MegaPath Networks Announces 2004 Results; Key Appointments Named to Sustain Momentum in Wake of Strong Fiscal Year.

PLEASANTON, Calif. -- MegaPath Networks, a leading provider of secure access and managed network solutions, today announced record financial results for 2004. In addition, the company has realigned its organization into business units to take advantage of accelerating growth in MegaPath's newly defined enterprise and small and medium size business (SMB) market segments.

Revenue grew to $87 million, a 28 percent increase over 2003, and MegaPath was EBITDA positive for the full year of 2004. "We are especially pleased with our results as they were achieved while successfully integrating TManage, a managed services company acquired at the end of 2003," said Harry Taxin, chairman, president and chief executive officer of MegaPath Networks. In 2004, MegaPath entered into 50 agreements with enterprise accounts, (over 100 locations) and over 100 agreements with mid-market customers (25 to 99 locations). The company also grew its' managed endpoints by over 400 percent. MegaPath was recognized by Inc. 500 and the San Jose Business Times as one of the fastest growing private companies in 2004.

Focus on Customer Segments

"Managed network solutions have come of age and MegaPath Networks understands the need to evolve as the market expands," said Carey Balzer chief operating officer of MegaPath Networks. "To provide an increased level of focus on our customers, we are aligning our company along market segments," continued Balzer. "I am pleased to announce the appointments of Dan Foster to lead our Enterprise Market business unit and Eric Wick to lead the SMB business unit."

Dan Foster moves over from chief sales and marketing officer to become senior vice president and general manager of the Enterprise Market business unit. Mr. Foster joined MegaPath Networks in November of 2000 and began setting the corporate strategy to migrate from DSL to a multiple technology service aggregator model. He was also instrumental in moving the company into the retail and hospitality market segments, capturing multi-location retailers such as Radio Shack, Jenny Craig and Jamba Juice.

Eric Wick, as vice president and general manager of the SMB Market business unit, will deliver MegaPath's managed products and services in a format that can be easily managed by companies with limited IT resources. Mr. Wick brings to MegaPath over 10 years experience in sales and sales management in the data networking and enterprise software industries. Prior to joining MegaPath, he built a successful sales organization at SBC Internet Services that was responsible for launching its data hosting and business VPN services.

New Roles and Bench Strength for Continued Growth

Steve Guastella was named as senior vice president of network engineering and operations. Mr. Guastella joined MegaPath in 2003 through the acquisition of TManage. He has served as vice president of engineering and tech support. In this position he successfully managed a network infrastructure transformation and implemented programs which yielded a significant increase in customer satisfaction. In his new position he will head up all centralized operation functions for MegaPath. Mr. Guastella previously served as chief architect and vice president of data engineering for Vectris Communications, and director of network operations for TNS/PSINet Inc.

MegaPath has also appointed key Marketing and sales personnel to support the newly defined business units. Adding to MegaPath's bench strength is the newly appointed vice president of marketing, Jack Musgrove, who brings to MegaPath 25 years experience in marketing and strategic planning. Prior to MegaPath, Mr. Musgrove served as vice president of marketing for Captus Networks Corp. and director of marketing at Cisco Systems, Inc.

Also recently joining MegaPath is Michael Fair, as vice president of channel sales. Mr. Fair brings his extensive background in executive relationship management and strategic sales experience to MegaPath from a number of companies including Qwest Communications Inc., Sprint and Electronic Data Systems Corp. Mr. Fair founded and managed Qwest's strategic partner program during his five year tenure.

"As we continue to grow as a leader in managed network solutions it is important to evolve our management team and incorporate new perspectives for the future of MegaPath," said Balzer. "I know that Steve Guastella, Jack Musgove and Michael Fair will all contribute to enhancing our customer's experience and satisfaction," offered Balzer.

About MegaPath Networks

MegaPath Networks Inc. delivers secure access and managed network solutions that enable businesses to cost-effectively connect branch offices, storefronts, mobile workers and home-based workers to centralized corporate resources. By offering comprehensive managed access, VPN and security services, MegaPath is the single source of contact for the design, deployment, monitoring, reporting and support of remote connectivity solutions.

Having the broadest business-class footprint through its nationwide private network, MegaPath has deployed services to over 18,000 customers including small businesses and distributed enterprises ranging from large manufacturers, pharmaceutical companies, restaurant chains, retailers and financial institutions, to smaller insurance firms and real estate offices. MegaPath's passion for customer care and product excellence is reflected in its award-winning managed services and top industry- and user-rated technical support and sales professionals. Privately held and founded in 1999, MegaPath is headquartered in Pleasanton, CA.

For more information, visit the MegaPath Web site at www.megapath.net or call 1-877-MEGAPATH (634-2728). MegaPath Networks(R) is a registered service mark of MegaPath Networks Inc.