Internap Reports Financial Results for Second Quarter 2005; Revenues of $37.6 Million, Added 2,000th Customer During the Quarter.ATLANTA Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. -- Internap Network Services Corporation Internap Network Services Corporation, commonly referred to as Internap, provides computer network routing services and operates several data colocation centers throughout the world. (AMEX AMEX See: American Stock Exchange : IIP IIP Investors In People IIP International Information Programs (US State Department) IIP Index of Industrial Production IIP Iraqi Islamic Party IIP International Ice Patrol (US Coast Guard) ), a leading provider of performance-based routing services for IP networks, today reported financial results for the second quarter ended June June: see month. 30, 2005. For the second quarter of 2005, revenues totaled $37.6 million, an increase of 4.4% compared to the $36.0 million reported for the second quarter of 2004. Net loss for the second quarter 2005 was $1.0 million, an improvement of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75% compared to the net loss of $4.3 million reported for the same period in 2004. Quarterly Highlights: --The Company's customer base grew to 2019 customers an increase of 35 net new customers in the quarter. Among the new customers are: American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. , Feedster, Own It Mortgage, Towerstream, Wachovia For Moravian settlements in North Carolina, see . Wachovia Corporation (NYSE: WB), based in Charlotte, North Carolina, is the third largest banking chain in the United States based on total deposits. and Wizet Wizet is a game development studio located in Seoul, South Korea, and is popular for its hit game MapleStory. Wizet developed a franchise system and expanded its services to Japan, China, Taiwan, Thailand, USA and Europe. Corporation, Ltd. --Gross margin was 49% (defined as revenues of $37.6 million less $19.1 million of direct cost of revenues, excluding depreciation and amortization, divided by revenues) --Cash equivalents and investments in marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has at June 30, 2005 were $42.5 million --Launched BusinessNet(TM), one of the industry's first "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 " for accelerating data intensive TCP-based applications across long distances over 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 . Using GlobalRoute(R) Xcelerator Xcelerator is a steel launched roller coaster at Knott's Berry Farm in Buena Park, California. Xcelerator was Intamin AG's first hydraulically-launched coaster. It is the 9th fastest ride in the world. technology, the service can be provisioned in minutes with no equipment or software requirements. To date, there are 11 GRX GRX Getright Download List (file extension) GRX Granada, Spain - Granada (Airport Code) GRX Grunts (FAO fish species code) GRX GPRS Roaming Exchange Node GRX Graphics service delivery points throughout 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. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Asia
and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , which are enhanced by the Internap PNAP PNAP Protected Natural Areas Programme (New Zealand)PNAP Private Network Access Point PNAP Planar Network Analysis Programs architecture.
Second quarter results (in millions):
For the Three Months Ended:
June 30, March 31, June 30,
2005 2005 2004
---------- ---------- ----------
(restated)
Revenues $ 37.6 $ 37.9 $ 36.0
Direct cost of revenue, excluding
depreciation and amortization 19.1 19.9 18.9
Selling, general and
administrative expenses 15.6 15.0 17.0
Depreciation and amortization 3.9 3.5 3.8
---------- ---------- ----------
Loss from operations (1.0 ) (0.5 ) (3.7 )
Non-operating expenses, net -- 0.1 0.6
---------- ---------- ----------
Net loss $ (1.0 ) $ (0.6 ) $ (4.3 )
---------- ---------- ----------
EBITDA $ 2.9 $ 3.0 $ 0.1
========== ========== ==========
Conference Call Information: Internap's second quarter teleconference will be held today beginning at 5:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . The dial-in numbers are 866-800-8652; pass code 77824152 for domestic callers, and 617-614-2705, pass code 77824152 for international participants. The simultaneous web cast will be available from the Investor Services section of the web site at: www.internap.com. A replay will be made available approximately one hour after the conclusion of the call and will remain available for approximately two weeks. To access the replay, dial 888-286-8010, pass code 24889978 and international dial in at 617-801-6888, passcode 24889978. The conference call will also be webcast over the Internet; visit the Investor Services section of the Internap website at www.internap.com to access the call from the website. This webcast will be recorded and available for replay on the Internap website approximately two hours after the conclusion of the conference call for approximately two weeks. About Internap Internap is a market leader of intelligent route-control solutions that bring reliability, performance and security to the Internet. The company's patented and patent-pending technologies address the inherent weaknesses of the Internet, enabling enterprises to take full advantage of the benefits of deploying business-critical applications such as e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. , Voice-over-IP (VoIP), video-conferencing, and streaming audio/video across the Internet. Through a