Destia Communications, Inc. Reports First Quarter 1999.

PARAMUS, N.J.--(BUSINESS WIRE)--May 3, 1999--

Destia Communications, Inc. today reported its results for the quarter ended March 31, 1999. This information is contained below.

Destia's total revenues for the first quarter of 1999 were $62.6 million. This represented an increase of 50% over revenues of $41.7 million for the first quarter of 1998 and an increase of 19% over revenues of $52.8 million for the fourth quarter of 1998. Wholesale revenues declined as a percentage of total revenues during the first quarter although such revenues may increase in future periods. The number of customer accounts increased to approximately 475,000 at March 31, 1999, compared to approximately 209,000 at March 31, 1998 and approximately 357,000 at December 31, 1998. Retail direct dial revenues for the first quarter of 1999 increased more than 130%, as compared to the first quarter of 1998. This increase was primarily attributable to growth, in percentage terms, of revenues from new customers in continental Europe and the United States. Revenues from calling card and prepaid card services increased 78% over the same period as a result of increased marketing efforts, particularly in the United States and continental Europe. Destia's revenues per minute declined due to continuing competition but its gross margins improved slightly due to a greater decline in per minute cost of services.

Destia's gross profit margin in the first quarter of 1999 improved to 29.1% from 24.5% in the comparable quarter of the prior year and was up slightly from the 29.0% reported for the fourth quarter of 1998. These increases were primarily attributable to improved line cost management, the continued expansion of the Destia network, increased utilization of owned and leased transmission capacity and its continued focus on higher margin retail services. Destia's gross margins improve as it brings traffic onto its owned facilities because that is a less expensive transmission media and because depreciation expense is not included in the calculation of gross margins. Destia's gross margins increased even though its revenues per minute declined.

Selling, general and administrative, or SG&A, expenses as a percentage of revenues were 42.5% in the first quarter of 1999, compared to 37.2% in the first quarter of 1998 and 43.5% in the fourth quarter of 1998. The increase in SG&A expenses as a percentage of revenues in the year-to-year periods was primarily attributable to a lower portion of wholesale revenues and an increase in staffing-related costs and marketing and promotional expenses.

The increase in retail revenues as a percentage of total revenues contributed to an increase in SG&A expenses because retail revenues have higher selling expenses than wholesale revenues. The increase in marketing and promotional expenses was primarily the result of Destia's spending in developing marketing and sales channels in Europe, as well as increased marketing expenditures to grow the retail customer base in North America.

Destia reported a net loss of $24.5 million in the first quarter of 1999, compared to a net loss of $12.6 million in the comparable period of 1998. The increase in net loss is primarily due to the higher level of SG&A expenses and higher interest expense incurred on its bonds.

EBITDA (net income (loss) plus net interest expense, income tax expense, and depreciation and amortization expense) as a percentage of revenues was a negative 14.0% in the quarter ended March 31, 1999 compared to a negative 12.6% for the quarter ended March 31, 1998. The EBITDA margin improved for the second consecutive quarter, however, from a negative 15.0% in the fourth quarter of 1998 and a negative 16.1% in the third quarter of 1998. Destia reported EBITDA losses of $8.8 million for the first quarter of 1999 compared to $5.2 million in the first quarter of 1998. Destia reported a net loss of $24.5 million in the first quarter of 1999 compared to a net loss of $12.6 million in the comparable period of 1998.

Destia's network includes carrier-grade Northern Telecom switches in Amsterdam, Berlin, Brussels, Chicago, Dallas, Frankfurt, London, Los Angeles, Miami, New York, Paris, Toronto, Washington D.C. and Zurich; and ten additional points of presence ("POPs") in North America and seven additional POPs in Europe. Destia has over 120 interconnection points to local carriers in the U.S. and PTTs in Europe and has direct network interconnection in the United Kingdom, Belgium, Germany, Switzerland and France. These network elements are linked through a combination of owned and leased trans-Atlantic connections and leased lines within Europe and the United States. Destia currently has a sales presence in Austria, Belgium, Canada, France, Germany, Greece, Switzerland, the United Kingdom, the Netherlands and various major cities in the U.S.

Destia's customer base consists primarily of residential customers, commercial customers, ethnic groups and telecommunications carriers. Destia currently offers a broad portfolio of telecommunications services including international and domestic long distance, prepaid and post-paid calling cards and wholesale services in the United States, the United Kingdom and in selected markets in continental Europe. Destia recently introduced Internet access and its first e-commerce product, Presto! Card, which is a "virtual" prepaid card, in selected markets.

Certain statements herein are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based upon the belief of Destia's management, as well as assumptions made beyond information currently available to Destia's management. Because such "forward-looking statements" are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such "forward-looking statements". Factors that could cause results to differ materially from those expressed or implied by such "forward-looking statements" include, but are not limited to, highly competitive market conditions; general economic conditions; the rate of expansion of Destia's network and/or customer base; inaccuracies in Destia's forecasts of telecommunications traffic or customers; changes in the availability of transmission facilities; customer retention and credit risk; changes in or developments under laws, regulations, licensing requirements or telecommunications standards; currency fluctuations; changes in retail or wholesale telecommunications rates; changes in international settlement rates; the loss of the services of certain members of Destia's senior management and other factors discussed in filings made by Destia with the Securities and Exchange Commission. The foregoing review of important factors should not be construed as exhaustive; Destia undertakes no obligation to release publicly the results of any future revisions it may make to any forward-looking statements to reflect events or circumstances after the date hereof, including the occurrence of unanticipated events. -0-

                      Destia Communications, Inc.
                 Consolidated Statements of Operations

                                                      Three Months
                                                     Ended March 31,
                                                  --------------------
                                                    1999        1998
                                                  --------------------
                                                 (in thousands, except
                                                     per share data)
                                                  --------------------
Statement of Operations Data:

Revenues                                          $62,619     $41,660
Cost of services                                   44,370      31,456
                                                  -------     -------
Gross profit                                       18,249      10,204
Selling, general and administrative expense        26,615      15,484
                                                  -------     -------
EBITDA (a)                                         (8,366)     (5,280)
Depreciation and amortization                       5,849       1,678
                                                  -------     -------
Income (loss) from operations                     (14,215)     (6,958)
Interest income, interest expense, other, net     (10,284)     (5,636)
Provision for income taxes                           --          --
                                                  -------     -------
Net income (loss)                                ($24,499)   ($12,594)
                                                  =======     =======

Net earnings (loss) per share (basic and
 diluted)                                         $ (1.17)    $ (0.61)
                                                  =======     =======
Weighted average number of shares of common
 stock outstanding (basic and diluted)             20,963      20,778
                                                  =======     =======

(a)  "EBITDA" is defined as net income (loss) plus net interest
     expense, income tax expense, and depreciation and amortization
     expense. Destia has included information concerning EBITDA herein
     because this type of information is commonly used in the
     telecommunications industry as one measure of a company's
     operating performance and liquidity. EBITDA is not determined
     using generally accepted accounting principles and, therefore,
     Destia's EBITDA is not necessarily comparable to EBITDA of other
     companies.