Record Quarterly and Yearly Revenues, Strong Product Launches
Attributed to National Expansion, Business and Acquisition Strategy
DENVER, March 30 /PRNewswire/ -- Reflecting its aggressive strategic
business and growth efforts, RMI.NET, Inc. (Nasdaq: RMII), a national
e-commerce and connectivity company, today reported record annual revenues of
$30.12 million for 1999, tripling its 1998 revenues of $10.09 million.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990628/RMILOGO )
RMI.NET's customer base more than tripled in 1999, surpassing 100,000
during the fourth quarter of 1999, up from the 31,000 at the end of 1998.
"In 1999, RMI.NET transitioned itself from a regional Internet service
provider (ISP) and firmly established itself as a national provider in the
e-commerce, web solutions and connectivity sectors of the Internet industry,"
said Douglas H. Hanson, chairman and chief executive officer for RMI.NET.
"Our revenue growth, our business plan focusing on an aggressive acquisition
strategy and national expansion, and our introduction of value-added products
and services clearly have positioned the company as a premier e-business and
Internet services provider for small and medium-sized businesses."
Hanson noted five initiatives that RMI.NET successfully implemented during
1999, which will continue to be a part of the focus of the company's efforts
in 2000. These initiatives included:
-- A shift in the company's strategic business focus. During 1999,
RMI.NET successfully moved its focus from an ISP to a commerce
solutions provider (CSP), with a heavy emphasis on business-to-business
and business-to-consumer commerce solutions;
-- An expansion of the company's geographic footprint through aggressive
and strategic acquisitions. RMI.NET acquired 16 companies in 1999,
following six acquisitions in 1998 and one recently announced
acquisition in 2000. The company also now boasts 12 national data
centers, eight of which include co-location facilities;
-- A significant increase in revenue growth. RMI.NET's revenue tripled
during the year;
-- RMI.NET's intent to be EBITDA neutral by the end of 2000; and
-- Introduction of significant new products and services for consumers.
RMI.NET announced the launch of its WarpWire(TM) digital subscriber
line (DSL) service; its Assemble!(TM) vertical portal and commerce
community suite; and its entry-level, e-SELL(R) store front e-commerce
package, developed through a partnership with NetObjects, Inc.
(Nasdaq: NETO).
Fourth quarter revenues increased by 159 percent for 1999 to
$9.34 million, when compared with fourth quarter revenues of $3.6 million in
1998. Revenues for the fourth quarter of 1999 also were the highest quarterly
revenues ever posted by the company, surpassing the third quarter of 1999,
when revenues reached $9.13 million.
RMI.NET reported an EBITDA(1) loss per share of $1.14 for 1999, compared
with a loss of $1.13 per share for the 1998, inclusive of unsuccessful merger
related charges in 1998. RMI.NET reported an EBITDA loss per share of
$0.42 for the fourth quarter of 1999, compared with a loss of $0.27 for the
fourth quarter of 1998.
On an earnings per share basis, both basic and diluted losses for the
12 months ended December 1999 were $1.83, compared with $1.39 for the same
period in 1998. Basic and diluted losses per share for the three months ended
December 1999 were $0.63, compared with $0.37 for the same period in 1998.
Continuing Initiatives for 2000
With the impending $28 million acquisition of Internet Communications
Corp. (Nasdaq: INCC) announced on March 20, 2000, RMI.NET gains a significant
base of additional business customers to further develop and expand its
enhanced product offering. It also gains additional revenue on an annualized
run rate of $22 million. INCC highlights RMI.NET's acquisition strategy for
2000, which is to focus on companies with annualized revenues of $20 million
or more, and on companies providing products and services to business
customers. The transaction is expected to be completed in second quarter of
2000.
RMI.NET's development of proprietary business-to-business e-commerce
software is the focus of this year's efforts, with announcements expected
later this year. RMI.NET also has engaged its sales force toward more
immediate revenue through generating dedicated access connectivity and
customized web development.
