DENVER, Nov. 9 /PRNewswire/ -- RMI.NET, Inc. (Nasdaq: RMII) today
announced record quarterly revenues of $9.13 million for the three months
ended September 30, 1999, a 256 percent increase over the $2.57 million
reported for the same period a year ago.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990628/RMILOGO )
Sequentially, the 1999 third quarter revenues were up 43 percent from the
$6.39 million reported for the 1999 second quarter.
RMI reported an EBITDA(1) loss per share of $0.20 for the 1999 third
quarter, a $0.40 per share improvement over the $0.60 loss per share reported
for the 1998 third quarter, which included a $4.55 million charge for an
unsuccessful merger.
On an earnings per share basis, both basic and diluted losses per share
for the three months ended September 30, 1999 were $0.35, compared with a loss
per share, inclusive of the unsuccessful merger charge, of $0.67 share for the
same period ending September 30, 1998.
RMI.NET's market capitalization now stands at more than $150 million,
based upon approximately 18.5 million shares currently outstanding and the
closing stock price on Monday, November 8, 1998 of $8.50 per share.
RMI.NET noted that it continued on its projected path for strong growth
through the execution of its core business plan during the third quarter. The
company announced key product launches, additional strategic acquisitions to
expand its geographic reach and the start of the company's first-ever regional
advertising campaign.
"We continued to follow our strategic plan during the third quarter. Our
efforts were marked by additional acquisitions, an expansion of our high-speed
Internet access product line through the addition of the Warp Wire(SM) brand
and our first significant advertising campaign to build our brand awareness on
a regional level," said Douglas H. Hanson, chairman and chief executive
officer for RMI.NET. "We will continue to pursue efforts to expand our
customer and geographic base, and bring additional e-commerce solutions to our
customers and added value for our shareholders."
For the nine months ended September 30, 1999, RMI.NET reported
$20.78 million in revenues, a 219 percent increase over the $6.51 million in
revenues reported for the same period last year.
EBITDA loss per share, year to date for 1999, was $0.64 per share,
compared with a loss per share of $0.83 for the same period a year ago. Basic
and diluted losses per share for the nine-month period ending September 30,
1999 were $1.09 per share, compared with $0.99 per share for the same period a
year ago.
Third Quarter Milestones
Third quarter financial and operational milestones for RMI.NET included:
-- The addition of more than 23,000 customers nationwide through the
strategic acquisition of five companies in Arizona, Colorado,
Oklahoma, California and Washington state, for a total of
$15.2 million in common stock transactions;
-- The launch of high-speed, Digital Subscriber Line (DSL) Internet
access called Warp Wire, complemented by a joint marketing campaign in
Denver and Phoenix, through a business relationship with Covad
Communications, a leading national DSL provider. RMI.NET is rolling
out DSL service in 20 major cities;
-- The launch of a $1 million regional advertising campaign designed to
increase awareness of the RMI.NET name, educate the market to
RMI.NET's primary Internet-based services including DSL, and further
establish the company's ability to provide premier Internet and
e-business solutions;
-- The investment of an additional $7.5 million in the company by Hanson
through the exercise of a warrant agreement entered into by Hanson and
the company in October 1997; and A strategic partnership agreement
with Market Colorado to provide Internet sales and marketing services
to 750 Colorado companies and retailers, and a partnership agreement
to offer Internet service to the Rocky Mountain PBS members and
viewers throughout Colorado.
Recent Events
RMI.NET also noted a number of recent events during the fourth quarter of
1999 that will significantly contribute the company's overall success,
including:
-- A consolidation of RMI.NET's call center functions expected to save
$2.5 million in annualized costs as a result of the closing of the
Opelika, Ala., outbound call center, representing approximately half
of the $4.8 million anticipated expense savings from the previously
reported operating efficiency measures;
-- A revenue-sharing agreement with Enron Communications, a wholly owned
subsidiary of Enron Corp (NYSE: ENE) to offer ePowered(TM) solutions,
such as broadband Internet access, TV-quality streaming video and
video conferencing over the Internet. Enron Communications will spend
approximately $1.2 million for RMI.NET system upgrades to six RMI.NET
"points of presence" (POPs);
-- The creation of five regional operation areas of the company, each
having "profit and loss" responsibilities;
-- Recognition of RMI.NET as the fifth fastest-growing technology company
in Colorado and the fastest-growing Internet company in Colorado by
Deloitte & Touche. In addition, the company was recognized as the top
independent Internet service provider (ISP) in Colorado Springs,
Colo., and Boulder County, Colo.;
-- An upgrade to e-SELL(R), RMI.NET's Custom Business Solution, to a
2.2 version, enabling customers to better conduct transactional
Internet commerce; and
-- A service agreement with Unisphere Solutions, a Siemens Innovations
Company, to better deploy the rollout of RMI.NET's DSL product.
Continuing Initiatives for Remainder of 1999
RMI.NET continuing corporate initiatives for the remainder of 1999
include:
-- Continued efforts to realize third and fourth quarter revenues for
1999 of 50 percent greater than revenues realized during the first
half of 1999;
-- Continued acquisition to achieve critical mass, with a focus on those
companies with a higher concentration of dedicated access customers,
and a business mix of revenues to enhance RMI.NET upselling
opportunities and e-commerce solutions products; and
-- Successful implementation and integration of enhanced financial
billing, accounting and customer online presentment and payment
software.
