WAM!NET Restructures, Prepares for Profitability by the End of 2001
Press release from the issuing company
5/1/01 - (WhatTheyThink.com) After several days of speculation about the demise of WAM!NET, WhatTheyThink.com has learned the company is well on their way to securing more funding with plans to show a profit by the end of the year.
WAM!NET has taken tough action to align their cost structure with revenue and profitability targets. Last Friday, WAM!NET implemented a restructuring program that will result in the reduction of 105 positions. Said Tim Elliott, Executive Director of Global Marketing for WAM!NET, "While decisions like these are clearly difficult, this action will result in a stronger WAM!NET that is positioned for profitable growth in 2001."
When asked about recent rumors of serious financial trouble, Elliot said they have 'been there and done that.'
"Do we have challenges? Yes. What capital-intensive technology company is immune to the economic challenges presented today? Clearly, many companies are facing challenges. WAM!NET has faced challenges in the past and we’ve overcome them. And we firmly believe that we will do so again. Last year – in one of the toughest capital markets in 20 years – we raised $160 million. Moving forward, we expect continued success in raising the capital necessary to fund our operations through to profitability later this year."
In WAM!NET's recent 10K filing, their accounting firm said as of the date of the filing, December 31, 2000, WAM!NET did not have sufficient cash to sustain operations for a full twelve months. Says Elliot, "While language of this sort is derived from standard accounting boilerplate, it nevertheless highlights the challenging economy and tight capital market we currently face. Not surprisingly, our management team is very focused on fund raising. In keeping with these efforts, WAM!NET announced in February 2001 that we had secured a $30 million bank line of credit."
WAM!NET will issue their Q1 2001 10Q filing sometime in May. The company had a revenue increase of 117% in the last quarter of 2000 and added 8,000 customers for the year. "Today, 11 of the 20 largest U.S. publishers, 18 of the 20 largest U.S. ad agencies, 12 of the 20 largest U.S. retailers, 16 of the 20 largest U.S. printers, and 34 Fortune 100 corporations use WAM!NET services," said Elliot.
WAM!NET has extended their global IT platform by adding data storage, application and professional services to customer segments ranging from government agencies, film studios, and post-production agencies, to broadcasters and healthcare organizations.
Later today, we expect to find out about a new pricing model from the company. "We are confident (the pricing announcement) will be embraced enthusiastically by our global customer base, as well as those companies that currently do not do business with us."
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