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VRIO <earnings>
Headline: Verio Inc. Announces Record First Quarter 1999 Results
======================================================================
Revenue Growth and Integration Progress Combine
to Drive Results Ahead of Expectations
Multiple New Product Launches and AOL Agreement
Lay Foundation for Future Growth
Recent Highlights:
-- A three-year exclusive agreement with AOL to market Verio's business
Web hosting and e-commerce products on AOL's leading U.S. sites
-- Adoption of Netscape's messaging platform
-- Expansion of the Qwest agreement to $160mm and reduced per unit costs
-- $10mm investment in NorthPoint Communications; launching of DSL
services in 21 cities in 1999
-- Announcement of domestic and international e-commerce solutions with
iMall, First Data Merchant Services and CyberSource
-- Designation by ICANN to be an official domain-name registrar
ENGLEWOOD, Colo., April 27 /PRNewswire/ -- Verio Inc. (NASDAQ:VRIO), the
world's largest domain-based Web hosting company and a leading provider of
comprehensive business Internet services, today announced that revenue for the
quarter ended March 31, 1999 was $55.1 million, an increase of 160% from the
same period in the prior year, and 49% from the fourth quarter. Approximately
49% of total revenues were attributed to Web hosting and other enhanced
services. Net loss attributable to common shareholders for the quarter ended
March 31, 1999 was $45.1 million, or ($1.24) per share, compared with
$28.4 million or ($22.44) per share for the quarter ended March 31, 1998.
"During the first quarter Verio once again demonstrated its ability to
grow internally, and at the same time make significant strategic advances,"
commented Chief Executive Officer Justin L. Jaschke. "AOL's decision to
exclusively promote Verio's business Web-hosting platform and e-commerce
products on its industry-leading U.S. sites to its 18 million customers
confirms that Verio leads the world in Web hosting. ICANN has echoed this
vote of confidence by designating Verio as an official registrar of domain
names. We have also expanded the quality and breadth of our product offerings
with the addition of DSL services, the Netscape messaging platform, and new,
fully integrated e-commerce offerings with iMall, a leader in e-commerce
software, First Data Merchant Services, a leading national provider of
merchant accounts, and CyberSource, a leading supplier of international
transaction processing solutions."
Gross margin improved from 57% of revenue in the quarter ended
December 31, 1998 to 65% of revenue in the current quarter due in part to the
increase in high margin Web-hosting revenue from the Hiway acquisition.
Excluding the effects of the Hiway acquisition, gross margins improved 2% from
the fourth quarter as efficiencies from Verio's Tier 1 national network and
regional networks were realized. Contributing to the improvement, Verio now
has approximately 12,000 miles of Qwest circuits, up from 10,000 miles at
year-end. At the regional network level, consolidation of redundant POPs
continued, as 13 additional POPs were closed during the quarter, bringing the
current total to 193.
Operating expenses, excluding depreciation and amortization, continued
their significant decline as a percentage of revenue, improving from 91% of
revenues in the quarter ended December 31, 1998 to 79% of revenues in the
current quarter. Finance, general and administrative expenses showed the
sharpest decline, as revenue increased without commensurate increases in the
costs of management, billing, and financial systems. These improvements were
made possible by significant progress in the consolidation of numerous
acquisitions onto standardized national systems, including Kenan billing,
PeopleSoft accounting and Vantive customer care. Of all operations acquired
through year-end 1998, more than 80% are on the national systems, up from
71% at year-end.
"As we move into the final stages of completing the integration of our
past acquisitions, our operational focus is shifting to expanding our product
offering, increasing internal growth, and taking advantage of the tremendous
efficiencies we have designed into our business," said Herbert R. Hribar,
president and chief operating officer. "In the first quarter we saw sales of
virtual private networks double, we sold more than 1,300 e-commerce packages,
and in the San Francisco and Chicago markets alone we sold more than 700 DSL
lines. We expect to accelerate our growth in the balance of 1999 as we begin
operations under the AOL agreement, launch DSL in additional cities, commence
our agreement with WatchGuard for managed security products, and begin selling
newer and easier to use e-commerce products. All of these are scheduled for
the second quarter, with numerous other product launches planned throughout
the year."
