(BSNS WIRE) Data Return Corporation Announces 372% Increase in Second Qu
Data Return Corporation Announces 372% Increase in Second Quarter Revenue
Business Editors
DALLAS--(BUSINESS WIRE)--Nov. 22, 1999--Data Return Corporation
(Nasdaq: DRTN) today reported results for the second fiscal quarter
and six months ended September 30, 1999.
Total revenue for the second fiscal quarter of 2000 was $1.7
million, a 372% increase over $366,000 in the comparable quarter of
fiscal 1999, and a 41% increase from $1.2 million in the first fiscal
quarter of 2000.
Revenue from new clients accounted for more than 80% of total
revenue growth. New Data Return clients added during the second
quarter include Pier One Imports, Fossil, Executive Software
International, Sensormatic Electronics, Roseart, and Metabolife
International and others. Existing customers who expanded their
service relationships with the Company include First USA Bank, Berlitz
Languages and KPMG.
"Our revenue growth this quarter is a reflection of the
tremendous demand for high quality advanced hosting services for
mission critical Internet operations, and our ability to meet the
needs of the enterprise for managed services on the Microsoft
platform," said Sunny Vanderbeck, Chairman and Chief Executive
Officer. "We added more than 130 enterprise customers and "dot.com"
companies bringing our total customer base to almost 800. Based on our
client growth rate and our increasing visibility in the managed
hosting space, we more than doubled our staffing in the second quarter
to further enhance customer support and launch new managed hosting
services for Microsoft Exchange."
Second quarter EBITDA (Earnings before Interest, Taxes,
Depreciation and Amortization) was negative $1.7 million, or $0.06 per
share, as compared to negative $226,000, or $0.01 per share, in the
prior year period. The Company reported a net loss of $1.9 million, or
$0.07 per share in the quarter ended September 30, 1999, compared to a
loss of $337,000, or $0.02 per share, reported in the second fiscal
quarter of 1999.
On November 4, 1999, Data Return completed its initial public
offering of 6.25 million shares of common stock and the sale of an
additional 937,500 shares of its common stock in the exercise of the
underwriters' over-allotment option, at the public offering price of
$13.00 per share.
"Each of our strategic partners, Microsoft, Compaq Computer, and
Level 3 Communications, made significant financial investments in the
Company through purchases of the Company's common stock totaling $13
million," Mr. Vanderbeck said. "This demonstrates that these leading
providers of software, server hardware, and IP networking services
share our confidence in Data Return's business model and market
opportunity. We are pleased to count these companies not only as our
partners, but also as our shareholders."
Data Return's strategic partnerships with Microsoft, Compaq, and
Level 3 provide Data Return with a leveraged business model that
creates competitive advantage in each of the following areas:
-- Extensive Data Center and Network Infrastructure. Through its
alliance with Level 3, the Company is provided with access to
Level 3's global IP network and over 25 existing Level 3 gateways
in the U.S. with significant planned expansion over the next 24
months. Data Return is also partnering with Level 3's sales force
to generate new business opportunities.
-- Joint Development with Microsoft Corporation. The Microsoft
investment was based in part upon Data Return's development of
installation tools for Microsoft Application Service Providers
and Microsoft customers. This partnership will provide both Data
Return and Microsoft better access to expertise from both
companies in the large scale deployment and management of
Microsoft BackOffice products in a hosted environment. Data
Return's sole focus on the Microsoft Platform allows Data Return
to provide customers more expertise in deploying and managing
scalable, high-performance and high-availability hosted
applications.
-- Closer Involvement in Compaq Server Technology. Through Data
Return's agreement with Compaq, Data Return has gained direct
access to product development engineers and marketing management
at Compaq. Compaq is the leading provider of server hardware for
enterprise customers, and many of these enterprise customers have
yet to outsource hosting services.
For the six months ended September 30, 1999, total revenue was
$3.0 million, an increase of 357% over $647,000 for the same period
last year. The net loss for the six-month period was $2.6 million, or
a $0.10 loss per share.
Data Return will conduct a conference call on Tuesday, November
23, at 9:00 a.m. EST. To participate in the conference call, please
dial 1-800-633-8494. If you are unable to participate in the
conference call a replay will be made available. To access the replay,
please dial 1-800-633-8284 and enter the passcode "13569993" from
approximately two hours after the call until 11:59 p.m. EST on
November 30, 1999. The conference call will also be accessible on Data
Return's web site at www.DataReturn.com.
About Data Return Corporation
Data Return Corporation is a leading provider of advanced
Internet hosting services based on Microsoft technologies. The
Company's advanced managed services include the hardware, software and
network infrastructure and systems management expertise to implement
and support high-end web-based applications. Data Return focuses on
sophisticated enterprise customers and mature "dot.com" companies that
deploy e-commerce and business-critical web sites, through which they
can effectively conduct transactions and manage information over the
Internet. Through its key partnerships, Data Return leverages a highly
scalable deployment architecture and utilizes state-of-the-art data
centers to cost-effectively manage its customers' web sites. More
information is available by visiting the Company's web site at
www.DataReturn.com.
