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EXHIBIT 99.1
PRESS RELEASE
USINTERNETWORKING, INC. CONFIRMS FOURTH QUARTER REVENUE AND EBITDA GUIDANCE
COMPANY TRIMS WORKFORCE REFLECTING INCREASING EFFICIENCY AND BROAD ECONOMIC
CONDITIONS, EXPECTS EBITDA BREAKEVEN TO ACCELERATE
ANNAPOLIS, MD, JANUARY 16, 2001 -- USinternetworking, Inc. (USi, Nasdaq: USIX),
a leading Application Service Provider, today announced it expects to report
revenues for the fourth quarter ended December 31, 2000 of approximately $37.0
million, including one-time fees of approximately $3.0 million primarily related
to the early termination of a contract with US WEST. The Company expects to
report an EBITDA loss of approximately $12.0 million. Actual results are subject
to final audit.
During the fourth quarter, the Company secured approximately $49.0 million in
new service contract value. "The contract value sold in the quarter reflects
both customer hesitations early in the quarter based on now-resolved liquidity
concerns, as well as client sentiment regarding the broader economic
environment," said Andrew A. Stern, Chief Executive Officer. "Nonetheless, we
are pleased with the enterprise orientation and caliber of the 33 new client
units signed in the quarter." New clients include companies such as Magellan
Health Care, The Longaberger Company, and Polyclad Technologies, a Cookson
Electronics Company.
"We continue to be encouraged by the increasing efficiencies we are realizing in
servicing our clients, as reflected in our improving EBITDA performance," said
Stern. "We are deriving operating efficiencies by leveraging our experience in
implementing and maintaining mission critical systems as well as from efficiency
gains realized through recent organizational changes." Due to these efficiencies
and the projected economic environment, USi announced today it will reduce its
workforce by 11%, or approximately 150 employees. The workforce reductions will
occur predominately in areas where increasing efficiency and organizational
re-alignment have created excess capacity and accordingly will not impact client
service levels or future growth.
"We continue to see good acceptance of our ASP value proposition among
enterprise clients and foresee substantial opportunities for future growth.
Despite the vagaries of the economic climate, USi is well positioned to achieve
or exceed its profit and cash flow goals for 2001, while maintaining its
commitment to exceptional customer service," said Stern.
BUSINESS OUTLOOK
Consistent with industry trends, the Company continues to experience erosion of
its early stage, venture backed client base, which is expected to represent
approximately 7% of the 12-month backlog at the end of the fourth quarter 2000.
Total backlog is expected to be approximately $104 million at year-end 2000.
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The Company expects revenue for the first quarter 2001 to be approximately $35
million, or slightly above fourth quarter 2000 revenues prior to termination
fees. Revenue for 2001 is expected to be approximately $180 million, a 64%
increase over expected 2000 revenues.
The Company expects EBITDA loss for the first quarter 2001 to decline to
approximately $11 million inclusive of costs associated with the reduction in
workforce. For the full year 2001, the Company expects the EBITDA loss to be in
the range of $10 million to $11 million, down from an expected $72 million loss
for 2000. The Company expects to accelerate its previously disclosed target of
EBITDA breakeven from fourth quarter 2001 to third quarter 2001.
DETAILS CONCERNING THE INFORMATION CONTAINED IN TODAY'S RELEASE WILL BE
DISCUSSED IN A TELECONFERENCE CALL ON WEDNESDAY, JANUARY 17, 2001 AT 8:00 AM
(ET):
Dial-in Number Domestic: 800-521-5414
International: 303-267-1001
Access Code: 907-591
A REPLAY OF THIS TELECONFERENCE CALL WILL BE AVAILABLE:
Date: Wednesday, January 17, 2000
Start Time: 11:00 AM (ET)
Dial-in Number: 800-625-5288
Access Code: 907-591
Details concerning the fourth quarter and full year 2000 audited financial
results, as well as a complete overview of fourth quarter 2000 operations, will
be released on February 13, 2001. A conference call will be held at 5:30 PM (ET)
on the same day to discuss these results. The call can be accessed via the
USinternetworking Website at www.usi.net.
ABOUT USINTERNETWORKING, INC.
USinternetworking Inc. (Nasdaq: USIX), a leading Application Service Provider,
delivers e-commerce and enterprise software as a service. The company's iMAP
portfolio of service offerings delivers the functionality of leading software
from Ariba, BroadVision, Lawson, Microsoft, Oracle, PeopleSoft and Siebel as a
continuously supported, flat-rate monthly service via an advanced, secure global
data center network. Additionally, Usi's AppHost managed application hosting
services provide the most advanced solutions for enterprises, software
companies, marketplaces, and system integrators that are seeking a better way to
deliver solutions over the Internet to their customers and end users. For more
information, visit www.usi.com.
Internet Managed Application Provider, iMAP, AppHost, PriorityPeering, USiGSP,
USiSAN USiAccelerate, and Making Software Simple are service marks of
USinternetworking, Inc. All other trademarks are the property of their
respective owners. USi strategic partners and providers are publicly traded on
Nasdaq under the symbols: ARBA, BVSN, CSCO, MSFT, ORCL, PSFT and SEBL.
Information in this release may involve expectations, beliefs, plans, intentions
or strategies regarding the future. These forward-looking statements involve
risks and uncertainties. All forward-looking statements included in this release
are based upon information available to USinternetworking Inc. as of the date of
the release, and we assume no obligation to update any such forward-looking
statement. The statements in this release are not guarantees of future
performance and actual results could differ materially from our current
expectations. Numerous
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factors could cause or contribute to such differences. Some of the factors and
risks associated with our business are discussed in the Company's registration
statement on Form S-3 filed with the Securities and Exchange Commission ("SEC")
on October 12, 2000, the Company's Form 10-Q filed with the SEC on November 14,
2000, and in our other reports filed from time to time with the SEC.
Contacts:
USinternetworking, Inc.
Media Contact:
Chris Walker
(410) 897-3560
chris.walker@usi.net
or
Financial Contact:
Dave Miller
(410) 897-1746
dave.miller@usi.net