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PHOENIX NETWORK REPORTS FIRST-EVER $11 MILLION QUARTER: RECORD REVENUES INCREASE 60 PERCENT

 SAN FRANCISCO, Nov. 11 /PRNewswire/ -- Phoenix Network Inc. (AMEX: PHX) today announced record revenues of $11,116,000 for the third quarter ended Sept. 30, 1993.
 Revenues increased 60 percent to $11,116,000 from $6,950,000 in the third quarter of 1992. The company sustained a net loss of $490,000, or $0.06 per share after application of preferred dividends, versus a net gain of $25,000, or a loss of $0.01 per share after application of preferred dividends, in the same quarter a year ago. For the nine-month period ended Sept. 30, 1993 revenues grew 45 percent to $28,030,000 from $19,312,000 in the same period of 1992. This quarter's loss narrowed to approximately one-half that of last quarter's, and was attributable primarily to the continued investment of over $725,000 in the company's new marketing and sales channels, particularly its telemarketing program and direct sales offices.
 Chief Executive Officer Robert Curtis stated, "We are thoroughly pleased with the quarter's results. The record revenue growth represents not only a 60 percent increase over the same quarter of 1992, but also a 30 percent gain over last quarter, and was in line with our projections. The loss decreased significantly. SG&A as a percentage of revenue decreased from 37.1 percent in the second quarter of this year to 31.4 percent in the third quarter, and only 12.3 percent of the quarter's revenue gain went to additional expenses. The estimated monthly usage of new customers added during the third quarter exceeded the $1.5 million added in the prior quarter."
 "This quarter's strong results validate the past year's strategy of devoting resources to the expansion of our sales and marketing channels," Curtis continued. "In addition, as our record sales are translating into revenue, our losses have narrowed, and SG&A as a percentage of revenue is declining. We continue on track both for profitable operations, and for reaching our revenue goals of $40 million this year and $80 million in 1994.
 "Prior to this quarter, Phoenix's growth was constrained by a shortage of both equity and debt capital," Curtis said. "During the quarter, the company raised $3 million in equity and obtained a $7 million line of credit, both of which added to Phoenix's ability to grow."
 Also during the quarter, Phoenix completed the first phase of its expansion with the opening of two additional sales offices. The remainder of the year will be spent planning Phase II of the expansion, which will consist of opening 10-15 more sales offices in 1994. In addition, the Distributor Network continued to produce record volumes of new sales, as did the Office Depot private label program. The company continued several telemarketing programs, both of which are contributing significantly to revenue growth.
 San Francisco-based Phoenix Network is the nation's largest publicly- traded non facilities-based reseller of long distance telecommunication services. Phoenix purchases bulk long distance services, then provides these services to smaller users at rates up to 35 percent below the major carriers. Phoenix's many value-added products include flat-rate billing, conference calling, travel cards, 800 numbers, dedicated services and management reports tailored to specific customer needs. For two consecutive years, Inc. Magazine has ranked Phoenix Network as one of the 100 fastest-growing, small, public companies in the nation.
 PHOENIX NETWORK INC.
 SELECTED FINANCIAL DATA
 Three months ended Nine months ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Revenues $11,115,898 $6,950,132 $28,029,589 $19,311,807
 Cost of revenues 8,100,444 5,158,437 20,510,948 14,396,544
 Gross profit 3,015,454 1,791,695 7,518,641 4,915,263
 Selling, general and
 administrative
 expenses 3,486,851 1,768,737 9,160,116 4,879,550
 Income (loss) from
 operations (471,397) 22,958 (1,641,475) 35,713
 Other income
 (expense) (19,069) 2,353 (41,028) 3,040
 Net income (loss) (490,466) 25,311 (1,682,503) 38,753
 Preferred stock
 dividends (66,112) (69,979) (205,875) (203,950)
 Net loss attributable
 to common shares $(556,578) $(44,668) $(1,880,378) $(165,197)
 Net loss per common
 share and common
 share equivalents $(.06) $(.01) $(.21) $(.02)
 Weighted average
 number of shares
 outstanding 9,779,899 7,959,683 9,087,860 7,596,192
 -0- 11/11/93
 /CONTACT: Julie Reynolds, director of investor relations of Phoenix Network, 415-981-3000; or Robert Fuchs, executive vice president of Sunrise Financial Group, 212-421-1616/
 (PHX)


CO: Phoenix Network Inc. ST: California IN: TLS SU: ERN

PK-TM -- SF003 -- 3072 11/11/93 08:46 EST
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Date:Nov 11, 1993
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