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Thursday
February 15, 11:25 am Eastern Time
Company Press Release
North
American DataCom Announces Interim Business Plan
IUKA,
Miss.--(BUSINESS WIRE)--Feb. 15, 2001--North American DataCom,
Inc. (OTC BB: NADA - news) announced today that it had completed
revisions to its original Business Plan. This Plan had been
formulated in partnership with Cap Gemini Ernst and Young
called for the construction of a 3,000-mile fiber optic network
throughout the Southeast United States. Under the revised
Plan, the company will divide its proposed fiber optic network
construction into six discreet segments. The Company will
look to fund each segment separately, and expects to complete
the first segment (roughly 550 route miles, extending from
Atlanta to Memphis) by June 2001.
In September 2000, the Company retained Cap Gemini Ernst &
Young to revise the Company's existing Business Plan and Business
Model. These were completed in December. The 5-year Plan calls
for a $725 million capital investment for seven EDS Centers
and the 3,000-route-mile Fiber optic network. Revenues at
the end of 5 years are projected to be over $500 million.
``Our goal has always been to construct a state-of-the-art
fiber optic network in the southeast,'' stated Robert R. Crawford,
president of North American DataCom. ``Our five year objective
is to complete the 3,000 mile network. We are now faced with
the realities of the current capital marketplace, which has
limited our access to funds for the entire investment. The
Company has therefore redirected its focus to shorter-term
goals. As discussed in previous releases, the Company's initial
marketing efforts are to provide Enterprise Data Storage (EDS)
services and broadband wavelength services to the rural South.
These two markets provide tremendous opportunities for immediate
revenue growth once the initial network segment is completed.''
``To
accomplish our objectives in the current economic environment
we have divide the Business plan and model into six independent
network segments,'' said Mr. Crawford. ``Segment 1, running
from Memphis to our facility in Iuka, Mississippi, and on
to Atlanta, is tactically and strategically the most important
phase, and therefore will be constructed first. The capital
budget to develop and operate the Segment 1 network and EDS
business is planned at approximately $75 million through the
first 18 months of operation, ending July 2002. The Segment
1 Business Plan projects operating cash flow to be breakeven
for the fiscal year ending June 2002 with projected revenues
and net income of approximately $88 million and $19 million,
respectively, in the next fiscal year. We remain firm in our
conviction to develop the network in rural South, an underserved
area, and this will position us to benefit in the future from
expected traffic growth. We expect the capital market to react
favorably to our Plan, and expect to complete a preliminary
equity line of credit shortly with a regional funding group.''
Segment
1 serves 15 of the 62 smaller population centers and 3 of
the major 7 population centers along the planned network route.
North American DataCom will obtain the first alternative fiber
routes and footprint for 80% of the total population, where
Bell South is the incumbent, and where competition has a very
low presence. The Company sees a large opportunity for its
broad bandwidth and wavelength services in this Segment. The
Company plans to use its network to provide cost effective
communications services to telecommunications companies (i.e.,
LECs, CLECs, DLECs, IXCs, and Cable MSOs), ISPs and large
organizations, including some government agencies and departments.
In addition, North American DataCom plans to initially operate
2 of its 5 satellite data storage centers that are directly
connected to its fiber optic network and to open its Major
Data Center. Initially, this Major Center will comprise 60,000
of the planned 125,000 square feet available in the Company's
facility in Iuka, Mississippi. North American DataCom's initial
market strategy is to provide high quality broadband communications
and data storage services in the 2nd Tier Segment 1 markets
within northern Mississippi, Alabama and Georgia and southern
Tennessee.
Under
the revised Plan, North American DataCom expects to begin
generating revenues from Segment 1 in July 2001, and expects
to have a positive cash flow in June 2002, showing profits
in August 2002.
Safe
Harbor Statement
Statements
in this release express management's beliefs and expectations
regarding future performance. These statements are forward-looking
and involve risk and uncertainties. These risks include, but
not limited to, the ability to negotiate venture agreements,
properly identify acquisition partners, manage and integrate
acquired businesses, react to quarterly fluctuation in results,
raise working capitol and secure other financing, respond
to competition and other rapidly expanding technology, deal
with market and stock price fluctuation, and other risks.
These risks are and will be detailed, from time to time, in
North American DataCom, Inc. Securities and Exchange Commission
filings. Actual results may differ materially from management's
expectations.
North American DataCom's principal executive offices are located
at 751 County Road 989, Building 1000, Iuka, MS 38852. For
further information, contact Investor Relations, 662/424-5030,
and by e-mail at investorrelations@nadata.com.
____________________
Contact:
North
American DataCom, Inc., Iuka
Investor
Relations, 662-424-5030
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