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USWeb Corp. Reports Q2 Loss

Internet services provider USWeb Corp. today announced 1998 second quarter results, posting a net loss of $60.9 million, or $1.81 per share, and revenues of $25.4 million.

Losses were up compared to the previous quarter's net losses of $16.4 million, or $0.56 per share, while revenues climbed 86%, compared to last quarter's revenues of $13.7 million and surged 940% vs. same time last year revenues.

Excluding non-cash charges, the net loss was $1.2 million, or $.03 per share, compared with a net loss of $2.5 million, or $.09 per share, in the previous quarter. USWeb said non-cash charges included depreciation and amortization, stock compensation, acquired in-process technology, and amortization of intangible assets.

Citing second quarter initiatives, USWeb highlighted its acquisition of network solutions provider Gray Peak Technologies. The company said the purchase was a major push in growing its newly established USWeb Network Solutions Practice, focusing on Internet network engineering, network management, network integration, network security, and voice over IP.

During the same period, the company announced restructuring plans, segmenting its business into three main divisions: USWeb Strategies, to offer strategy consulting services; USWeb Technologies, to provide development of Internet applications and network systems implementation services; and USWeb Studio, to create, design, and market online services.

The Santa Clara, CA-based company disclosed that it purchased and incorporated a total of 31 companies during the last 18 months, in a bid to expand domestically and abroad. It now operates in all major U.S. markets, as well as the UK, Germany and Hong Kong. On a pro forma basis, assuming each acquisition had occurred by the start of the year, the consolidated revenues of USWeb for the second quarter equaled $27.7 million.

"It is important for our constituents to understand the financial model USWeb follows," said Carolyn Aver, CFO of USWeb Corporation. "Following generally accepted accounting principles (GAAP), we show non-cash charges in our statement of operations. However, because most of these charges are due to actions outside regular operations (primarily our acquisition program), we believe that showing our financial statements without these charges assists in the understanding of our ongoing business. So we disclose the net loss two ways--with and without non-cash charges."

"USWeb has reached a major milestone of $100 million in annualized revenue," said Joe Firmage, chairman and CEO. "This is demonstrative of our growth and viability as a market leader in this space."

In early morning trading today, USWeb (NASDAQ:USWB) was down 1 1/8, trading at 20.