portfolio of high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" IP solutions, customers can bypass In communications, to avoid the local telephone company by using satellites and microwave systems. congestion The condition of a network when there is not enough bandwidth to support the current traffic load. congestion - When the offered load of a data communication path exceeds the capacity. points, overcome routing inefficiencies and optimize optimize - optimisation performance of their applications. Internap solutions are backed by an industry-leading performance guarantee that covers the Internet as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to just one network. These offerings include: network- and premise-based route optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. solutions, colocation See co-location. , VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. , content distribution and managed security services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the . Internap currently serves more than 2,000 customers, including Fortune 1000 and mid-tier enterprises in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , government, travel/hospitality, manufacturing, media/entertainment, technology and retail industries. The company provides services throughout North America, Europe, Asia and Australia. For more information, please visit the company website at www.internap.com. Internap "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Certain information included in this press release constitutes 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All statements, other than statements of historical facts, including, among others, statements regarding our future financial position, business strategy, projected levels of growth, projected costs and projected financing needs, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Internap and members of our management team, as well as the assumptions on which such statements are based, and equally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "projects," "forecasts," "plans," "intends," "should" or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by forward-looking statements. Important factors currently known to our management that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to our ability to achieve profitability; our ability to secure adequate funding; the incurrence In`cur´rence n. 1. The act of incurring, bringing on, or subjecting one's self to (something troublesome or burdensome); as, the incurrence of guilt, debt, responsibility, etc. s> Noun 1. of additional restructuring charges 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. ; the success of our recent operational restructurings; our ability to compete against existing and future competitors; pricing pressures; our ability to deploy new access points in a cost-efficient Adj. 1. cost-efficient - productive relative to the cost cost-effective efficient - being effective without wasting time or effort or expense; "an efficient production manager"; "efficient engines save gas" manner; our ability to successfully complete future acquisitions; risks associated with international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; the availability of services from Internet network service providers; failure of suppliers to deliver their products and services as agreed; failures in our network operations centers See NOC. Network Operations Center - (NOC) A location from which the operation of a network or internet is monitored. Additionally, this center usually serves as a clearinghouse for connectivity problems and efforts to resolve those problems. , network access points or computer systems; fluctuations in our operating results; our ability to operate in light of restrictions in our credit facility, including our ability to maintain ratios set forth in the credit facility; our ability to attract and retain qualified personnel; our ability to protect our intellectual property; the outcome of our securities litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; claims relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc intellectual property rights; evolution of the high performance Internet connectivity and services industry; our ability to respond to technological change; our ability to protect ourselves and our customers from security breaches; effects of terrorist activity; government regulation of the Internet; risks associated with material weaknesses in our internal controls identified as part of our evaluation under section 404 of the Sarbanes-Oxley Act See SOX. of 2002 and related increases in expense, including our ability to remediate re·me·di·a·tion n. The act or process of correcting a fault or deficiency: remediation of a learning disability. re·me those weaknesses; the dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of our stock price due to outstanding stock options and warrants; future sales of stock; and volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of our stock price. Our 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. , subsequent Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. , recent Current Reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release and the related conference call for analysts and investors speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason. Internap and P-NAP are registered trademarks and Flow Control Platform is a trademark of Internap. All other trademarks and brands are the property of their respective owners.
