Data Return Reports 47% Increase in Revenue From Prior Year Period; Revenues Total $13.6 Million; Major New Enterprise Business Secured.Business Editors DALLAS--(BUSINESS WIRE)--Aug. 7, 2001 Data Return Corporation (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 : DRTN), a leading global provider of managed hosting services, today reported results for the first fiscal quarter 2002 ended June June: see month. 30, 2001. Revenue for the first quarter of fiscal 2002 was $13.6 million, an increase of 47% from the prior year period, and a decrease of six percent from the previous quarter. Cash gross margin, net of depreciation and amortization, was 33.6% versus 41.8% in the prior quarter and 24.8% in the first quarter of fiscal 2001. Servers managed by the Company totaled 1,266 with average revenue per server of $3,188. First 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 , excluding a 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 $2.2 million or $0.06 per share, was negative $8.4 million or $0.23 per share as compared to negative $7.8 million, or $0.22 per share in the previous quarter. Net loss excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). was $14.0 million, or $0.39 per share, compared to a loss of $12.9 million, or $0.36 per share, reported for the quarter ended March 31, 2001. New clients added during the first quarter include Dairy Queen Dairy Queen (also known as DQ) is an ice-cream shop and fast-food restaurant franchise based in the United States and founded in 1940. For many years the franchise's slogan was "We treat you right!" In recent years, it has been changed to "DQ something different. , Fallon Fallon may refer to: People Fallon is the name of an Irish family from Connacht, a branch of the royal dynasty of the kingdom of Hy-Many or Ui Maine.
in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ), Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) Computer Entertainment Europe, and Best Transport. Existing customers who expanded their service relationships with the Company include Match.com, Countrywide coun·try·wide adv. & adj. Throughout a whole country; nationwide: launched a fundraising campaign countrywide; a countrywide search. Adj. 1. , Opus-i and Zenith zenith, in astronomy, the point in the sky directly overhead; more precisely, it is the point at which the celestial sphere is intersected by an upward extension of a plumb line from the observer's location. Insurance Company among others. "In addition to major enterprise wins, we expanded our technology leadership this quarter," said Sunny C. Vanderbeck, Data Return Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We launched an innovative solution that solves the problem of application survivability sur·viv·a·ble adj. 1. Capable of surviving: survivable organisms in a hostile environment. 2. That can be survived: a survivable, but very serious, illness. . Our Business Continuity Services suite allows traffic to be seamlessly shifted in real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. across data centers based on application load and infrastructure availability. We also completed our 360(0) Security suite, a comprehensive security package addressing all layers of security with real-time and event-based services. In addition, our leadership in aggressively introducing new Microsoft technology was demonstrated by our successful deployment of vscodeswap.com, an add-in to Microsoft's Visual Studio.NET product and the first hosted application built on Beta 2 of that product." "Our refocused efforts on the enterprise are paying off, as indicated by major customer wins and increasing average revenue per customer," said Stuart A. Walker, Sr. Vice President and Chief Financial Officer. "Additionally we expect to see a significant decline in costs during the second quarter as we realize the full impact of the restructuring we implemented during the last quarter. We continue to stay focused on aggressive cost management and expect to realize additional savings through lower facilities and infrastructure charges and further savings in discretionary and personnel expenses." "The number one imperative for our business is to match our cost structure with current revenue levels and drive our business to 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 in the near-term," concluded Vanderbeck. "We are executing a plan to deal with the current operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. through a restructuring of our operations with an objective to achieve cash flow breakeven at current revenue levels." Q1 FY2002 Operational Highlights - A redesign of the company's core network infrastructure in all data centers has decreased spanning-tree configuration by eight times making the network more reliable and predictable. Network configurations are standardized but remain flexible and tailored to customers needs. Standardizing on these platforms further reduces customer implementation time. - Continued optimizations in the area of automation technologies reduced the new product release cycle by 62% while also increasing quality assurance measures. - Expanded support for Microsoft .NET Enterprise Server products including BizTalk Server 2000, Commerce Server 2000, and Application Center 2000. BizTalk Server 2000 is now available in a clustered environment. Commerce Server 2000 has been integrated into the Business Continuity Services suite. - Introduced 360(degree) Security, a comprehensive suite of real-time and event-based security services. - Introduced Business Continuity Services, a suite of products that allow managed hosting customers to deploy their applications across multiple data centers to increase application availability by providing for browser-transparent failover of transactional applications at a price only marginally higher than traditional single-location solutions - Due to operational savings achieved through process automation as well as the effects of the slower economy, the Company executed a cost-reduction plan that reduced its workforce by 