RMI.NET expects significant results in these areas in the first quarter of
2000 and is committed to its objective of reaching EBITDA neutrality by the
end of the year.
Recent Events
RMI.NET also noted a number of other recent events during the first
quarter of 2000 that will significantly contribute to the company's continuing
success, including:
-- The acquisition of ServerCom, Inc., a central Illinois-based provider
of web hosting and dedicated access services for small and medium-sized
businesses;
-- The launch of the "first-to-market" solution that allows consumers to
control the content of information they receive from Internet
advertisers, marketers, content providers and other companies utilizing
e-commerce capabilities, through an agreement with Broomfield,
Colo.-based PrivaSeek Inc.; and
-- Continued success in securing contracts through the federal E-rate
program, which provides subsidies for telecommunications and Internet
services to schools, libraries, rural health care providers, low-income
neighborhoods and remote communities. RMI.NET has secured more than
$4.5 million in multiyear contracts.
Fourth Quarter Milestones
Other fourth quarter financial and operational milestones for RMI.NET
included:
-- A $10 million equity investment in the company by two institutional
holders;
-- An agreement with Enron Communications, a wholly owned subsidiary of
the Enron Corp. (NYSE: ENE) to offer broadband Internet access,
television-quality streaming video and video conferencing, separate
from the public Internet;
-- Recognition in Forbes ASAP as the nation's 70th fastest-growing
technology company in the most recent ranking of the Deloitte & Touche
"Fast 500" Program. RMI.NET also was recognized as the fifth-fastest
growing company in Colorado;
-- The acquisition of the Internet web-related assets of AIS Network
Corp., based in Chicago; NetWorld.com, a wholly owned subsidiary of
FutureOne, Inc., based in Phoenix; and Western Regional Networks, Inc.,
which operates in Fort Collins, Colo. and La Junta, Colo.; and
-- Billing system, customer service, financial applications, management
system and acquisition integration upgrades with a number of companies,
including Oracle Corp., Novazen, Inc., Portal Software, Inc.,
Consortia, Clarify, Inc. and Vitria Technology, Inc.
Other 1999 Highlights
Other notable highlights for RMI.NET in 1999 included:
-- An additional investment in the company of $7.5 million by Hanson. In
addition, the company raised an additional $5.8 million from the
exercise of publicly traded and private placement warrants;
-- The change in the company's name to RMI.NET, Inc., from Rocky Mountain
Internet, Inc. In a related move, the company reorganized its regional
operations to the Southwest, Northwest, Rocky Mountain, Midwest and
Great Lakes regions;
-- Listing on the Nasdaq National Market in March 1999;
-- The successful launch and completion of a national advertising campaign
to increase awareness about RMI.NET products and services, and to
further establish RMI.NET as a leading e-commerce and connectivity
company; and
-- A relocation of its corporate headquarters in downtown Denver.
Other 1999 Financial Results
Revenues from each of the company's primary service offerings posted
strong year-over-year gains. Communications Services revenue for 1999 was
$25.86 million, up 224 percent from the $7.97 million reported in 1998. Web
Solutions revenue increased to $4.26 million in 1999, up 102 percent from the
$2.11 million reported in 1998.
RMI.NET's market capitalization now stands at more than $206 million,
based on approximately 21.1 million shares currently outstanding and the
closing market price on March 29, 2000 of $9.75 per share. RMI.NET's market
capitalization at the end of 1998 was $118 million (9.38 million shares at
$12.625 per share).
About RMI.NET
Denver-based RMI.NET, Inc., formerly Rocky Mountain Internet, is a
national e-commerce and connectivity company focusing on solutions for small
and medium-sized businesses. The company specializes in e-business
applications; web solutions, including design, hosting and marketing; and
high-speed Internet access, including digital subscriber line (DSL). RMI.NET
has an annualized revenue run rate of more than $50 million and more than
100,000 nationwide customers. The company wholly owns a proprietary portal
site and search engine, Infohiway, at http://www.infohiway.com. For more
information, call (800) 864-4327, or visit RMI.NET's web site at http://www.rmi.net.