During the quarter, total corporate customer count increased to
approximately 92,000 relationships, up 33 percent from approximately
69,000 customers at June 30, 1999, and up 411 percent from the
18,000 customers at September 30, 1998.
Financial Results
Gross margins for the quarter were $4.21 million, compared to
$1.66 million in the year ago period. The company continued executing its
strategy of generating revenue growth and long-term profitability by migrating
new low-cost customers, to incremental higher fee and margin services.
RMI.NET anticipates completing the transition of newly acquired customers to
full service relationships over the next several quarters.
Selling expenses for the quarter were $1.71 million, compared to
$0.47 million in the year ago period. General and administrative expenses
excluding depreciation and amortization increased to $5.56 million for the
third quarter of 1999, compared to $5.92 million during the third quarter of
1998. Depreciation and amortization charges were $2.28 million for the third
quarter of 1999 versus $0.49 million in the third quarter of 1998.
The company expects to realize greater economies of scale and improve
operating efficiencies in the near future as it consolidates the operations of
recent acquisitions. Net loss for the quarter was $5.45 million, versus net
losses of $5.30 million in the prior year quarter.
Company Outlook
The company continued to implement a number of key sales and marketing
initiatives for the third quarter 1999 designed to leverage its acquired
operations to increase revenue and margin per customer account. In addition,
company management is actively pursuing greater operating efficiencies at the
department levels to reduce costs, improve corporate expense ratios and fuel
further organic customer growth.
Denver-based RMI.NET, Inc., formerly Rocky Mountain Internet, is a
national commerce solutions provider focusing on e-commerce and convergent
communications. The company specializes in turnkey e-business applications;
high-speed Internet access, including Digital subscriber line (DSL) service;
and web solutions, including design, hosting and marketing. RMI.NET has an
annualized revenue run rate of $42 million and more than 92,000 nationwide
customers. The company wholly owns a proprietary portal site and search
engine, Infohiway, at http://www.infohiway.com. For more information on RMI.NET,
call (800) 864-4327, or visit the company's web site at http://www.rmi.net.
Financial results
THREE MONTHS
Financial Highlights as of September 30
Revenue 3Q98 3Q99
Communication Services $1,923,000 $8,058,000
Web Solutions 643,000 1,073,000
Total 2,566,000 9,131,000
Cost of Revenue Earned
Communication Services 716,000 4,564,000
Web Solutions 193,000 362,000
Total 909,000 4,926,000
Gross Margin 1,657,000 4,205,000
65% 46%
Selling expenses 474,000 1,712,000
General and administrative 1,371,000 5,561,000
Costs/Unsuccessful 4,549,000 --
Depr and Amort 490,000 2,275,000
Operating Loss (5,227,000) (5,343,000)
Other Income (Expense) (68,000) (88,000)
Net Loss (5,295,000) (5,431,000)
Preferred Stock Div -- 21,000
Net loss applicable to (5,295,000) (5,452,000)
Common stockholders
Basic & diluted loss per
Common share $(0.67) $(0.35)
EBITDA (4,737,000) (3,068,000)
FINANCIAL RESULTS
NINE MONTHS
Financial Highlights as of September 30
1998 1999
Revenue
Communication Services $5,178,000 $17,859,000
Web Solutions 1,329,000 2,924,000
Total 6,507,000 20,783,000
Cost of Revenue Earned
Communication Services 2,075,000 9,970,000
Web Solutions 438,000 873,000
Total 2,513,000 10,843,000
Gross Margin 3,994,000 9,940,000
61% 48%
Selling expenses 1,314,000 3,726,000
General and administrative 4,298,000 13,770,000
Costs/Unsuccessful 4,549,000 --
Depr and Amort 979,000 4,880,000
Operating Loss (7,146,000) (12,436,000)
Other Income (Expense) (182,000) (248,000)
Net Loss (7,328,000) (12,684,000)
Preferred Stock Div -- 199,000
Net loss applicable to (7,328,000) (12,883,000)
Common stockholders
Basic & diluted loss per
Common share $(0.99) $(1.09)
EBITDA (6,167,000) (7,556,000)
CONSOLIDATED BALANCE SHEET
NINE MONTHS
Financial Highlights as of September 30
Sept. 30, 1999 Dec. 31, 1998
Balance Sheet Data: (Unaudited)
Cash $6,212,781 $5,729,346
Current assets other than cash 6,027,712 1,879,548
Property & equipment, net 9,881,161 3,540,400
Intangible and other assets 35,998,784 13,532,507
Total Assets 58,120,438 24,681,801
Current liabilities 10,717,011 5,622,381
Long-term debt 2,742,361 493,963
Stockholders' equity 42,732,895 11,817,614
Other Operating Data:
Approximate Number of
Customers at end of period 92,000 31,100
Number of employees at
end of period 425 235
(1) EBITDA represents earnings before interest expense, income 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.
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 as
of this date.
SOURCE RMI.NET, Inc.
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http://www.rmi.net
Photo Notes:
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http://www.newscom.com/cgi-bin/prnh/19990628/RMILOGO
PRN Photo Desk, 888-776-6555 or 201-369-3467
Company News On-Call:
http://www.prnewswire.com/comp/139760.html or fax,
800-758-5804, ext. 139760
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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