This press release contains forward-looking statements, including
statements related to expected financial results and other planned
events. Actual results may differ materially due to a number of risks,
including changes in external competitive market factors, changes in
or an inability to execute Data Return's business strategy,
unanticipated changes in the hosting industry, the economy in general
and changes in the use of the Internet. Data Return cannot guarantee
future results, levels of activity, performance or achievements. The
matters discussed in this press release also involve risks and
uncertainties summarized under the heading "Risk Factors" in Data
Return's Prospectus dated October 27, 1999 and are updated from time
to time through the filing of reports and registration statements with
the Securities and Exchange Commission. Data Return does not assume
any obligation to update the forward-looking information contained in
this press release.
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DATA RETURN CORPORATION
STATEMENT OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues $1,725,600 $365,700 $2,953,100 $646,500
Costs and expenses:
Cost of revenue 1,281,600 242,800 1,771,100 447,700
Marketing and sales 1,067,200 165,100 1,451,700 270,200
General and
administrative 1,223,900 211,200 2,089,500 424,400
Stock based compensation 157,700 85,800 297,200 170,400
Total costs and expenses 3,730,400 704,900 5,609,500 1,312,700
Loss from operations (2,004,800) (339,200) (2,656,400) (666,200)
Other income (expense):
Interest income 88,600 5,400 111,500 11,600
Interest expense (5,500) (2,700) (11,600) (3,800)
Net Loss $(1,921,700) $(336,500) $(2,556,500) $(658,400)
========== ======== ========= ========
Net loss per common share:
Basic and diluted $(0.07) $(0.02) $(0.10) $(0.04)
====== ====== ====== ======
Shares used in computing
basic and diluted
net loss per share 26,537,493 17,592,600 24,427,167 17,592,600
========== ========== ========== ==========
Other Financial Data:
EBITDA (1) $(1,667,300) $(225,800) $(2,090,100) $(454,100)
(1) EBITDA consists of loss from operations plus depreciation and
amortization, including amortization of unearned stock based
compensation. EBITDA does not represent funds available for
management's discretionary use and is not intended to represent
cash flow from operations as measured under generally accepted
accounting principles. EBITDA should not be considered as an
alternative to net loss or net cash used in operating activities,
but may be useful to investors as an indication of operating
performance. Our calculations of EBITDA may not be consistent
with calculations of EBITDA used by other companies.
DATA RETURN CORPORATION
BALANCE SHEET
(unaudited)
September 30, March 31,
1999 1999
Assets
Current assets:
Cash $6,700,200 $842,800
Restricted cash - 125,000
Accounts receivable, net of allowance
for doubtful accounts of $20,100
and $154,400 at March 31, 1999 and
September 30, 1999, respectively 1,128,300 368,400
Prepaid and other 155,200 28,200
Total current assets 7,983,700 1,364,400
Property and equipment, net 4,327,800 826,000
Other assets 574,400 23,300
Total assets $12,885,900 $2,213,700
=========== ==========
Liabilities and shareholders'
equity Current liabilities:
Accounts payable $2,837,400 $288,900
Accrued expenses 1,091,700 132,900
Deferred revenue 677,100 286,100
Notes payable and capital
lease obligations 159,500 95,200
Total current liabilities 4,765,700 803,100
Notes payable and capital
lease obligations 260,000 166,000
Commitments and contingencies - -
Total Liabilities 5,025,700 969,100
Shareholders' equity:
Preferred stock, $.001 par value;
20,000,000 shares authorized,
none issued or outstanding - -
Common stock, $.001 par value;
100,000,000 shares authorized;
20,551,600 and 27,755,958 issued
and outstanding at March 31, 1999
and September 30, 1999 respectively 27,800 20,600
Additional paid-in capital 13,635,000 3,893,100
Deferred stock compensation (1,771,900) (1,194,900)
Accumulated deficit (4,030,700) (1,474,200)
Total shareholders' equity 7,860,200 1,244,600
Total liabilities and
shareholders' equity $12,885,900 $2,213,700
=========== =========
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--30--rc/ny*
CONTACT: Data Return Corporation
Stuart Walker
Chief Financial Officer
972-869-0770
or
Michele Katz/Connie Bienfait/
Kristen Kopay
Press: Rob Ingram
Morgen-Walke Associates, Inc.
212-850-5600
KEYWORD: TEXAS
INDUSTRY KEYWORD: INTERNET E-COMMERCE NETWORKING HARDWARE
SOFTWARE CONFERENCE CALLS EARNINGS
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