DSL.net Reports First-Quarter 2005 Results: First Quarter Adjusted EBITDA Improves 117%; Free Cash Flow Improves 113% from Year Earlier.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. -- 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. (AMEX AMEX See: American Stock Exchange :BIZ), 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 reported first-quarter 2005 financial results. Revenue for the first quarter of 2005 was $15.4 million, compared to revenue for the first quarter of 2004 of $17.8 million. The Company generated gross margin (defined as revenue less network expense) of $5.4 million for the first quarter of 2005, compared to gross margin of $5.6 million for the first quarter of 2004. Earnings before interest, taxes, depreciation, amortization, other income (expense) and non-cash stock compensation ("Adjusted 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 ") for the first quarter of 2005 was positive $0.5 million, a 117% improvement compared to negative $2.8 million in the first quarter of 2004. Free cash flow (defined as Adjusted EBITDA minus capital expenditures) for the first quarter of 2005 was positive $0.4 million, a 113% improvement over first quarter of 2004 free cash flow of negative $3.0 million. "This is the second consecutive quarter that DSL.net has reported positive Adjusted EBITDA and free cash flow, and I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in very pleased with these latest results as we begin the new year," said Kirby Kirby is a common place name, surname, and given name. Other common uses include:
G. "Buddy" Pickle pickle, general term for fruits or vegetables preserved in vinegar or brine, usually with spices or sugar or both. Vegetables commonly pickled include the beet, cabbage, cauliflower, cucumber, olive, onion, pepper, and tomato. , chief executive officer of DSL.net. "To the extent we are successful in our ongoing efforts to secure additional financing, we believe we will become a leading provider of break-through voice and data (VoIP) solutions for small and medium businesses." Net loss for the first quarter of 2005 was $3.5 million, representing a 50% improvement over net loss of $7.1 million for the first quarter of 2004. On a per share basis, the Company reported a net loss applicable to common stockholders of $0.01 per share for the first quarter of 2005, a 81% improvement compared to a net loss of $0.08 per share for the same period a year earlier. At the end of the first quarter of 2005, the Company had $8.0 million in cash and total assets of $36.5 million. "We are pleased that we were able to sustain positive Adjusted EBITDA and free cash flow for the first quarter despite the decline in revenue and gross margin," said Robert J. DeSantis, chief financial officer of DSL.net. "We believe that our significantly improved financial performance over the past year has better positioned the Company to pursue financing and strategic alternatives." DSL.net will host a conference call to discuss results for the quarter, as well as future plans and expectations, Thursday, May 12, 2005, at 11 a.m., Eastern Time. Interested parties may listen to the live audio webcast of the call by visiting the investor relations Investor relations The process by which the corporation communicates with its investors. section of DSL.net's Web site, www.dsl.net. The call also may be accessed live via telephone by dialing 800-289-0518, confirmation code 8568450. For those unable to access the live conference call, an audio replay will be available until 11 p.m., Eastern Time, through the end of May, by dialing 888-203-1112 and entering code 8568450. Investors may also access the call replay by visiting the investor relations section of the Company's Web site. 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 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. In particular, the risks and uncertainties associated with DSL.net's business include, among other things, (i) fluctuations in DSL.net's quarterly operating results, which could adversely affect the price of its common stock; (ii) DSL.net's unproven unproven Dubious, nonscientific, not proven, quack, questionable, unscientific adjective Relating to that which has not been validated by reproducible experiments or other scientific methods for determining effect or efficacy business model, which may not be successful; (iii) DSL.net's ability to raise sufficient additional capital on acceptable terms, or at all, to finance continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the or DSL.net's pursuit of strategic opportunities; (iv) 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. 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 or to cease operations; (v) DSL.net's ability to maintain compliance with the American Stock Exchange's continuing listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. , which failure could adversely impact the pricing and trading of DSL.net's common stock; (vi) regulatory, legislative and judicial developments, which could adversely affect the way DSL.net operates its business or increase its costs of operations; (vii) risks associated with potential financing, strategic and/or merger and acquisition transactions, including, without limitation, difficulties in identifying and completing any of such transactions, integrating businesses or assets and realizing the revenue, earnings or synergies anticipated from any transactions; (viii) competition; (ix) the marketplace's receptiveness re·cep·tive adj. 1. Capable of or qualified for receiving. 2. Ready or willing to receive favorably: receptive to their proposals. 3. to DSL.net's offering of integrated voice and data services; (x) DSL.net's ability to recruit and retain qualified personnel; and (xi) DSL.net's dependence on third-party providers to supply it with local DSL and T-1 facilities in areas where it has not deployed its own equipment. 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 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 31, 2004, which has been filed with the Securities and Exchange Commission. DSL.net is a trademark of DSL.net, Inc. Other company names may be trademarks of their respective owners. (Financial Tables Follow)
DSL.net, Inc.
Statements of Operations
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2005 2004
------------ ------------
Revenue $15,440 $17,820
------------ ------------
Operating expenses:
Network (a) 10,069 12,199
Operations 1,765 3,189
General and administrative (a) 2,707 2,927
Sales and marketing 430 2,343
Depreciation and amortization 2,000 3,318
------------ ------------
Total operating expenses 16,971 23,976
------------ ------------
Operating loss (1,531) (6,156)
Interest expense, net (2,109) (981)
Other income (expense), net 138 74
------------ ------------
Net loss $(3,502) $(7,063)
============ ============
Net loss applicable to common stockholders:
Net loss $(3,502) $(7,063)
Dividends on Series X and Y preferred
stock - (490)
Accretion of Series X and Y preferred
stock - (3,452)
Fair value of Series Z preferred stock - -
------------ ------------
Loss applicable to common stockholders $(3,502) $(11,005)
============ ============
Net loss per common share - basic and diluted $(0.01) $(0.08)
============ ============
Shares used in computing net loss per share 233,620,150 136,459,553
============ ============
Other data:
Reconciliation of net loss to adjusted
EBITDA & free cash flow:
Net loss $(3,502) $(7,063)
Add back:
Interest and other (income) expense,
net 1,971 907
Depreciation and amortization 2,000 3,318
------------ ------------
Adjusted EBITDA 469 (2,838)
Less Capital Expenditures (60) (207)
------------ ------------
Free cash flow $409 $(3,045)
============ ============
(a) Depreciation and amortization were excluded from the following
expense line items
and presented as a separate operating expense line item:
Depreciation and amortization:
Network $1,824 $2,766
G&A 176 552
------------ ------------
Total $2,000 $3,318
============ ============
DSL.net, Inc.
Condensed Balance Sheet
(dollars in thousands)
(unaudited)
March 31, December 31,
2005 2004
------------ ------------
Cash and cash equivalents $7,995 $7,079
Accounts receivable, net of allowances 5,798 6,344
Other current assets 2,233 4,776
------------ ------------
Total current assets 16,026 18,199
Net property and equipment 10,808 12,719
Other assets 9,680 9,944
------------ ------------
Total assets 36,514 40,862
============ ============
Current liabilities 11,144 13,926
Long-term obligations - less current portion 16,766 14,830
Stockholders' equity 8,604 12,106
------------ ------------
Total liabilities and stockholders' equity $36,514 $40,862
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