DSL.net Corrects Non-Cash, Non-Operating Amortization Item.Business Editors NEW HAVEN New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many , Conn.--(BUSINESS WIRE)--April 14, 2004 DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary .net, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DSLN), a leading nationwide provider of broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications services to businesses, today said that a non-cash, non-operating amortization item previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in its 2003 financial results was reported in error. The item involved did not impact previously reported revenue, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , net loss, cash or any cash-flow item. The item involved was the amortization of the beneficial conversion feature associated with the Company's convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". (presented as "accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. " on the Company's consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of operations). During the last two quarters of 2003, certain shares of the Company's preferred stock were converted into shares of common stock. As originally reported, the calculation of accretion of preferred stock did not reflect the required acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. of the amortization of the beneficial conversion feature as a result of these conversions. The correction CORRECTION,punishment. Chastisement by one having authority of a person who has committed some offence, for the purpose of bringing him to legal subjection. 2. It is chiefly exercised in a parental manner, by parents, or those who are placed in loco parentis. will impact the accretion of preferred stock, the net loss applicable to common stockholders and net loss per common share. All corrected amounts are included in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2003. The Company has filed an amendment to its Form 10-Q Form 10-Q See 10-Q. for the period ended September September: see month. 30, 2003, to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements to correct this non-cash, non-operating amortization item. The tables that follow this press release set out the previously disclosed and corrected line items of the Company's consolidated statements of operations for the respective periods. About DSL.net DSL.net, Inc. is a leading nationwide provider of broadband communications services to businesses. The Company combines its own facilities, nationwide network infrastructure and Internet Service Provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) capabilities to provide high-speed Internet See broadband. access, private network solutions and value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. directly to small- and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized businesses or larger enterprises looking to connect multiple locations. DSL.net product offerings include T-1, DS-3 and business-class DSL services, virtual private networks (VPNs), frame relay A high-speed packet switching protocol used in wide area networks (WANs). Providing a granular service of up to DS3 speed (45 Mbps), it has become popular for LAN to LAN connections across remote distances, and services are offered by most major carriers. , Web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. , DNS (Domain Name System) A system for converting host names and domain names into IP addresses on the Internet or on local networks that use the TCP/IP protocol. For example, when a Web site address is given to the DNS either by typing a URL in a browser or behind the management, enhanced e-mail, online data backup and recovery services, firewalls and nationwide dial-up services An information service on demand. The term was popular when analog modems were the only way to connect to a remote system. See dial-up. , as well as integrated voice and data offerings in select markets. For more information, visit www.dsl.net, e-mail info@dsl.net, or call 1-877-DSL-NET1 (1-877-375-6381). This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended, and, to the extent it does, these forward-looking statements are subject to a variety of risks and uncertainties, many of which are beyond DSL.net's control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Risks and uncertainties associated with DSL.net's business include, among other things, (i) DSL.net's failure to generate sufficient revenue, contain certain discretionary spending, achieve certain other business plan objectives, or obtain additional debt or equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , which could have a material adverse effect on DSL.net's results of operations or financial position, or cause it to restructure its operations to further reduce operating costs operating costs npl → gastos mpl operacionales ; (ii) risks associated with the possible removal of DSL.net's common stock from the Nasdaq SmallCap Market, which removal could adversely impact the pricing and trading of DSL.net's common stock; and (iii) regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. , legislative and judicial developments, which could adversely affect the way DSL.net operates its business. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . DSL.net undertakes no obligation, and disclaims any obligation, to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or otherwise. For additional information regarding these and other risks faced by DSL.net, see the disclosure contained under "Risk Factors'' in DSL.net's Annual Report on Form 10-K for the year ended December 31, 2003, which has been filed with the Securities and Exchange Commission. DSL.net is a trademark of DSL.net, Inc.
