Atlanta, Georgia – (The Hosting News) – November 8, 2005 – Publicly held web hosting company, Interland, has reported results for its fourth quarter and fiscal year ended August 31, 2005.
The quarter was highlighted by the appointment of Jeffrey M. Stibel as CEO and Director. The Board of Directors also added three other new members, including Seymour Holtzman as Chairman. In addition, Interland sold its dedicated server assets to Peer 1 Network for approximately $14 million in cash.
Jeff Stibel, President and CEO, Interland commented on the results, ”While these results are a reflection of previous management’s performance, since my arrival at the end of the quarter, Interland has begun a definitive restructure geared to improving the business. At our core, we are focused on providing websites and online services that create a powerful web presence for small and medium-sized businesses. Our goals going-forward are to stabilize the business, grow our subscriber base, take advantage of our under-utilized assets, and move toward profitability to increase shareholder value.”’
Summary of Fiscal Fourth Quarter 2005 Quarter Results:
— Total revenues for the quarter were $20.6 million, down 7.6%,
or $1.7 million from $22.3 million, in the third quarter.
— Net loss was $6.2 million, or negative $0.38 per share, flat
from $6.2 million, or negative $0.39 per share, in the third
— Earnings before interest, taxes, depreciation, and amortization
(“EBITDA”)(a) for the quarter was negative $2.1 million, down
$1.6 million from negative $0.5 million in the third quarter.
— Cash and investment position, which includes cash and
cash equivalents of $16.9 million and restricted investments of
$9.6 million, was $26.5 million (excludes approximately
$11.4 million of net proceeds from the dedicated server assets
sale to Peer 1 received in September), compared to $33.7 million in
the previous quarter.
Summary of Results for the Fiscal Year Ended August 31, 2005:
— Total revenues for the year were $88.6 million, down 13.8%
versus $102.7 million year over year.
— Net loss was negative $19.9 million, or negative $1.24 per
share, versus negative $104.7 million, or negative $6.50 per share
in the previous year.
— EBITDA(a) for the year was positive $0.5 million, from negative
$72.1 million in the previous year (negative $72.1 million from
fiscal 2004 included $74 million in goodwill intangible and asset
Gonzalo Troncoso, Executive Vice President and CFO added, ”Interland strengthened its team and business with the addition of new management and a new philosophy that embraces our fundamentals. The company has a solid reputation in the SMB marketplace and is well-positioned to take advantage of its core competencies. With $26.5 million of cash (not including the proceeds from the dedicated server assets deal), 280 employees and Sarbanes-Oxley 404 compliance under its belt, Interland is prepared to focus on its core strengths of providing high-quality websites and online services to the SMB market.”
Mr. Stibel concluded, ”In the short time since I joined Interland, the company has announced the sale of its dedicated server assets and multiple data centers for approximately $14 million in cash, a 38% reduction in head count, and a restructuring of the organization. We have also successfully concluded our first Sarbanes-Oxley Section 404 certification, demonstrating the effectiveness of our internal controls. We are taking a very thorough look at the business and are committed to growing key strategic areas such as direct and indirect sales, intellectual and human capital, technology and software development and our brand in the marketplace. I am encouraged by our efforts thus far and am confident in the new management team we are building.”
As announced by previous management, Interland received a termination notice from Verizon in November 2004. The contract is set to expire on December 31, 2005. Interland anticipates that Verizon will migrate its customers in 2006. Verizon accounted for approximately 2.1% of Interland’s August 2005 revenue. The company will maintain a smaller agreement with Verizon and continue to provide its SiteBuilder services.
For further information on the quarter and fiscal year, please refer to the Company’s Form 10-K.
For more information about Interland, please visit www.interland.com.