StorageNetworks Announces Q3 Results, New VP

StorageNetworks, a Waltham, Mass.-based storage service provider, today announced third-quarter revenues of $31.5 million, a 120-percent increase over revenues of $14.3 million in the third quarter of 2000.

On a sequential-quarter basis, revenues were down $1.9 million from the second quarter of 2001. Managed services revenue, however, was consistent with last quarter’s numbers in that category with $29.8 million reported in each quarter.

The company reported an EBITDA loss (net loss before interest, taxes, depreciation, amortization and non-cash stock compensation) of $11.2 million, a 38-percent improvement over an EBITDA loss of $18.2 million in the second quarter of 2001. The company also reported a net loss of $27.0 million, or $0.28 per share, a 16-percent improvement from a loss of $32.2 million, or $0.33 per share, for the second quarter of 2001.

StorageNetworks reported the following additional financial highlights:

  • Twelve-month backlog of $105 million at September 30, 2001 (represents 12-month backlog on signed contracts plus an estimate of anticipated renewals on contracts with less than 12 months remaining).
  • Gross margins for the third quarter were 3 percent of sales, an improvement from negative 3 percent in the previous quarter.
  • Revenues from enterprise accounts increased to 68 percent of revenues, up from 58 percent in the previous quarter.
  • Twelve-month backlog from enterprise accounts continues to increase to 80 percent at the end of the third quarter, up from 72 precent at the end of the previous quarter.

“The challenging economic environment has resulted in our facing longer sales cycles. Additionally, we continue to see fall out of our early customers. As a result, driving forward and signing new deals keeps our managed service revenues and 12-month backlog from declining,” said Paul Flanagan, StorageNetworks’ executive vice president and chief financial officer.

StorageNetworks also announced today the appointment of Tony Scotto as senior vice president of product development. Scotto will be responsible for enhancing the company’s data storage management software platform and for next-generation development initiatives that enable large enterprises and service organizations to centrally manage their multi-vendor storage infrastructure.

Scotto has 20 years of experience in software development and data storage management. Hes was vice president of software
engineering at EMC, vice president at Idiom, vice president of engineering and customer support at GenRad.

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