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
(restated) (restated)
Revenue $ 37,571 $ 35,999 $ 75,426 $ 72,248
---------- ---------- ---------- ----------
Costs and expense:
Direct cost of revenue,
exclusive of
depreciation and
amortization shown
below 19,109 18,934 38,996 38,086
Customer support 2,608 2,517 5,269 5,116
Product development 1,105 1,547 2,550 3,173
Sales and marketing 6,587 5,878 12,913 11,384
General and
administrative 5,269 7,036 9,759 12,135
Depreciation and
amortization 3,862 3,799 7,358 8,545
(Gain) loss on disposal
of property and
equipment (11 ) 2 (4 ) (8 )
---------- ---------- ---------- ----------
Total operating costs and
expense 38,529 39,713 76,841 78,431
---------- ---------- ---------- ----------
Loss from operations (958 ) (3,714 ) (1,415 ) (6,183 )
---------- ---------- ---------- ----------
Non-operating expense
(income):
Interest income (290 ) (161 ) (564 ) (224 )
Interest expense 373 584 747 1,183
Other expense (income),
net 5 134 19 (226 )
---------- ---------- ---------- ----------
Total non-operating
expense, net 88 557 202 733
---------- ---------- ---------- ----------
Net loss $ (1,046 ) $ (4,271 ) $ (1,617 ) $ (6,916 )
========== ========== ========== ==========
Basic and diluted net loss
per share $ (0.00 ) $ (0.02 ) $ (0.00 ) $ (0.03 )
========== ========== ========== ==========
Weighted average shares
used in computing basic
and diluted net loss per
share 338,447 276,371 338,324 259,912
========== ========== ========== ==========
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
June 30, Dec. 31,
2005 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 26,066 $ 33,823
Restricted cash 51 76
Short-term investments in marketable
securities 12,536 12,162
Accounts receivable, net of allowance of
$1,203 and $1,124, respectively 16,964 16,943
Inventory 317 345
Prepaid expenses and other assets 2,760 3,202
----------- -----------
Total current assets 58,694 66,551
Property and equipment, net of accumulated
depreciation of $144,811 and $138,000,
respectively 54,500 54,378
Investments 5,846 6,693
Intangible assets, net of accumulated
amortization of $17,811 and $17,522,
respectively 2,618 2,898
Goodwill 36,314 36,314
Deposits and other assets 1,428 1,315
----------- -----------
Total assets $ 159,400 $ 168,149
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, current portion $ 5,208 $ 6,483
Accounts payable 7,056 11,129
Accrued liabilities 6,570 7,269
Deferred revenue, current portion 1,862 1,826
Capital lease obligations, current portion 535 512
Restructuring liability, current portion 1,540 2,397
----------- -----------
Total current liabilities 22,771 29,616
Notes payable, less current portion 9,844 12,031
Deferred revenue, less current portion 458 421
Capital lease obligations, less current portion 533 806
Restructuring liability, less current portion 5,601 5,756
Deferred rent 7,077 5,781
Other liabilities 1,002 --
----------- -----------
Total liabilities 47,286 54,411
----------- -----------
Commitments and Contingencies
Stockholders' equity:
Common stock, $0.001 par value, 600,000
shares authorized; 339,096 and 338,148
shares issued and outstanding, respectively 339 338
Additional paid in capital 968,321 967,951
Accumulated deficit (856,765 ) (855,148 )
Accumulated items of other comprehensive
income 219 597
----------- -----------
Total stockholders' equity 112,114 113,738
----------- -----------
Total liabilities and stockholders'
equity $ 159,400 $ 168,149
=========== ===========
INTERNAP NETWORK SERVICES CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six months ended
June 30,
---------------------
2005 2004
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES (restated)
Net loss $(1,617 ) $(6,916 )
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 7,358 8,545
Provision for doubtful accounts 648 1,475
Loss from equity method investment 9 278
Non-cash interest expense on capital lease
obligations -- 677
Non-cash changes in deferred rent 1,296 473
Other, net (49 ) 87
Changes in operating assets and
liabilities:
Accounts receivable (669 ) (2,625 )
Inventory, prepaid expenses, deposits
and other assets 357 1,566
Accounts payable (4,440 ) 1,877
