DENVER, June 22 /PRNewswire/ -- RMI.NET, Inc. (Nasdaq: RMII), a national
Web solutions/e-commerce and connectivity company, announced today the
implementation of a new five-point strategic action plan designed to enhance
its progress toward profitability. The plan is designed to reduce operating
expenses, grow revenue organically, increase customer retention, develop
market driven products and upgrade its network.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990628/RMILOGO )
First, RMI.NET has cut operating expenses through effective resource
management. The Company reduced its workforce today by 108 people or 24
percent throughout all its markets across the country with the majority of the
impact in Seattle and Denver. The Company will continue to reduce operating
expenses through improved productivity, which, in part, involves centralizing
its accounting, billing, technical support and customer service facilities.
"Any decision regarding employees is always difficult," said Douglas H.
Hanson, RMI.NET Chairman and CEO. "However, the continuing integration of our
back office functions, utilizing Oracle financial systems and CSG billing
systems, allows us to eliminate redundancies from our acquisitions."
Hanson added, "The market is demanding profitability and we are committed
to taking the steps necessary to reach that goal."
The second step of the plan is to further emphasize organic revenue
growth. Over the past 24 months, RMI.NET has acquired 23 companies which has
been the major contributor to its customer and revenue growth. The focus now
will be more directed to adding new customers and selling additional products
to existing customers.
To that end, the Company has recruited Alex Burney as Vice President of
Sales and Marketing. Prior to joining RMI NET, Burney was co-founder,
president and CEO of LyncStar Integrated Communications LLC, the nation's
seventh largest private broadband operator. Under Mr. Burney, LyncStar grew
organically from 0 to 22,000 video subscribers in two years. LyncStar also
had more than 300,000 households under contract before the company's major
assets were sold in December 1999. Details of RMI.NET's enhanced sales and
marketing program are nearing completion and will be announced shortly.
Third, RMI.NET will also be introducing a number of customer care
measurements to improve customer satisfaction. The Company is committed to
improving calling standards and technical support and soliciting customer
feedback in order to increase customer retention.
Fourth, RMI.NET is noted for providing high-speed connectivity and Web
solutions/e-commerce products to small and medium-sized businesses. That
focus will not change. The Company will continue to be responsive to its
customers and develop products they demand.
Finally, fifth, RMI.NET will continue to upgrade its network with an eye
towards improving network reliability. The Company is standardizing its
network platform and will be increasing its network capacity cost-effectively.
In order to accomplish these steps towards profitability, the Company has
realigned the senior management team assigning each senior officer to one
point of the five-point strategic action plan. Management performance will be
assessed on their success at achieving measurable objectives in the
implementation of the plan.
Employee performance and compensation will be directly tied to achieving
profitability through a new stock option plan the Company also announced
today. All eligible employees will have the opportunity to acquire or
increase their proprietary interest in the Company, which will create a
greater incentive toward maximum effort for the growth and success of RMI.NET.
"We are redirecting our entire organization towards profitability through
this very focused plan," added Hanson. "We fully expect to see the impact in
the fourth quarter of this year."
In combination with these announced cost reductions, the $12 million
credit facility from RFC Capital and the $7.5 million equity commitment from
Genesee International, Inc. provides the Company with sufficient working
capital well into 2001.
Hanson noted that RMI.NET's financial community presentations throughout
this year have focused on reaching EBITDA breakeven by December of this year
and this formalized action plan is consistent with this direction.
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 shopping, e-commerce
and portal site, http://www.webzone.com, which includes the proprietary search
engine, Infohiway. For more information, call (800) 411-6066, or visit
RMI.NET's web site at http://www.rmi.net.
This press release may contain forward-looking statements within the scope
of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Although the company believes these statements are based on reasonable
assumptions, it can give no assurance that its goals will be achieved.
Differences between assumed facts and actual results can be material depending
on the circumstances and investors should be aware of the important factors
and risks that could have a material impact on future results, including but
not limited to, the company's inability to increase revenue though organic
growth in the amounts or during the time period projected, the company's
failure to successfully reduce carrier costs, vendor costs, and SG&A expenses
as quickly and efficiently as planned, and the company's inability to raise
additional funding for working capital needs in the future. Please refer to
the company's cautionary statements section of RMI.NET's Form 10-K, dated
December 31, 1999, the company's Form 10-Q, dated March 31, 2000, and other
Securities and Exchange Commission (SEC) filings subsequent to this date.
SOURCE RMI.NET, Inc.
 back to top
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:
Steven P. Eschbach, CFA, Vice President -
Investor Relations of RMI.NET, Inc., 303-308-2272,
steve.eschbach@corp.rmi.net
|
