The company reported an EBITDA loss (net loss before interest, taxes, depreciation, amortization and non-cash stock compensation) of $22.1 million, a 14% improvement over a EBITDA loss of $25.6 million in the fourth quarter of 2000. The company also reported a net loss of $32.9 million, or $0.34 per share, compared with a loss of $33.0 million, or $0.36 per share, for the fourth quarter of 2000.

The first quarter of 2001 was the best quarter in our company’s history. We posted strong revenues and record 12-month bookings. We are proud of both the quality of our bookings and the surge in demand for our recently launched STORmanage(sm) service, stated Peter Bell, StorageNetworks’ Chairman and Chief Executive Officer. In today’s economy, companies are looking for ways to minimize the complexity of their storage management while at the same time immediately reducing the cost of their IT environments. We believe that the traditional way to satisfy enterprise storage requirements is no longer acceptable to these companies. StorageNetworks(sm) software and services are the solution to the challenges faced by enterprise customers. Ford Motor Company, for example, licensed our software and entire suite of services during the quarter.

During the quarter, StorageNetworks list of customers increased to over 210. In addition to Ford, major customer additions during the quarter include Microsoft, Sun Microsystems, Washington Mutual Bank, Adidas, Bank One and Weyerhaeuser. Significant repeat customers include Covisint, Lycos, MetLife and West LB London. The combination of new larger enterprise accounts and repeat customers resulted in average annualized revenue per customer increasing to approximately $500,000 from $450,000 in the previous quarter.

I am very pleased with the financial results for the quarter, stated Paul Flanagan, Executive Vice President and Chief Financial Officer. We saw our EBITDA loss, net loss and loss per share continue to improve toward profitability. I was most pleased with the quality of our bookings. Eighty five percent of our bookings for the quarter came from enterprise accounts. This factor, combined with a solid installed customer base, has resulted in our days sales outstanding remaining strong at 45 days.

As the STORos(sm) operating system continues to become more robust, our software and the way in which we deliver services continue to create unique advantages for our business. For example, during the quarter we saw an increase in higher margin offerings, such as our STORmanage services, which leverage our software and best practices. In addition, 70% of new bookings will be delivered onsite, inside the customer’s IT data center. This combination has resulted in a 36% improvement in gross margin loss to -21% and will allow us to continue to drive gross margin toward profitability, continued Flanagan.

SOURCE: COMPANY PRESS RELEASE