Data Return Announces 60% Sequential Increase in Fourth Quarter 2000 Revenue.Business & Technology Editors DALLAS--(BUSINESS WIRE)--May 10, 2000 -- Dedicated Hosting Typically refers to a single Web site that is hosted on a stand-alone server. See dedicated server. Revenue Increases 87% -- Company Comments On Strong Outlook Data Return Corporation (Nasdaq: DRTN), a leading provider of advanced managed hosting services based on Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. technologies, today reported results for the fourth fiscal quarter and year ended March 31, 2000. Total revenue for the fourth fiscal quarter of 2000 was $5.5 million, a 60% sequential increase from $3.4 million in the third quarter, and a 605% increase over $775,000 for the fourth quarter of fiscal 1999. For the fiscal year ended March 31, 2000, total revenue was $11.8 million, an increase of 526% from $1.9 million for the same period last year. "As every industry rapidly increases its dependence on e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. , the demand for complex managed hosting solutions should continue to be robust. This increased reliance on outsourced solutions is a key driver for our successful fourth quarter results," said Sunny C. Vanderbeck, Data Return chairman and chief executive officer. "Data Return's final fiscal quarter was marked by significant client wins in its chosen market: highly complex, transactional hosting solutions. Our dedicated hosting revenue grew 87% and accounted for 62% of our quarterly revenue mix. This reflects a 94% increase in the number of dedicated customers and demonstrates the growing acceptance of the outsourced hosting model." Revenue from new clients accounted for more than 62% of total sequential recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue growth. New Data Return clients added during the fourth quarter include GoldPocket Interactive, Freescholarships.com, Raytheon Raytheon Company (NYSE: RTN) is a major American defense contractor and industrial corporation with core manufacturing concentrations in defense systems and defense and commercial electronics. and Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing LLP LLP - Lower Layer Protocol , as well as State Street Research and the Red Cross. Existing customers who expanded their service relationships with the Company include Microsoft, Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 , Alibre Alibre, Inc. is a US-based software company located in Richardson, Texas. Its self-declared mission is to put 3D solid modeling software into the hands of anyone who needs it. , Padgett Padgett is a surname, and may refer to:
Communications and Tricon Resources. "The clients we've we've Contraction of we have. we've have deployed this quarter require some of the largest and most complex hosting configurations currently on the Microsoft platform," added Vanderbeck. "Our early focus in deploying the Windows 2000 platform combined with the proficiency pro·fi·cien·cy n. pl. pro·fi·cien·cies The state or quality of being proficient; competence. Noun 1. proficiency - the quality of having great facility and competence and skills of our team allows Data Return to answer the growing market demand. Through our efficiency and execution we have developed the ability to provide "lights-out" managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality in any data center, a growing component of our business. Additionally, we have internally formalized for·mal·ize tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es 1. To give a definite form or shape to. 2. a. To make formal. b. a process that cuts deployment time of Windows 2000 from hours to minutes, helping customers migrate to this highly scalable platform. These actions help to position Data Return as a thought leader in advanced hosting services." Fourth quarter 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 was negative $4.6 million, or $0.13 per share, as compared to negative $3.0 million or $0.09 per share, in the third fiscal quarter. The Company reported a net loss of $5.1 million, or $0.14 per share in the quarter ended March 31, 2000, compared to a loss of $4.0 million, or $0.12 per share, reported in the third fiscal quarter of 2000. The net loss for fiscal year ended March 31, 2000 was $11.7 million, or $0.40 per share compared to a net loss of $1.3 million, or $0.07 per share in fiscal 1999. OUTLOOK "Looking ahead," added Vanderbeck, "based on the strength of our market and the company's success to date, we believe that Data Return's revenue growth outlook for the fiscal year 2001 has increased. We believe that we're we're Contraction of we are. we're we are well positioned to exceed the three-fold increase in revenue currently projected by analysts." Data Return will conduct a conference call on Wednesday Wednesday: see week. , May 10, at 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . To participate in the conference call, please dial 1-888-391-0091. If you are unable to participate in the live conference call, a replay will be made available. To access the replay, please dial 1-800-633-8284 and enter the passcode "15016835" from approximately two hours after the call until 11:59 p.m. EST on May 17, 2000. The conference call will also be accessible on Data Return's web site at www.datareturn.com. About Data Return Managing over 1,600 applications for more than 1,000 companies worldwide, Data Return (Nasdaq: DRTN) is a leading provider of advanced managed hosting services based on Microsoft technologies. Data Return customers include Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, , Compaq Computer Corporation (company) Compaq Computer Corporation - The largest US manufacturer and vendor of IBM PC compatible personal computers and servers. Compaq was started in 1982 by three ex-Texas Instruments employees. Quarterly sales $2499M, profits $210M (Aug 1994). http://compaq.com/. , Fossil, Alibre, Executive Software, PlanetOutdoors.com, Berlitz Languages, Sensormatic Wikipedia is not the place for advertisement or self-advertising. Sensormatic, currently known as Tyco Fire & Security, is in the business of the manufacture and sale of electronic article surveillance equipment. Electronics, Boeing (language) BOEING - An early system on the IBM 1130. [Listed in CACM 2(5):16, May 1959]. Company and First USA Bank. Data Return also is a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. Application Infrastructure Provider (AIP AIP acute intermittent porphyria. AIP Acute intermittent porphyria ) that is enabling Independent Software Vendors to rapidly become Application Service Providers (ASPs). Strategic partners and equity shareholders in Data Return include Microsoft Corp., Compaq Computer Corp. and Level 3 Communications
Level 3 Communications NASDAQ: LVLT is a communications and information services company headquartered in Broomfield, Colorado, USA. . For more information, visit www.datareturn.com. This press release contains forward-looking information. Actual results may differ materially due to a number of risks, including changes in external competitive market factors, changes in or an inability to execute Data Return's business strategy, unanticipated changes in the hosting industry, the economy in general and changes in the use of the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . Data Return cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in Data Return's Prospectus dated October 27, 1999 and are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Data Return does not assume any obligation to update the forward-looking information contained in this press release. Data Return is a trademark of Data Return Corporation. Other trademarks are the property of their respective owners.