Accrued liabilities (698 ) (1,254 )
Deferred revenue 73 (1,644 )
Accrued restructuring charge (1,012 ) (1,472 )
---------- ----------
Net cash provided by operating activities 1,256 1,067
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (5,815 ) (2,216 )
Purchases of investments in marketable
securities (8,475 ) --
Proceeds from sales of investments in
marketable securities 8,806 --
Change in restricted cash 25 --
Other (243 ) 44
---------- ----------
Net cash used in investing activities (5,702 ) (2,172 )
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable (3,462 ) (1,695 )
Payments on capital lease obligations (250 ) (2,199 )
Proceeds from exercise of stock options and
warrants 371 4,364
Change in revolving credit facility -- (8,392 )
Proceeds from issuance of common stock -- 55,932
Other 30 --
---------- ----------
Net cash (used in) provided by financing
activities (3,311 ) 48,010
---------- ----------
Net (decrease) increase in cash and cash
equivalents (7,757 ) 46,905
Cash and cash equivalents at beginning of period 33,823 18,885
---------- ----------
Cash and cash equivalents at end of period $26,066 $65,790
========== ==========
INTERNAP NETWORK SERVICES CORPORATION
SELECTED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(in thousands)
For the Three Months Ended:
--------------------------------------
June 30, March 31, June 30,
2005 2005 2004
------------ ------------ ------------
(restated)
Revenue $ 37,571 $ 37,855 $ 35,999
------------ ------------ ------------
Direct cost of revenue,
excluding depreciation and
amortization 19,109 19,887 18,934
Selling, general and
administrative expense 15,558 14,929 16,980
Depreciation and amortization 3,862 3,496 3,799
------------ ------------ ------------
Loss from operations (958 ) (457 ) (3,714 )
------------ ------------ ------------
Non-operating expense, net 88 113 557
------------ ------------ ------------
Net loss $ (1,046 ) $ (570 ) $ (4,271 )
============ ============ ============
EBITDA reconciliation:
Net loss $ (1,046 ) $ (570 ) $ (4,271 )
Depreciation and amortization 3,862 3,496 3,799
Income taxes -- -- --
Interest expense, net 83 99 423
------------ ------------ ------------
EBITDA 2,899 3,025 (49 )
Interest expense, net (83 ) (99 ) (423 )
Provision for doubtful
accounts 285 363 795
Non-cash changes in deferred
rent 826 470 243
Other non-cash adjustments (9 ) (32 ) 254
Changes in operating assets
and liabilities:
Accounts receivable (647 ) (22 ) (1,941 )
Inventory, prepaid
expenses, deposits and
other assets 363 (6 ) 888
Accounts payable, accrued
liabilities, deferred
revenue and accrued
restructuring charges (677 ) (5,400 ) 141
------------ ------------ ------------
Net cash (used in) provided by
operating activities $ 2,957 $ (1,701 ) $ (92 )
============ ============ ============
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 is defined as net loss reduced for the provision for income taxes, net interest expense, and depreciation and amortization. EBITDA is not an indicator of financial performance under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and may not be comparable to similarly captioned information reported by other companies. In addition, it does not replace net loss, income (loss) from operations, or cash flows from operating activities as indicators of operating performance. The effect of taxes and interest on our net loss is not significant, but depreciation and amortization, primarily as a result of the capital-intensive Capital-intensive Used to describe industries that require large investments in capital assets to produce their goods, such as the automobile industry. These firms require large profit margins and/or low costs of borrowing to survive. nature of our operations and acquisitions, is significant. Management believes that measuring the performance of the business without regard to non-cash depreciation and amortization can make trends in operating results more readily apparent, and when considered with other information, assist investors and other users of our financial data who wish to evaluate our ability to generate future cash flows. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion