Annual Revenues Increase 97 Percent Over Fiscal 2005; Quarterly
Revenues Grow 431 Percent From Fourth Quarter of Fiscal 2005 LONDON
and NEW YORK, April 26 /PRNewswire-FirstCall/ -- Narrowstep(TM) Inc
(OTC:NRWS) (BULLETIN BOARD: NRWS) , the TV on the Internet Company,
today announced record results for its fiscal fourth quarter and
year ended February 28, 2006. Annual revenue increased 97 percent
year-over-year, to a record $2.71 million, compared to $1.38
million in fiscal 2005, while fourth quarter revenue increased 431
percent, to $820,000, from $190,000 for the fourth quarter of
fiscal 2005. Annual revenue included $1.5 million from
narrowcasting and related activities, compared with $520,000 for
fiscal 2005, an increase of 288 percent. Revenue for fiscal 2006
also included a one-time payment of approximately $160,000. The
Company's gross profit was $1.65 million for fiscal 2006, an
increase of 184 percent, from $581,000 for fiscal 2005. Steve
Beaumont, Narrowstep CEO, said, "With our recent cash infusion and
improving financial results, we believe Narrowstep is capable of
achieving the recognition and critical mass that will lead to the
widespread adoption of what we expect will emerge as the standard
in television transmission using Internet protocol -- our
Television Operating System(TM) (telvOS(TM)). "Content providers of
every sort are pushing hard to find and deploy the most dynamic and
scalable software to deliver programming via niche channels to
highly targeted audiences. We believe that our proprietary
technology is the only viable and field-tested end-to-end solution
for distributing 'real' and searchable TV programming on the
Internet, rather than what most perceive to be television over IP
-- streaming on-demand video. Further, telvOS can deliver these
channels not only to desktops, but to any portable Windows
Media-enabled device, such as mobile phones or PDAs." For the
fourth quarter of fiscal 2006, the Company reported a net loss of
$920,000, or $0.03 per share, compared to a loss of $1.9 million,
or $0.07 per share, for the fourth quarter of fiscal 2005. For all
of fiscal 2006, the Company reported a net loss of $4.29 million,
or $0.13 per share, versus a net loss of $4.61 million, or $0.16
per share, for fiscal 2005. Beaumont continued, "We are already
working with a variety of TV-related media and producers throughout
Europe, and so our next horizon is the United States: the biggest
media market in the world. We now host more than 80 content
channels and believe we will host many times that number soon,
which we expect to help us deliver impressive results in the US
this year that will match our fast growth in the UK and Europe.
Narrowstep enables cable companies, traditional broadcasters, ISPs,
publishers, and other content providers, and even major
industrials, to deliver programming through Internet channels using
TV over IP. The Company counts among its customers a variety of
organizations, such as Land Rover, ITV, Telewest, the cities of
London and Glasgow, Sail TV, the International Paralympic
Committee, Cyprus ITV Ltd, MotorSport Television and BlueYonder TV.
Beaumont also said, "We believe the overall mobile device market
will only continue to rise, as will the popularity of video-playout
on those devices. As the market continues to move forward, so too
will Narrowstep, taking advantage of as many opportunities as
possible to tell our story across industries." Representatives from
Narrowstep were at the recent National Cable &
Telecommunications Association trade show in Atlanta, as well as
the New York Auto Show, where Land Rover launched its telvOS-based
Internet television channel, the first to be launched by an
automobile manufacturer. The Company is currently at the National
Association of Broadcasters trade show in Las Vegas. About
Narrowstep(TM) Inc Narrowstep(TM) Inc (OTC:NRWS) (BULLETIN BOARD:
NRWS) is a leading provider of Internet-based video content
delivery (TV on IP). Narrowstep's product and service offerings
enable customers to distribute channels of video-based content and
provide related services over the Internet. The Narrowstep system,
TelVOS(TM), enables comprehensive delivery of video content and
television-like programming to mobile, wireless, Internet,
broadband and broadcast services to clients throughout the world.
The Narrowstep system enables owners and users of video content to
reach audiences by "narrowcasting" -- targeting delivery of
specific content to interested groups. To learn more, visit
http://www.narrowstep.com/. 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. For further
information please contact: Steve Crowther, CFO Narrowstep(TM) Inc
Tel: + 1 609 951 2221 Email: or Jesse Deal (investors) Allen &
Caron Tel: + 1 212 691 8087 Email: NARROWSTEP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited) February 28, 2006 $ ASSETS
Current assets: Cash and cash equivalents 2,232,854 Short-term
investments 2,500,000 Accounts receivable, net of allowance for
doubtful accounts of $201,715 418,394 Prepaid expenses and other
current assets 135,542 Total current assets 5,286,790 Property and
equipment, net of accumulated depreciation 289,148 Software
development costs, net of accumulated amortization 146,166 Goodwill
1,157,581 Intangible assets, net of accumulated amortization
113,173 Total assets 6,992,858 LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES Current liabilities: Accounts payable 504,919 Net
obligations under capital leases, current 58,113 Accrued expenses
and other liabilities 600,732 Total current liabilities 1,163,764
Net obligations under capital leases - long-term 43,997 Total
liabilities 1,207,761 COMMITMENTS STOCKHOLDERS' EQUITY: Common
stock, $0.000001 par value, 450,000,000 shares authorized,
45,136,474 issued and outstanding 45 Additional paid-in capital
16,443,374 Deferred stock compensation 3,267,997 Stock subscription
receivable (1,410,000) Accumulated deficit (12,494,059) Accumulated
other comprehensive loss (22,260) Total stockholders' equity
5,785,097 Total liabilities and stockholders' equity 6,992,858
NARROWSTEP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS Year ended Year ended February 28, 2006 February 28,
2005 $ $ Revenue: Narrowcasting and other (including related party
transactions of $0 for the year ended February 28, 2006, and
$262,373 for the year ended February 28, 2005) 1,499,633 517,061
Production services 1,206,629 858,552 Total revenue 2,706,262
1,375,613 Cost of revenue: Direct costs 925,911 697,925 Software
amortization 129,850 96,758 Total costs of revenue 1,055,761
794,683 Gross profit 1,650,501 580,930 Operating expenses: Selling,
general and administrative (including non-cash stock compensation
expense of $1,344,915 for the year ended February 28, 2006 and
$786,616 for the year ended February 28, 2005) 5,936,659 5,177,277
Total operating expenses 5,936,659 5,177,277 Loss from operations
(4,286,158) (4,596,347) Other income 2,530 1,798 Currency exchange
losses (6,149) (10,507) Net loss (4,289,777) (4,605,056) Net loss
per common share - basic and diluted $(0.13) $(0.16)
Weighted-average number of outstanding, basic and diluted shares
32,190,594 28,124,781 DATASOURCE: Narrowstep Inc CONTACT: Steve
Crowther, CFO of Narrowstep Inc, +1-609-951-2221, ; or Investors,
Jesse Deal of Allen & Caron, +1-212-691-8087, , for Narrowstep
Inc Web site: http://www.narrowstep.com/
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