DSL.net Doubles Sequential Revenue in First Quarter; Third Consecutive Quarter of 100+ Percent Revenue Growth; Company Expands Nationwide DSL Deployment to 186 Cities.Business & Technology 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)--May 5, 2000 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 direct provider of high-speed data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. and Internet solutions, today reported first quarter financial results for the period ending March 31, 2000. DSL.net uses digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL) technology to provide high-speed Internet See broadband. services directly to small and medium-sized businesses, primarily located in second- and third-tier cities across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Total revenue for the first quarter of 2000 was $1,737,000, representing a sequential increase of 114 percent when compared with the quarter ending Dec. 31, 1999. This is the third consecutive quarter in which DSL.net has reported 100-plus percent sequential revenue growth since its initial public offering in October 1999. Recurring service fees accounted for over three-quarters of DSL.net's total revenue. Earnings before interest, taxes, depreciation, amortization, and non-cash stock compensation (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) were negative $15,876,000 for the first quarter. EBITDA for the fourth quarter of 1999 was negative $9,115,000. The company posted a net loss of $18,338,000 for the quarter, or $0.33 per share, compared to a net loss of $9,870,000, or $0.21 per share, in the fourth quarter of 1999. "We are pleased to again announce results that validate our position as a leading provider of business-class broadband services," said David Struwas, president and chief executive officer of DSL.net. "The company exceeded its targets in the key metrics of revenue growth, customers acquired and cities in operation. These results confirm our commitment to providing comprehensive solutions that enable our customers to easily leverage the power of the Internet to help grow their businesses." The following highlights occurred during the first quarter: -- An offering of 5,750,000 shares of common stock was completed in March 2000, raising approximately $150 million to further accelerate DSL.net's national build-out. -- National DSL deployment grew from 116 cities in the fourth quarter of 1999 to 186 cities in the first quarter of 2000. DSL.net now has a presence in the service areas of each of the regional Bell operating companies (RBOCs). -- DSL.net achieved competitive local exchange carrier (CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ) status across the continental United States United States territory, including the adjacent territorial waters, located within North America between Canada and Mexico. Also called CONUS. . -- An agreement was signed with Automatic Data Processing Same as data processing. Inc. (NYSE NYSE See: New York Stock Exchange : AUD AUD In currencies, this is the abbreviation for the Australian Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) to provide broadband Internet See broadband. services to ADP's small business customers. DSL.net also agreed to offer ADP's e-business payroll and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. applications to its customer base. -- American Express (NYSE: AXP The brand name Digital gave to its first family of Alpha-based computers. In 1998, Digital was acquired by Compaq. See Alpha. ) Travel Related Services selected DSL.net to be the preferred broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a provider to the American Express U.S. Representative Travel Network. -- DSL.net and Staples (NASDAQ: SPLS) expanded their relationship beyond Staples' retail stores to include Staples.com and Staples Direct, its direct sales force focused on larger businesses. -- DSL.net announced sponsorship of a multi-city seminar series in conjunction with Extended Systems, Inc. (NASDAQ: XTND XTND Extend XTND XML Transition Network Definition ) and leading value-added resellers (VARs) to offer end-to-end Internet solutions to small and medium-sized businesses. -- An agreement was signed with iBEAM Broadcasting to deliver streaming content. "Our alliances with ADP (1) (Automatic Data Processing) Synonymous with data processing (DP), electronic data processing (EDP) and information processing. (2) (Automatic Data Processing, Inc., Roseland, NJ, www.adp. and American Express underscore DSL.net's strategy to use high-speed bandwidth as the vehicle to deliver value-added, Internet-based solutions to businesses across the country," said Struwas. "DSL.net's growing national footprint positions the company to be the primary point of contact for multi-location businesses. These alliances emphasize DSL.net's attractiveness as the vendor of choice for application and service providers seeking a partner with a dedicated broadband network, a direct relationship with the business customer, and a national presence." About DSL.net Based in New Haven, Conn., DSL.net, Inc. is a high-speed data communications and Internet access provider See ISP. (networking, company) Internet Access Provider - (IAP) A company or other origanisation which provides access to the Internet to businesses and/or consumers. that uses digital subscriber line technology to provide high-speed Internet access solutions to small and medium-sized businesses, primarily in second- and third-tier cities throughout the United States. As of March 31, 2000, DSL.net had provided service in 186 cities. For more information regarding DSL.net solutions and services visit www.dsl.net, e-mail info@dsl.net, or call 1-877-DSL-NET1 (1-877-375-6381). FORWARD LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These 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. In particular, the risks and uncertainties include those described under "Risk Factors" in DSL.net's Annual Report on 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 Dec. 31, 1999 filed with the Securities and Exchange Commission, which include, among other things, (i) DSL.net's extremely limited operating history, which makes it difficult to evaluate its business and prospects; (ii) the difficulty of predicting the new and rapidly evolving high-speed data communications industry; (iii) DSL.net's unproven business model, which may not be successful; (iv) DSL.net's ability to negotiate, enter into and renew interconnection and collocation agreements with traditional telephone companies; (v) regulatory, legislative, and judicial developments, which could adversely affect the way DSL.net operates its business; and (vi) DSL.net's ability to recruit and retain qualified personnel, establish the necessary infrastructure to support its business, and manage the growth of its operations. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. DSL.net undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. DSL.net's authority to provide certain regulated services is held by its subsidiary companies. DSL.net is a trademark of DSL.net, Inc. Other product and company names herein may be trademarks of their respective owners.
DSL.net, Inc.
Statements of Operations
(unaudited)
Three Months Ended
------------------
March 31, December 31, March 31,
1999 1999 2000
---- ---- ----
Revenue $48,188 $810,881 $1,737,306
Operating expenses:
Network and operations 264,457 5,477,045 11,367,972
Sales and marketing 129,375 3,519,724 4,988,235
General and administrative 525,184 2,033,433 3,703,940
Stock compensation 822,260 710,540 1,528,436
Total operating expenses 1,741,276 11,740,742 21,588,583
Operating loss (1,693,088) 10,929,861) (19,851,277)
Interest expense (income), net (6,474) (1,061,356) (1,521,225)
Other expense (income), net - 1,077 8,231
Net loss $(1,686,614) $(9,869,582) $(18,338,283)
Net loss per common share
- basic and diluted $(0.51) $(0.21) $(0.33)
Shares used in computing
net loss per share 3,282,640 47,169,156 55,694,451
Other data:
EBITDA (a) $(822,663) $(9,115,282) $(15,875,818)
(a) EBITDA is defined as earnings (losses) before interest, taxes,
depreciation, amortization and non cash stock compensation.
Selected Balance Sheet Data
($ in 000's)
December 31, March 31,
1999 2000
(unaudited)
Cash, cash equivalents and
marketable securities $79,452 $185,650
Net property and equipment 32,665 53,599
Total assets 117,632 245,887
Current liabilities 14,841 17,654
Long-term obligations 2,058 2,620
Stockholders' equity 100,733 225,614
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