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Tuesday
May 15, 1:00 pm Eastern Time
Company Press Release
North
American DataCom Announces Third Quarter Financials: Net Revenues
Increased by 113% and Development Expenses Up
IUKA,
Miss. - (BUSINESS WIRE) - May 15, 2001 - North American DataCom,
Inc. (OTC BB: NADA), the Fiber Optic and Data Storage Company,
announced its financials for the nine-months ended March 31,
2001. Reported revenues for the nine-month period were $358,284,
an increase of approximately 113% over the prior year's nine-month
period of $167,997. Revenues from existing Internet and paging
services were $251,866, up approximately 50% over the previous
year's nine-month period of $167,997. In addition, the Company
also reported its initial revenues of $62,884 from its enterprise
data center (EDS) line and $43,534 from its wholesale broadband
telecommunications network business line.
"We
are pleased to have commenced generating revenue streams from
our EDS and wholesale bandwidth businesses," stated Robert
Crawford, President of the Company. "The Company projects
the dramatic increase in these business revenues once the
first segment of our fiber optic network is completed."
While
positioning itself tactically and strategically as a state-of-the-art
data storage and broad bandwidth service provider, North American
DataCom, Inc. reported a net loss of $2,569,433 for the nine-month
period ended March 31, 2001, as compared to $865,304 for the
same nine-month period one year ago. This loss is directly
attributable to increased construction and development expenses
incurred in initiating the Company's broadband telecommunications
network and enterprise data center business plans.
Cost
of services were $157,071 for the nine-month period of the
current year, up from $29,742 for the same period in 2000.
Approximately $12,000 of the increase is directly related
to the Company's sale of fiber optic conduit. The balance
resulted from increased telecommunication expenses due to
the growth of the Company's customer base for its Internet
access service of approximately 500 customers and expansion
of our existing bandwidth capabilities.
Selling,
general and administrative (SG&A) costs for the nine-month
period were $2,245,174, compared with $1,009,792 in 2000.
Approximately $450,000 of the increase is directly due to
the addition of management and technical staff to develop
the fiber optic business. Staffing increased by six employees,
for a total of 30 employees on March 31, 2001, compared to
24 employees on March 31, 2000. The balance of SG&A costs,
totaling approximately $800,000, resulted from increased legal,
engineering and consultant expenses.
The
$525,473 for Other Expense compares with $6,223 Other Income
for the same period in 2000. This expense is entirely associated
with the imputed interest of $540,827 relating to our acquisition
agreement for 505 miles rights-of-way and fiber conduit from
New Orleans to Jacksonville, Florida.
The
Company's fiscal year ends June 30, 2001. With the 5-year
strategic plan in place, North American DataCom has positioned
itself for a capital investment of more than $500 million
to develop seven EDS Centers and a 3000-mile fiber optic network.
This network is divided into 6 independent network segments.
Segment 1, now under construction, is the 550-mile optic line
from Atlanta to Memphis. This Segment will serve 12 of 49
smaller cities with populations of less than 100,000, 3 of
13 mid sized cities with populations between 100,000 and 500,000,
and 3 of the major 7 cities in its planned network. The Company
anticipates revenues from Segment 1 by the fall of 2001, and
projects a positive cash flow by the fall of 2002. These dates
are subject to availability of capital to complete Segment
1. Total capital for Segment 1 start-up is approximately $65
million.
The
Company entered into a binding Letter of Agreement with IFG
Private Equity, LLC, an Atlanta-based institutional investor,
in March of 2001. The $25 Million in IFG equity financing
carries an option for an additional $25 Million, and can provide
a significant portion of the capital to implement Segment
1 of the Company's business plan.
Robert
R. Crawford, President North American DataCom, Inc., emphasized
that "once Segment 1 is operating, the Company will become
a leader in providing application services and high speed
bandwidth solutions for the rural Southeastern United States."
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 capital 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,
or by e-mail at investorrelations@nadata.com.
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