INIT earnings are out, expectations were for .47 or .46 loss so they are in far better than that. One to keep an eye on.
INTERLIANT ANNOUNCES THIRD QUARTER 1999 FINANCIAL RESULTS
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Leading Application Service Provider Announces Quarterly Revenues of $12 Million
Business Editors
PURCHASE, N.Y.--(BUSINESS WIRE)--Oct. 28, 1999--Interliant, Inc. (NASDAQ:INIT), a leading Application Service Provider ("ASP") today reported revenues of $12.0 million for the third quarter of 1999.
This compares with $1.7 million for the third quarter of 1998 and $10.6 million in the second quarter of 1999. Revenues for the first nine months of 1999 were $28.1 million compared with $2.6 million for the first nine months of 1998.
Third quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was negative $8.2 million, EBITA (Earnings Before Interest, Taxes and Amortization) was negative $10.2 million and the net loss was $15.7 million or $0.37 per share. EBITDA and EBITA for the nine months ended September 30, 1999 were negative $18.9 million and $23.1 million, respectively, compared to negative $3.8 million and $4.2 million, respectively, for the prior year. The net loss for the nine months was $37.5 million or $1.13 per share compared to a net loss of $5.3 million or $0.84 per share for the same period in 1998.
James M. Lidestri, president, commented: "We are very excited about our financial results and the initiatives announced during the past quarter. In addition to the increase in our revenues for the three and nine month periods ended September 30, 1999, we signed strategic partnering agreements with Network Solutions, Inc., Cardservice International and Whittman-Hart, extending our potential customer service base. Additionally, we announced new service offerings, including our e-Reach(TM) product offering and Microsoft-based technology capabilities. With these alliances and new offerings, we believe we will extend our leadership position and generate substantial growth in future periods."
Bradley Feld, co-chairman commented: "Interliant is one of the largest Application Service Providers ("ASP") in the market. For the past two years we have assembled a broad and deep range of solutions including Web hosting, groupware hosting, customer relationship management, electronic commerce and distributed learning. During the third quarter, we acquired companies that expand our reach and our capabilities in the marketplace. In August, we acquired the operations of The Daily-e Corporation which added significant business process re-engineering skills and Microsoft technology capabilities. In September, we acquired Sales Technology Ltd., a leading U.K.-based systems integrator of Customer Relationship Management ("CRM") and Microsoft Exchange groupware solutions."
On October 26, 1999, Interliant and IBM announced an alliance to deliver application hosting and outsourcing service solutions that combine IBM hardware and software with Interliant hosting services. These solutions will be brought to market through IBM's and Interliant's direct sales forces and business partner channels. Mr. Lidestri noted: "With increasingly limited IT staff resources, organizations of all sizes are looking for a quick, easy and dependable way to deploy their e-business solutions. This alliance with IBM combines the best of IBM's technology and Interliant's hosting services and allows customers to realize the value of our hosted e-business solution offerings much more rapidly than as internally deployed solutions."
About Interliant, Inc.
Interliant, Inc. (www.interliant.com), is a leading Application Service Provider (ASP), offering Web site hosting, application hosting and enhanced Internet services. Our services enable customers of all sizes to capitalize on the latest Web-based technologies quickly and cost-effectively by relieving them of the burdens associated with building, managing and maintaining the infrastructure required to support mission-critical applications. By offering a comprehensive suite of hosting and IT consulting services, we are able to meet the needs of any size business and to grow with our customers. Interliant currently has operations in the U.S. and U.K. and three primary state of the art data centers located in Atlanta, Houston and the Washington D.C. area. The Company's corporate headquarters are located in Purchase, New York. The lead investors in Interliant are Charterhouse Group International and SOFTBANK Venture Capital, a subsidiary of SOFTBANK Corp.
Forward Looking Statements and Associated Risks
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Certain forward-looking statements relate to, among other things, future results of operations, profitability, growth plans, sales, expense trends, capital requirements and general industry and business conditions applicable to our business. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. The words "anticipate," "believe," "estimate" and similar expressions used herein are generally intended to identify forward-looking statements. In addition to the other risks described elsewhere in this press release, our Quarterly Report on Form 10-Q for the period ended June 30, 1999, our Registration Statement on Form S-1 filed on March 15, 1999, as amended, and in our other filings with the Securities Exchange Commission, important factors to consider in evaluating such forward-looking statements include but are not limited to: changes in external competitive market factors; changes in our business strategy; an inability to execute our strategy due to unanticipated changes in the emerging hosting and Internet services industries or the economy in general; difficulties in the timely expansion of our network and data centers or in the acquisition and integration of new businesses; difficulties in retaining and attracting employees or new customers; difficulties in developing or deploying new services; risks associated with rapidly changing technology, including but not limited to Year 2000 compliance, and various other competitive factors that may prevent us from competing successfully in existing or future markets. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained herein will in fact be realized and we assume no obligation to update this information.
Interliant is a registered trademark of Interliant, Inc. All rights reserved.
