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Monday
February 19, 7:46 am Eastern Time
Company Press Release
North
American DataCom Reports Second Quarter Results: Net Revenue
and Development Expenses Up
IUKA,
Miss.--(BUSINESS WIRE)--Feb. 19, 2001--North American DataCom,
Inc. (OTC BB:NADA - news), the Fiber Optic and Data Storage
Company, announced financial results for its second quarter
ended December 31, 2000. For the six-month period ended December
31, 2000, the Company reported revenues from its startup ISP
and paging services of $156,373, an increase of approximately
59% over the previous year's six-month period of $98,210.
``While we are optimistic about this revenue growth, we recognize
that these modest revenues are generated by locally acquired
Information Technology businesses that we plan to expand as
our fiber optic network is built,'' said Robert R. Crawford,
chief executive officer and president, North American DataCom.
``As the network grows,'' said Mr. Crawford, ``the Company
will provide Enterprise Data Storage (EDS) services and broadband
wavelength services to greater segments of the Southeast United
States, where we continue to see strong demand for North American
DataCom's technology. With our expanding product and platforms,
we are well prepared to be a leading strategic supplier of
transport and storage solutions for our customers' vital business
information.
``North
American DataCom is positioning itself as an industry standard
for data storage and broad bandwidth services, which we will
provide with our own growing fiber optic network backbone.
We have a highly experienced staff and remain focused to implement
our business strategies as discussed in the Business Plan
that we formulated in partnership with Cap Gemini/Ernst &
Young, which calls for the construction of a 3,000-mile fiber
optic network.''
The
reported net loss for the six-month period ended December
31, 2000 was $1,802,870, compared with $427,739 for the six-month
period a year ago. This loss is directly attributed to increased
expenses due to the development costs for the Company's fiber
optic system.
About
$1,000,000 of the increase of $1,375,000 in expenses is due
to greater selling, general and administrative (SG&A) costs
for the six-month period. The SG&A 6-month expenses amounted
to $1,513,954, compared with $524,923 over the prior period.
Another $400,000 of the increase is directly due to the significant
addition of management and technical staff to develop the
fiber optic business. The balance, approximately $600,000,
arises from increased legal, engineering and consultant expenses.
The
remainder of the increase arises from the $349,063 of other
expense for the six-month period ended December 31, 2000,
as compared with $6,303 of other income in the same period
in 1999. This expense is primarily associated with the imputed
interest of approximately $365,000 relating to an acquisition
agreement for 505 miles rights-of-way and fiber conduit from
New Orleans to Jacksonville, Florida.
As
the Company discussed in earlier press releases, it plans
to announce its equity and debt capital planning for the first
550-mile segment of its 3,000-mile network as soon as they
have been finalized. Discussions with funding sources are
presently underway.
``The
industry understands that we are making a large investment
to serve the rural South,'' said Mr. Crawford. The total asset
investment of the Company increased from approximately $2.5
million in December 31, 1999 to $16.8 million in December
2000.
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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