(1) EBITDA represents earnings before interest expense, taxes,
depreciation and amortization. EBITDA is not a measurement of financial
performance under generally accepted accounting principles and should not be
considered as an alternative to the net income measure of performance.
OPERATING RESULTS
12 Months Ended Dec. 31
1999 1998
Revenue
Communication Services $25,864,000 $7,974,000
Web Solutions 4,258,000 2,113,000
Total 30,122,000 10,087,000
Cost of Revenue Earned
Communication Services 16,518,000 3,471,000
Web Solutions 1,298,000 51,000
Total 17,816,000 3,522,000
Gross Margin 12,306,000 6,565,000
41% 65%
Selling expenses 6,005,000 2,054,000
General and administrative 21,995,000 7,130,000
Costs/Unsuccessful -- 6,071,000
Dep. and Amort 8,852,000 1,789,000
Operating Loss (24,546,000) (10,479,000)
Other Income (Expense) (382,000) (191,000)
Net Loss (24,928,000) (10,670,000)
Preferred Stock Div 207,000 33,000
Net loss applicable to (25,135,000) (10,703,000)
common stockholders
Basic & diluted loss per
common share $(1.83) $(1.39)
EBITDA (15,708,000) (8,612,000)
OPERATING RESULTS
3 Months Ended Dec. 31
4Q 1999 4Q 1998
Revenue
Communication Services $8,323,000 $2,797,000
Web Solutions 1,017,000 784,000
Total 9,340,000 3,581,000
Cost of Revenue Earned
Communication Services 6,548,000 1,397,000
Web Solutions 425,000 19,000
Total 6,973,000 1,416,000
Gross Margin 2,367,000 2,165,000
25% 60%
Selling expenses 2,280,000 --
General and administrative 8,165,000 3,234,000
Costs/Unsuccessful -- 1,522,000
Depr and Amort 3,972,000 757,000
Operating Loss (12,050,000) (3,348,000)
Other Income (Expense) (191,000) (23,000)
Net Loss (12,241,000) (3,371,000)
Preferred Stock Div -- --
Net loss applicable to (12,241,000) (3,371,000)
common stockholders
Basic & diluted loss per
common share $(0.63) $(0.37)
EBITDA (8,171,000) (2,527,000)
CONSOLIDATED BALANCE SHEET
12 Months Ended Dec. 31
1999 1998
Balance Sheet Data:
Cash $11,238,188 $5,729,346
Current Assets other than Cash 4,817,174 1,879,548
Property & Equipment, net 10,746,914 3,540,400
Intangible and Other Assets 43,916,754 13,532,507
Total Assets 70,719,030 24,681,801
Current Liabilities 14,051,311 5,622,381
Long-term Debt 2,222,373 493,963
Stockholders' Equity 54,445,345 11,817,614
Other Operating Data:
Approximate Number of Customers
at Period End 100,000 31,100
Number of Employees at Period End 453 235
This press release might contain forward-looking statements. These
forward-looking statements are subject to risks and uncertainties. Actual
results may differ materially from such forward-looking statements as a result
of risks and uncertainties, which are described in the cautionary statements
section of the company's 10K dated December 31, 1998, and may include other
risks described in all Securities and Exchange Commission filings submitted
subsequent to this date.
SOURCE RMI.NET, Inc.
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Related links:
http://www.rmi.net
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/19990628/RMILOGO
PRN Photo Desk, 888-776-6555 or 201-369-3467
CONTACT:
Mark Stutz, Manager, Media Relations,
303-313-0672, mark.stutz@corp.rmi.net, or Steven P. Eschbach,
CFA, Vice President, Investor Relations, 303-308-2272,
steve.eschbach@corp.rmi.net, both of RMI.NET, Inc.
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