Data Return Expects over $25 Million in Annual Savings From Recent Cost-Cutting Initiatives; Company Anticipates Over $15 million in Cost Savings Announced Today.Business Editors & High Tech Writers DALLAS--(BUSINESS WIRE)--Sept. 18, 2001 Data Return Corporation (Nasdaq:DRTN), a leading global provider of managed hosting services, today announced it expects to realize approximately $3.9 million per quarter, or over $15 million annually, in cost savings as a result of various cost-cutting measures. These cost savings are in addition to the $2.4 million per quarter that the Company expects to save as a result of the reduction in force and related cost savings announced in May 2001. The Company expects combined annual savings of more than $25 million. The cost savings announced today are part of the cash flow breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations plan previously announced by the Company. The majority of the cost savings relate to expense and personnel reductions that are expected to be realized as a result of a voluntary separation package offered to employees in early August. Employees of Data Return involved in certain customer service, field sales and software development positions were not eligible for the package. The Company expects that savings related to this package, combined with additional cost savings measures, such as decreased discretionary expenses, will result in cost savings totaling $3.9 million per quarter. These savings will be realized over several months with the full impact of all of the cost reductions occurring during the third fiscal quarter ending December 31, 2001. The Company continues to work on other elements of the plan that are necessary for it to become cash flow breakeven. As a result of the cost cutting measures announced today, the Company expects to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. an additional restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $1.5 million during its second fiscal quarter ending September 30, 2001. The collective cost savings of the recent reduction in spending on personnel, travel, and other areas, when added to the expense reductions announced in May, total more than $6.3 million per quarter in cost savings for the Company. "The recently instituted cost saving measures, including the voluntary separation program, should not impact Data Return's ability to conduct business, as they represent a resizing of our cost structure and workforce relative to the current level of business," said Stuart Walker Stuart Walker (born January 9, 1951 in Garforth is an English former professional football goalkeeper and is currently a physiotherapist at Aston Villa. Walker joined York City[1] , Data Return senior vice president and CFO See Chief Financial Officer. . "We will continue to evaluate all parts of the business to reduce ongoing expenses, and we are confident that Data Return's customers will continue to enjoy the higher standard of managed hosting they've come to expect as we move closer to our goal of becoming 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 positive in the near term," said Walker. About Data Return Recognized by Microsoft as the Windows 2000 Global Hosting Partner of the Year 2000, Data Return specializes in providing high-availability managed hosting services for companies whose applications are based on Microsoft technologies. These services are utilized by many leading enterprises including Microsoft, 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/. , RadioShack.com, Texas Instruments See TI. (company) Texas Instruments - (TI) A US electronics company. A TI engineer, Jack Kilby invented the integrated circuit in 1958. Three TI employees left the company in 1982 to start Compaq. , H&R Block, The World Bank, and Fossil. Data Return also provides managed infrastructure services for the rapidly growing market of Application Service Providers (ASPs). Data Return strategic investors and Global Alliance Partners include Microsoft, Compaq Computer Corporation 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. Statements made in this press release that state Data Return's or management's intentions, plans, beliefs, expectations or predictions of "future events" are 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. 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 Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the Quarter Ended June 30, 2001 and are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. The forward-looking statements contained herein represent the judgment of Data Return as of the date of this release, and Data Return disclaims any intent or obligation to update or revise such forward-looking statements to reflect any change in Data Return's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or any change in events, conditions 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 on which such statements are based. Data Return is a trademark of Data Return Corporation. All other trademarks are the property of their respective holders. |
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