DATA RETURN CORPORATION
STATEMENT OF OPERATIONS
in thousands, except per share data
Three Months Ended Year Ended
March 31, March 31,
------------------ ------------------
2000 1999 2000 1999
-------- -------- -------- --------
(unaudited)
Revenues $ 5,466 $ 775 $ 11,833 $ 1,889
Costs and expenses:
Cost of revenue 4,788 377 9,277 1,105
Marketing and sales 3,068 230 6,212 663
General and administrative 3,522 396 8,050 1,063
Stock based compensation 252 92 1,852 349
-------- -------- -------- --------
Total costs and expenses 11,630 1,095 25,391 3,180
-------- -------- -------- --------
Loss from operations (6,164) (320) (13,558) (1,291)
Other income (expense):
Interest income 1,299 6 2,191 20
Interest expense (231) (5) (321) (13)
-------- -------- -------- --------
Net Loss $ (5,096) $ (319) $(11,688) $ (1,284)
======== ======== ======== ========
Net loss per common share:
Basic and diluted $ (0.14) $ (0.02) $ (0.40) $ (0.07)
======== ======== ======== ========
Shares used in computing basic
and diluted net loss per share 35,398 20,521 29,268 18,371
======== ======== ======== ========
Other Financial Data:
EBITDA 1 $ (4,584) $ (175) $ (9,536) $ (813)
======== ======== ======== ========
(1) EBITDA consists of loss from operations plus depreciation and
amortization, including amortization of unearned stock based
compensation. EBITDA does not represent funds available for
management's discretionary use and is not intended to represent
cash flow from operations as measured under generally accepted
accounting principles. EBITDA should not be considered as an
alternative to net loss or net cash used in operating activities,
but may be useful to investors as an indication of operating
performance. Our calculations of EBITDA may not be consistent with
calculations of EBITDA used by other companies.
DATA RETURN CORPORATION
BALANCE SHEET
in thousands, except per share data
March 31, March 31,
2000 1999
--------- ---------
Assets
Current assets:
Cash $ 85,424 $ 843
Restricted cash -- 125
Accounts receivable, net of allowance for
doubtful accounts of $328 and $20 at
March 31, 2000 and 1999, respectively 5,429 368
Prepaid and other 1,349 28
--------- ---------
Total current assets 92,202 1,364
Property and equipment, net 22,027 826
Other assets 628 24
--------- ---------
Total assets $ 114,857 $ 2,214
========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 2,021 $ 289
Accrued expenses 2,205 133
Deferred revenue 2,207 286
Notes payable and capital lease obligations 5,799 95
--------- ---------
Total current liabilities 12,232 803
Notes payable and capital lease obligations 11,324 166
Commitments and contingencies -- --
--------- ---------
Total Liabilities 23,556 969
Shareholders' equity:
Preferred stock, $.001 par value; 20,000
shares authorized, none issued or
outstanding -- --
Common stock, $.001 par value; 100,000
shares authorized; 35,398 and 20,552 and
issued and outstanding at March 31, 2000
and 1999 respectively 35 21
Additional paid-in capital 109,718 3,893
Prepaid broadband services (5,000) --
Deferred stock compensation (290) (1,195)
Accumulated deficit (13,162) (1,474)
--------- ---------
Total shareholders' equity 91,301 1,245
--------- ---------
Total liabilities and shareholders' equity $ 114,857 $ 2,214
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