About Verio Inc.
Verio Inc. is the world's largest domain-based (e.g. yourcompany.com)
Web-hosting company and a leading provider of business Internet services.
With an emphasis on serving the small and mid-sized business market, the
company offers customers the critical services they need to compete in the new
world of business: high-speed Internet access, Web site hosting, electronic
commerce, virtual private networks, and other enhanced services. Verio
supports its operations with a highly reliable and scalable national
infrastructure including a tier one national network and delivers locally
based sales and engineering support in 41 of the top 50 U.S. markets. The
company also provides Web-hosting services to customers in more than
170 countries and operates an international network of more than
4,000 resellers.
For more information on Verio, visit the company's Web site at
www.verio.com. The corporate headquarters are located in Englewood, Colorado
at 8005 S. Chester St., Suite 200, 80112, phone number 303-645-1900.
Except for the historical information contained herein, certain matters
set forth in this press release concerning Verio are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
are subject to risks and uncertainties, including but not limited to
fluctuations in operating results, additional capital requirements,
competition and integration of acquisitions and implementation of network
infrastructure. Readers are also encouraged to refer to Verio's reports from
time to time filed with the Securities and Exchange Commission, including the
Company's Current Annual Report on Form 10-K filed on March 31, 1999, for a
further discussion of Verio's business and risk factors that may affect
operating and financial results.
Verio Inc.
Summary Consolidated Financial Data
(amounts in millions, except per share amounts)
3 Months Ended 3 Months Ended
3/31/98 3/31/99
(unaudited) (unaudited)
Statement of Operations Data:
Revenue
Dedicated $9.9 $21.5
Dial-up 4.1 6.6
Enhanced services and other 7.2 27.0
Total revenue 21.2 55.1
Costs of goods sold 9.5 19.4
Selling, general and administrative 20.0 43.6
Total costs and expenses 35.9 84.6
Loss from operations (14.7) (29.5)
Net loss attributable
to common stockholders $(28.4) $(45.1)
Loss per common share -
basic and diluted $(22.44) $(1.24)
Weighted average common shares
outstanding - basic and diluted 1.3 36.4
Other Data:
EBITDA (a) $(8.3) $(7.9)
Cash flow from operations (14.8) (2.0)
Capital expenditures 5.5 14.8
12/31/98 3/31/99
(unaudited)
Balance Sheet Data:
Cash, cash equivalents and
short-term investments $577.4 $338.6
Restricted cash and securities 14.8 15.4
Goodwill, net 236.7 480.6
Total assets 933.7 1,025.4
Long-term debt and capital lease
obligations, net of current portion 674.6 690.3
Stockholders' equity 202.7 229.7
(a) EBITDA represents earnings (loss) from operations before interest,
taxes, depreciation, amortization and provision for loss on write-offs of
investments in ISPs and fixed assets. The primary measure of operating
performance is net earnings (loss). Although EBITDA is a measure
commonly used in the Company's industry, it should not be construed as an
alternative to net earnings (loss), determined in accordance with
generally accepted accounting principles ("GAAP"), as an indicator of
operating performance or as an alternative to cash flows from operating
activities, determined in accordance with GAAP. In addition, the measure
of EBITDA presented herein by the Company may not be comparable to other
similarly titled measures of other companies.
SOURCE Verio Inc.
-0- 04/27/99
/CONTACT: Media: Matt Bell, 303-645-1961, mbell@verio.net, or Investors:
Whitney Fogt, 303-645-1921, investors@verio.net, both of Verio Inc./
/Web site: newsroom.verio.net
/Web site: investors.verio.net
/Web site: verio.com |
