Dec 20, 2001 : Interland Reports Q1 2002 Results

📅 December 20, 2001 - Interland, Inc. (interland.com 👉 Total Reviews: 2
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The company reported revenues of $24.9 million for the quarter, exceedingguidance. Revenues grew 43.2 percent from the prior quarter and 83.9 percentyear-over-year. Adjusted EBITDA loss was $8.5 million, compared with $15.1million pro forma for the prior quarter. Gross margins were 43.2 percent forthe quarter, compared to 36.8 percent for the prior quarter, an improvementof 640 basis points. Loss from continuing operations, excluding mergerintegration and restructuring expenses, was approximately $.11 per share,based upon approximately 138 million shares outstanding. Net loss for thequarter was $18.8 million or $.14 per share.
"This quarter marked our first full quarter since merging the operations oftwo leading Web hosting companies," said Joel J. Kocher, chairman and chiefexecutive officer of Interland. "We remain focused on our goal of achievingfree cash flow positive by the end of the current fiscal year in August2002. Our merger integration efforts and focus on increased efficiencies andhigher-margin revenue are already showing positive results, reflected in ourEBITDA progress and gross margin improvement."
"Now that our merger integration efforts are well underway, we have begun toexecute on the next phase of our strategy," Kocher stated. "During thequarter we announced the acquisition of the small business Web hostingaccounts of Interliant, and we are transitioning these customers through a90-day migration program. We believe this kind of strategic acquisition,coupled with our integration expertise, will allow us to continue to gainscale and efficiency.
Interland's cash position remains one of the strongest in the industry, saysInterland CFO David Buckel. As of Nov. 30, 2001, Interland had nearly $170million in cash and investments. Cash burn for continuing operationsrepresented approximately $8.5 million in the first quarter and cash usedfor other increases and decreases in operating assets and liabilities and topay other balance sheet liabilities was approximately $8.8 million. Othercash utilization included approximately $5.1 million for integration, mergerand severance costs, approximately $1.9 million for capital lease pay-downs,approximately $6.7 million for discontinued operation liabilities and $8.0million for capital expenditures and Interliant account acquisitions.
"We're pleased with the improvement in our cash burn from operations for thequarter, and expect that improvement to continue. With almost $170 millionin cash, cash equivalents and investments, we believe that we have far morecash than required to fund operations until we are free cash flow positive,"said Buckel. "Additionally, we still have a very significant income taxreceivable which is expected to bring an estimated $23.8 million to ourcompany."
Management reiterated previous revenue guidance estimates of $105 million to$115 million for fiscal year 2002 based on its current business model, evenif current weak economic conditions continue. Gross margin is expected tocontinue to improve. Capital expenditures for the full year are expected tobe $14 million to $20 million. Loss per share from continuing operations, isexpected to be in the range of $.08 to $.10 for the second quarter of 2002,and Adjusted EBITDA loss is expected to be $5.7 million to $5.9 million.