The following table presents the impact of the correction of the
accretion of preferred stock and related items reflected on the
Company's consolidated statements of operations for the three and
twelve months ended December 31, 2003:
(dollars in thousands, except per share amounts)
Three Months Ended
December 31, 2003
As As
Reported Adjustments Corrected
--------- ------------ ----------
Revenue, net $18,244 $ - $18,244
--------- ------------ ----------
Operating expenses:
Network (excluding $0 and
$10 of stock compensation,
respectively) 13,039 - 13,039
Operations (excluding $0
and $11 of stock
compensation, respectively) 2,938 - 2,938
General and administrative
(excluding $0 and $69 of
stock compensation,
respectively) 3,310 - 3,310
Sales and marketing
(excluding $0 and $348 of
stock compensation,
respectively) 2,403 - 2,403
Stock compensation - - -
Depreciation and amortization 3,706 - 3,706
--------- ------------- ---------
Total operating expenses 25,396 - 25,396
--------- ------------ ----------
Operating loss (7,152) - (7,152)
Interest income (expense), net (797) - (797)
Other income (expense), net 6 - 6
--------- ------------ ----------
Net loss $(7,943) $ - $(7,943)
========= ============ ==========
Net loss applicable to
common stockholders:
Net loss $(7,943) $ - $(7,943)
Dividends on preferred
stock (553) - (553)
Accretion of preferred
stock (1,033) (1,955) (2,988)
--------- ------------ ----------
Net loss applicable to
common stockholders $(9,529) $(1,955) $(11,484)
========= ============ ==========
Net loss per share, basic
and diluted $(0.10) $(0.02) $(0.12)
========= ============ ==========
Shares used in computing
net loss per share, basic
and diluted 96,080,175 - 96,080,175
========== ============ ==========
Twelve Months Ended
December 31, 2003
As As
Reported Adjustments Corrected
----------- ------------ ----------
Revenue, net $71,333 $- $71,333
----------- ------------ ----------
Operating expenses:
Network (excluding $0 and
$10 of stock compensation,
respectively) 51,452 - 51,452
Operations (excluding $0
and $11 of stock compensation,
respectively) 11,873 - 11,873
General and administrative
(excluding $0 and $69 of
stock compensation,
respectively) 12,200 - 12,200
Sales and marketing
(excluding $0 and $348 of
stock compensation,
respectively) 8,642 - 8,642
Stock compensation 438 - 438
Depreciation and amortization 16,359 - 16,359
----------- ------------ ----------
Total operating expenses 100,964 - 100,964
----------- ------------ ----------
Operating loss (29,631) - (29,631)
Interest income (expense), net (2,936) - (2,936)
Other income (expense), net (2,430) - (2,430)
----------- ------------ ----------
Net loss $(34,997) $ - $(34,997)
=========== ============ ==========
Net loss applicable to
common stockholders:
Net loss $(34,997) $- $(34,997)
Dividends on preferred
stock (3,698) - (3,698)
Accretion of preferred
stock (8,833) (5,494) (14,327)
----------- ------------ ----------
Net loss applicable to
common stockholders $(47,528) $(5,494) $(53,022)
=========== ============ ==========
Net loss per share, basic
and diluted $(0.64) $(0.08) $(0.72)
=========== ============ ==========
Shares used in computing
net loss per share, basic
and diluted 74,125,513 - 74,125,513
=========== ============ ==========
The following table presents the impact of the correction of the
accretion of preferred stock and related items reflected on the
Company's consolidated statements of operations for the three
and nine months ended September 30, 2003:
(dollars in thousands, except per share amounts)
Three Months Ended
September 30, 2003
------------------------------------
As As
Reported Adjustments Corrected
------------ ------------ ----------
Revenue, net $18,227 $ - $18,227
------------ ------------ ----------
Operating expenses:
Network (excluding $0 and
$10 of stock compensation,
respectively) 13,070 - 13,070
Operations (excluding $0
and $11 of stock
compensation, respectively) 3,060 - 3,060
General and administrative
(excluding $0 and $69 of
stock compensation,
respectively) 2,618 - 2,618
Sales and marketing
(excluding $0 and $348 of
stock compensation,
respectively) 2,116 - 2,116
Stock compensation - - -
Depreciation and amortization 3,319 - 3,319
------------ ------------ ----------
Total operating expenses 24,183 - 24,183
------------ ------------ ----------
Operating loss (5,956) - (5,956)
Interest income (expense), net (728) - (728)
Other income (expense), net (2,427) - (2,427)
------------ ------------ ----------
Net loss $(9,111) $ - $(9,111)
============ ============ ==========
Net loss applicable to
common stockholders:
Net loss $(9,111) $ - $(9,111)
Dividends on preferred
stock (1,045) - (1,045)
Accretion of preferred
stock (1,779) (3,539) (5,318)
Net loss applicable to
common stockholders $(11,935) $(3,539) $(15,474)
============ ============ ==========
Net loss per share, basic
and diluted $(0.17) $(0.05) $(0.22)
============ ============ ==========
Shares used in computing
net loss per share, basic
and diluted 70,161,057 - 70,161,057
============ ============ ==========
Nine Months Ended
September 30, 2003
-----------------------------------
As As
Reported Adjustments Corrected
----------- ------------ ----------
Revenue, net $53,089 $ - $53,089
----------- ------------ ----------
Operating expenses:
Network (excluding $0 and
$10 of stock compensation,
respectively) 38,412 - 38,412
Operations (excluding $0
and $11 of stock compensation,
respectively) 8,935 - 8,935
General and administrative
(excluding $0 and $69 of
stock compensation,
respectively) 8,891 - 8,891
Sales and marketing
(excluding $0 and $348 of
stock compensation,
respectively) 6,238 - 6,238
Stock compensation 438 - 438
Depreciation and amortization 12,654 - 12,654
----------- ------------ ----------
Total operating expenses 75,568 - 75,568
----------- ------------ ----------
Operating loss (22,479) - (22,479)
Interest income (expense), net (2,139) - (2,139)
Other income (expense), net (2,436) - (2,436)
----------- ------------ ----------
Net loss $(27,054) $ - $(27,054)
=========== ============ ==========
Net loss applicable to
common stockholders:
Net loss $(27,054) $ - $(27,054)
Dividends on preferred
stock (3,145) - (3,145)
Accretion of preferred
stock (7,800) (3,539) (11,339)
Net loss applicable to
common stockholders $(37,999) $(3,539) $(41,538)
=========== ============ ==========
Net loss per share, basic
and diluted $(0.57) $(0.05) $(0.62)
=========== ============ ==========
Shares used in computing
net loss per share, basic
and diluted 66,726,872 - 66,726,872
=========== ============ ==========
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