For Investor Relations Contact: investor_relations@interliant.com -0- *T
INTERLIANT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Service revenues $12,030,164 $ 1,733,394 $ 28,110,067 $ 2,591,198
Costs and expenses:
Cost of service revenues 6,532,726 951,112 15,871,868 1,461,945
Sales and marketing 5,224,106 886,152 11,193,242 1,419,876
General and administrative 8,454,096 1,821,780 19,956,063 3,534,734
Depreciation 2,058,494 259,665 4,157,420 333,252
Amortization of intangibles 6,055,064 876,854 14,841,358 1,250,733 --------------------------------------------------
28,324,486 4,795,563 66,019,951 8,000,540
Operating loss (16,294,322) (3,062,169) (37,909,884) (5,409,342)
Interest income (expense), net 536,377 48,643 423,861 92,245
Other income (expense) 96,308 0 (15,880) 0
Net loss $(15,661,637) $(3,013,526) $(37,501,903) $(5,317,097)
Net loss per share - basic and diluted $ (0.37) $ (0.28) $ (1.13) $ (0.84)
Weighted average shares outstanding -basic and diluted 42,552,296 10,586,601 33,097,059 6,322,407
See accompanying notes to condensed consolidated financial statements.
INTERLIANT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1999 1998 (unaudited) Assets Note 2 Current assets: Cash and cash equivalents $ 52,614,768 $ 6,813,360 Cash-restricted 1,259,122 0
Accounts receivable, net of allowance of $1,166,690 and $320,000 at September 30, 1999 and December 31, 1998, respectively 6,033,334 806,322
Prepaid and other current assets 2,271,395 639,662
Total current assets 62,178,619 8,259,344
Furniture, fixtures and equipment, net 15,296,477 5,103,123
Intangibles, net 75,299,085 12,612,228 Other assets 1,200,801 222,172
Total assets $ 153,974,982 $ 26,196,867
Liabilities and stockholders' equity Current liabilities:
Notes payable and current portion of long-term debt $ 591,952 $ 0
Accounts payable 3,875,553 787,412 Accrued expenses 5,843,949 2,301,507 Deferred revenue 4,683,841 1,414,969 Current liabilities: 14,995,295 4,503,888
Long-term debt, less current portion 1,663,834 0
Stockholders' equity: Preferred stock, $.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding Common stock, $.01 par value; 200,000,000 and 100,000,000 shares authorized; 43,627,658, and 19,217,197 shares issued and outstanding, respectively 436,277 192,172
Additional paid-in capital 185,249,256 34,160,334 Deferred compensation (66,741) (1,769,429)
Foreign currency translation adjustments 89,062 0
Accumulated deficit (48,392,001) (10,890,098)
Total stockholders' equity 137,315,853 21,692,979
Total liabilities and
stockholders' equity $ 153,974,982 $ 26,196,867
See accompanying notes to condensed consolidated financial statements.
INTERLIANT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended Nine Months Ended
September 30, September 30,
1999 1998 Operating activities Net loss $ (37,501,903) $ (5,317,097)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for uncollectible accounts 1,055,545 112,500 Depreciation and amortization 18,998,778 1,583,985
Amortization of deferred compensation 1,702,688 265,260
Other non-cash charges 189,062 0
Changes in operating assets and liabilities:
Accounts receivable (1,250,048) (673,501)
Prepaid expenses and other current assets (1,143,250) (554,411)
Other assets (12,540) 0 Accounts payable 168,384 549,624 Accrued expenses 1,693,365 526,484 Deferred revenue 698,113 (129,236)
Net cash used in operating activities (15,401,806) (3,636,392)
Investing activities
Purchases of furniture, fixtures and equipment (7,894,496) (2,494,495)
Payments issued in connection with non-compete agreements (1,000,000) 0
Investments in restricted securities (952,969) 0 Transfers to restricted cash (1,259,122) 0
Acquisitions of businesses, net of cash acquired (20,499,664) (12,786,454)
Net cash used in investing activities (31,606,251) (15,280,949)
Financing activities Proceeds from sale of common stock 91,500,000 22,540,000
Proceeds from issuance of Series A redeemable convertible preferred stock 13,000,000 0
Proceeds from exercise of options and warrants 5,196,032 0
Proceeds from capital lease financing 1,277,255 0
Repayment of debt (10,965,826) 0 Offering costs (7,197,996) 0
Net cash provided by financing activities 92,809,465 22,540,000
Effect of exchange rate changes on cash - -
Net increase (decrease) in cash and cash equivalents 45,801,408 3,622,659
Cash and cash equivalents at beginning of period 6,813,360 912,085
Cash and cash equivalents at end of period $ 52,614,768 $ 4,534,744
Supplemental Disclosures of Noncash Investing and Financing Activities
Stock issued and options granted for acquisitions $ 49,609,991 $ 3,310,201
Stock issued for compensation agreements $ 0 $ 2,605,500
Debt assumed or issued in acquisitions $ 17,449,357 $ 0 *T |
