07.29.2003
Company Press Release
Internap Reports Increased Revenues, Operating Margins; Reaffirms
Full Year Guidance
Revenue growth despite aggressive actions against spam offenders
ATLANTA, GEORGIA – July 29, 2003 – Internap Network Services
Corporation (NASDAQ: INAP), the leading provider of
performance-based routing services over the Internet, today reported
fiscal second quarter results for the period ended June 30, 2003.
Revenues totaled $34.2 million, an increase of 3.7% compared to the
second quarter 2002 and a slight increase over the preceding quarter.
During the second quarter, the company terminated a number of
customers engaged in spam practices that violated the company's
acceptable use policy, amounting to approximately $1.1 million in lost
annualized revenues. In addition, Internap terminated discussions with
a number of prospective customers engaged in spam practices and
tightened its customer screening procedures.
Revenue growth, coupled with a 22% reduction in operating expenses,
enabled the company to improve operating earnings performance by
60% year-over-year. The company reaffirmed its prior guidance of full
year revenue growth of 5% to 7% and reaching free cash flow by
year-end.
"Internap's solid second quarter performance keeps us on track to
achieve our stated goals this year," said Gregory A. Peters, Internap's
president and chief executive officer. "Our improved financial metrics
will allow us to take advantage of strategic opportunities as they arise."
Quarterly Highlights:
The installed base grew to 1,487 customers as of June 30,
2003, an increase of 98 net new enterprise customers in the
quarter. Among the new customers were: Accenture; Amgen;
Autobytel.com; Hicks, Muse, Tate & Furst; Instinet Europe; Idine
Rewards Network; Shutterfly, and Isuzu Motors America.
Direct margin improved to 45.5%, compared to 31.5% in the
second quarter 2002.
Annualized revenue per employee was $413,000 per employee,
up from $305,000 per employee in the second quarter 2002.
Operating expenses totaled $43.1 million, a decline of more
than $11.9 million, or 22%, compared to the second quarter
2002.
Internap's net loss was $10.0 million in the second quarter, or $0.06
per share, compared to a loss of $22.8 million, or $0.15 per share, in
the second quarter of 2002.
Net use of cash during the second quarter was $8.7 million, which
included $1.7 million in restructuring payments and a $2.2 million
non-recurring payment to Cisco Systems Capital as part of a
restructuring of certain equipment lease arrangements. Net cash used
in operating activities totaled $3.9 million.
"Internap's financial performance has steadily improved despite a
difficult operating environment," said Robert Jenks, Internap’s chief
financial officer. "Our continued revenue growth, improved cost structure
and increasing operating margins enhance our long-term outlook."
Conference Call Information:
Internap's second quarter teleconference will be held today beginning
at 5:00 p.m. Eastern. The dial-in numbers are 800-901-5241, passcode
55362753 for domestic callers, and 617-786-2963, passcode
55362753 for international participants. The simultaneous web cast will
be available from the investor relations section of the web site at:
www.internap.com.
Internap will provide a replay of the teleconference through Friday,
August 8, 2003. The replay number is 617-801-6888, passcode
29117672.
# # #
About Internap
Founded in 1996, Internap offers business customers enhanced
network services through a portfolio of Internet-based solutions that
utilize all major domestic IP backbones. The company's patented and
patent-pending route management technology and industry-leading
service level guarantees promise 100 percent Internet availability,
allowing customers to bypass congestion points and avoid other
difficulties that plague conventional Internet connectivity.
Internap currently serves more than 1,400 Fortune 500 and mid-tier
business customers in the financial services; travel/hospitality;
manufacturing; media/entertainment; technology and retail industries.
The company provides services in numerous key markets throughout
the United States, Europe and Japan including Atlanta, Boston,
Chicago, London, Los Angeles, New York, San Francisco, San Jose,
Seattle, Tokyo and Washington, D.C. For more information, please visit
www.internap.com.
Internap "Safe Harbor" Statement
The foregoing are "forward-looking statements" which are based on
management's beliefs as well as on a number of assumptions
concerning future events based on information currently available to
management. Readers are cautioned not to put undue reliance on
such forward-looking statements, which are not a guarantee of
performance and are subject to a number of uncertainties and other
factors, many of which are outside Internap's control, that could cause
actual results to differ materially from such statements. For a more
detailed description of the factors that could cause such a difference,
please see Internap's filings with the Securities and Exchange
Commission. Internap disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. This information is presented
solely to provide additional information to further understand Internap's
results.
Internap Network Services Corporation
Condensed Consolidated Balance Sheets
(in thousands)
June 30 |
