above.

(1)Non-IFRS Measures

This press release contains references to “sales bookings” and “Adjusted EBITDA” which are not a measure prescribed by International Financial Reporting Standards (IFRS). The Company believes that sales bookings, measured as the monthly recurring revenue of newly signed contracts during a period is useful additional information to management, the Board and investors as it provides an indication of revenue. 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, 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 and nine months ended September 30, 2017. Sales bookings and Adjusted EBITDA do not have any standardized meanings under IFRS/GAAP. TeraGo–s method of calculating sales bookings and Adjusted EBITDA may differ from other issuers and, accordingly, sales bookings and Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

The table below reconciles net loss to Adjusted EBITDA(1) for the three and nine months ended September 30, 2017 and 2016.

Conference Call

Management will host a conference call tomorrow, Wednesday, November 8, 2017, at 8:30 am ET to discuss these results.

To access the conference call, please dial 647-427-2311 or 1-866-521-4909. The unaudited financial statements for the three and nine months ended September 30, 2017 and Management–s Discussion & Analysis for the same periods have been filed on SEDAR at . Alternatively, these documents along with a presentation in connection with the conference call can be accessed online at .

An archived recording of the conference call will be available until November 15, 2017. To listen to the recording, call 416-621-4642 or 1-800-585-8367 and enter passcode 7086308.

About TeraGo

TeraGo provides businesses across Canada and internationally with cloud, colocation and connectivity services. TeraGo manages over 3,000 cloud workloads, operates five data centres in the Greater Toronto Area, the Greater Vancouver Area, and Kelowna, and owns and manages its own IP network. The Company serves approximately 4,000 business customers in 46 major markets across Canada including Toronto, Montreal, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and was recognized by IDC as a Major Player in MarketScape Cloud Vendor Assessment. TeraGo Networks was also selected as one of Canada–s Top Small and Medium Employers for 2017.

Forward-Looking Statements

This press release includes certain forward-looking statements that are made as of the date hereof. Such forward-looking statements may include, but are not limited to, statements relating to TeraGo–s growth strategy, executing the strategic plan, executing on significant growth opportunities in Cloud and Colocation, enhancing our go-to-market effectiveness and simplifying our services portfolio, growing revenue and increase utilization of our data centres. All such statements are made pursuant to the –safe harbour– provisions of, and are intended to be forward-looking statements under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. The forward-looking statements reflect the Company–s views with respect to future events and is subject to risks, uncertainties and assumptions, including the risk that TeraGo–s growth strategy, strategic plan, and investments will not generate the result or sustainable growth intended by management, current growth trends in the Company–s cloud and data centre business and in the industry may not continue as expected or significant growth opportunities may not be available, provisioning of the largest data centre services agreement in Company history may be delayed or may incur more costs than the Company had intended, TeraGo may not meet the growing and complex needs of its customers, and those risks set forth in the “Risk Factors” section in the annual MD&A of the Company for the year ended December 31, 2016 available on . Accordingly, readers should not place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed with the forward-looking statements. Except as may be required by applicable Canadian securities laws, TeraGo does not intend, and disclaims any obligation, to update or revise any forward-looking statements whether in words, oral or written as a result of new information, future events or otherwise.

Contacts:
TeraGo Investor Relations
Dennis Fong
LodeRock Advisors Inc.
1-416-282-9930





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