Data Return Announces 98% Sequential Increase in Third Quarter 2000 Revenue; Revenue Increases 630% Year Over Year.Business Editors DALLAS--(BUSINESS WIRE)--Feb. 1, 2000 Data Return Corporation (Nasdaq: DRTN) today reported results for the third fiscal quarter and nine months ended December December: see month. 31, 1999. Total revenue for the third fiscal quarter of 2000 was $3.4 million, a 98% sequential One after the other in some consecutive order such as by name or number. increase from $1.7 million in the second quarter, and a 630% increase over $467,500 for the third quarter of fiscal 1999. &uot;The explosive rate at which the market is adopting the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of complex hosting solutions for the 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. platform resulted in tremendous sequential revenue growth for the quarter,&uot; said Sunny C. Vanderbeck, chairman and chief executive officer. &uot;We believe fully managed hosting services provide substantially greater value for customers than traditional colocation-based hosting services. We expect the enormous adoption of 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. will continue to accelerate the demand for fully managed hosting services. Therefore, we believe Data Return is extremely well positioned to deliver the hosting service model of choice for both dot.com See dot-com. and enterprise customers. Data Return's position and performance in the hosting market resulted in 173 new clients during this quarter, expanding our base to 952 clients as of December.&uot; Revenue from new clients accounted for more than 34% of total sequential revenue growth. New Data Return clients added during the third quarter include Tenet Health Systems, Gamebay.com, 3Com and others. Existing customers who expanded their service relationships with the Company include Dash.com, PlanetOutdoors, Pier 1 Imports Pier 1 Imports Inc. (NYSE: PIR) is a Fort Worth, Texas-based retailer specializing in imported home furnishings and decor, particularly furniture, table-top items, decorative accessories and seasonal decor. , the U.S. Council of Better Business Bureaus, Inc. and Trane For the Jazz musician known by the nickname "Trane", see John Coltrane Trane, a business of American Standard Companies, is a global provider of heating, ventilating and air conditioning (HVAC) systems and building management systems and controls. Corporation. &uot;As the trend toward outsourced application hosting accelerates, we will continue to invest heavily in our infrastructure,&uot; added Vanderbeck. &uot;Adding significant depth of expertise to our 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 remains one of our top priorities, and in anticipation of increased demand, we nearly doubled our headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. for the second consecutive quarter.&uot; Third 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 $3.0 million, or $0.09 per share, as compared to negative $184,000, or $0.01 per share, in the prior year period. The Company reported a net loss of $4.0 million, or $0.12 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share in the quarter ended December 31, 1999, compared to a loss of $309,000, or $0.02 per diluted share, reported in the third fiscal quarter of 1999. For the nine months ended December 31, 1999, total revenue was $6.4 million, an increase of 572% over $1.1 million for the same period last year. The net loss for the nine-month period was $6.6 million, or a $0.24 loss per diluted share. Data Return will conduct a conference call on Wednesday Wednesday: see week. , February February: see month. 2, at 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . To participate in the conference call, please dial 1-800-633-8489. 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 &uot;14154213&uot; from approximately two hours after the call until 11:59 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on February 9, 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 1000 companies worldwide, Data Return (NASDAQ: DRTN) is a leading provider of advanced managed hosting services based on Microsoft technologies. Data Return customers include Microsoft, Fossil, Executive Software International, 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 as an Application Infrastructure Provider (AIP AIP acute intermittent porphyria. AIP Acute intermittent porphyria ) is committed to delivering advanced hosting services that enable Independent Software Vendors (ISVs) to become Application Service Providers (ASPs). Strategic partners and equity shareholders in Data Return include Microsoft Corp., 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 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 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. . 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 &uot;Factors Affecting Future operating Results&uot; in Data Return's Form 10-Q Form 10-Q See 10-Q. filed December 10, 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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
(unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenues $ 3,414 $ 468 $ 6,367 $ 1,114
Costs and expenses:
Cost of revenue 3,090 280 4,861 728
Marketing and sales 1,854 163 3,306 433
General and administrative 2,087 244 4,176 667
Stock based compensation 1,230 86 1,527 257
-------- -------- -------- --------
Total costs and expenses 8,261 773 13,870 2,085
-------- -------- -------- --------
Loss from operations (4,847) (305) (7,503) (971)
Other income (expense):
Interest income 891 3 1,003 14
Interest expense (78) (4) (90) (7)
-------- -------- -------- --------
Net Loss $ (4,034) $ (306) $ (6,590) $ (964)
======== ======== ======== ========
Net loss per common share:
Basic and diluted $ (0.12) $ (0.02) $ (0.24) $ (0.05)
======== ======== ======== ========
Shares used in computing
basic and diluted net
loss per share 32,833 17,850 27,239 17,679
======== ======== ======== ========
Other Financial Data:
EBITDA (1) $ (2,974) $ (184) $ (5,064) $ (638)
(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
(unaudited)
December 31, March 31,
1999 1999
----------- --------
Assets
Current assets:
Cash $ 92,781 $ 843
Restricted cash - 125
Accounts receivable, net of allowance
for doubtful accounts of $20 and
$234 at March 31, 1999 and
December 31, 1999, respectively 2,656 368
Prepaid and other 1,086 28
--------- ---------
Total current assets 96,523 1,364
Property and equipment, net 9,876 826
Other assets 374 24
--------- ---------
Total assets $ 106,773 $ 2,214
========= =========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 1,465 $ 289
Accrued expenses 1,285 133
Deferred revenue 1,153 286
Notes payable and capital lease obligations 2,249 95
--------- ---------
Total current liabilities 6,152 803
Notes payable and capital lease obligations 4,579 166
Commitments and contingencies - -
--------- ---------
Total Liabilities 10,731 969
Shareholders' equity:
Preferred stock, $.001 par value;
20,000 shares authorized, none
issued or outstanding - -
Common stock, $.001 par value; 100,000
shares authorized; 20,552 and 35,398
issued and outstanding at March 31, 1999
and December 31, 1999 respectively 35 21
Additional paid-in capital 109,614 3,893
Prepaid broadband services (5,000) -
Deferred stock compensation (543) (1,195)
Accumulated deficit (8,064) (1,474)
--------- ---------
Total shareholders' equity 96,042 1,245
--------- ---------
Total liabilities and shareholders' equity $ 106,773 $ 2,214
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