EasyConnect delivers in a challenging market

(Oslo, 13 August 2009) Birdstep Technology ASA reported an EBITDA of NOK -7,2 million in the second quarter of 2009 (-11,3), while revenues grew to NOK 28,4 million (23,5). EasyConnect continued its positive development, with sequential and year-over-year growth, both in revenues and number of activations.

- The second quarter is normally a stronger period for Birdstep, compared to the first quarter, and the company has had a satisfactory revenue development despite more challenging market conditions. Our key business segment, EasyConnect delivered, both in revenues and number of activations, and proves its position as the preferred provider of USB modem software worldwide, says Torbjörn Sandberg, CEO of Birdstep Technology. Birdstep Technology’s second quarter 2009 revenues was NOK 28,4 million (23,5), with an EBITDA of NOK -7,2 million (-11,3) Cash flow from operations was NOK -9,1 million in the quarter, bringing cash and cash equivalents at the end of the quarter to NOK 59 million. The company regards the cash balance as solid as the profitability gradually is improving EasyConnect experienced a year-over-year revenue growth of 140 per cent, from NOK 4,3 million last year to NOK 10,3 million, in addition to a sequential growth from NOK 9,7 million in the first quarter this year. EasyConnect reported 457 760 new customers activating their USB modems with EasyConnect software in the second quarter, compared to 147 706 activations in the second quarter of 2008, driven by the underlying growth in the USB modem market. - Birdstep Technology expects EasyConnect to continue to grow, both in terms of revenues and activations in the second half of 2009. Though the underlying growth trends in mobile broadband are strong, the company expects the financial crisis to slow down the growth to some extent, as marketing budgets are cut and network investments delayed. However, the underlying growth is still weighing up for any impact from the challenging marked, says Sandberg. SafeMove reported revenues of NOK 6,3 million (8,7), while Orbyte had revenues of NOK 7,5 millioner (8,1). Raimas second quarter revenues grew to NOK 4,2 million (2,5). - Birdstep Technology expects Orbyte and Raima to remain steady as there are no indications for year-over-year growth in these areas during the last part of 2009. Especially SafeMove will be challenged with customers negatively influenced by the financial crisis, and thereby reducing spending in communication solutions, says Sandberg.