18%, achieving a projected cost savings of $2.4 million per quarter. Employee headcount decreased by 84 to 447 from 531 in the prior quarter. - Customer churn increased to 9.1% in the first quarter. Planned churn associated with seasonality and other factors comprised 2.8%, customer downgrades comprised 0.8% and customer departures comprised the remaining 5.5%. Q1 FY2002 Financial Highlights - Dedicated managed hosting revenue was $11.4 million, an increase of 66% from $6.9 million in the prior year period, and a decrease from $11.8 million in the fourth quarter of fiscal 2001. - Gross dedicated customer additions totaled 24 during the first quarter, of which 21 were enterprise customers. - Average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenue per customer for the first quarter increased to $164,000, up from $158,000 the previous quarter and $128,000 in the first quarter of last year. - Revenue mix was 75% enterprise, 15% dot-com (1) Refers to the period (dot) followed by the abbreviation of the commercial domain (.com) at the end of an Internet address. Since the .com domain is so widely used, the Internet became known as the "dot-com" world, and dot-com companies are those formed to offer services or and 10% ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). , excluding the impact of Goldpocket Interactive, which represented approximately 12% of 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 at the end of the quarter. - Total number of servers managed by Data Return was 1,266 at the end of the first quarter. - Average monthly revenue per dedicated server, excluding Goldpocket, increased 8% during the quarter to $3,006 versus $2,795 in the fourth quarter and $2,271 in the first quarter of last year. - Cost of revenues was $13.2 million in the first quarter, an increase of $1.1 million from $12.1 million in the fourth quarter. The sequential increase in cost of revenues was due largely to increased fixed cost commitments associated with infrastructure, colocation and bandwidth in our New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London facilities. Business Outlook The current economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. continues to impact the Company's visibility. As a result, the Company will remain conservative and only provide guidance on a quarterly basis. Revenue is currently projected at approximately $13 million for the second fiscal quarter. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. should decline at least $2.4 million as a result of the previously announced restructuring. Conference Call Data Return will conduct a conference call on Tuesday, August 7, at 5:00 p.m. eastern. To participate in the conference call, please dial 212-346-0258. If you are unable to participate in the live conference call, a replay will be made available. To access the replay, please dial 858-812-6440 and enter the pass code "19446723" from approximately two hours after the call until 7:00 p.m. eastern on August 9, 2001. The conference call will also be accessible on Data Return's web site at www.datareturn.com. About Data Return Recognized as the Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. 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 and The World Bank. 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, including those contained in the section titled "Business Outlook" 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 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 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 March 31, 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 trademark of Data Return Corporation. All other trademarks are the property of their respective holders.
Data Return Corporation
Statements of Operations
in thousands, except per share data
(unaudited)
Three Months Ended
June 30,
-----------------------
2001 2000
-----------------------
Revenues $ 13,583 $ 9,247
Costs and expenses:
Cost of revenue 13,158 9,011
General and administrative 5,936 4,231
Marketing and sales 6,886 4,597
Product research and development 1,219 772
Stock based compensation 15 100
Restructuring Costs 2,191 -
Total costs and expenses 29,405 18,711
Loss from Operations (15,822) (9,464)
Other income (expense):
Interest income 407 1,226
Interest expense (852) (445)
Other expense, net 38 -
Net loss $ (16,229) $ (8,683)
Net loss per common share:
Basic and diluted $ (0.45) $ (0.24)
Shares used in computing
basic and diluted net 36,018 35,443
loss per share
Other financial data:
EBITDA 1 $ (10,630) $ (6,857)
(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
Consolidated Balance Sheet
(in thousands)
June 30, March 31,
2001 2001
----------------------------------
(unaudited)
Assets
Current assets:
Cash and available-for-sale
securities 19,896 33,366
Accounts receivable, net of
allowance for doubtful accounts of
$933 and $1,589 at June 30, 2001
and March 31, 2001, respectively 6,837 8,477
Prepaid expenses and other assets 1,210 1,189
Total current assets 27,943 43,032
Property and equipment, net 42,529 44,104
Other assets 491 496
Total assets 70,963 87,632
Liabilities and shareholders' equity
Current liabilities:
Accounts payable 2,072 2,443
Accrued expenses and other 5,267 4,265
Deferred revenue 4,717 5,717
Capital lease obligations-short term 13,822 12,193
Total current liabilities 25,878 24,618
Capital lease obligations-long term 16,744 18,853
Commitments and contingencies - -
Total liabilities 42,622 43,471
Shareholders' equity
Preferred stock, $.001 par value;
20,000 shares authorized, none
issued or outstanding - -
Common stock, $.001 par value;
100,000 shares authorized; 36,044
and 35,979 issued and outstanding
at June 30, 2001 and March 31,
2001, respectively 36 36
Additional paid-in capital 110,614 110,497
Prepaid broadband services (4,175) (4,594)
Deferred stock compensation (104) (119)
Accumulated deficit including
comprehensive income (78,030) (61,659)
Total shareholders' equity 28,341 44,161
Total liabilities and shareholders'
equity 70,963 87,632
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