Network Access Solutions Announces First Quarter Financial Results

- Network Services Revenues Up 35% Over Previous Quarter

- Quarterly EBITDA Losses Decline 29% Sequentially

- $49 Million in Cash on Balance Sheet



Apr 26, 2001, 01:00 ET from Network Access Solutions Corporation

    HERNDON, Va., April 26 /PRNewswire/ -- Network Access Solutions
 Corporation (NAS) (Nasdaq: NASC), one of the nation's leading broadband
 solutions providers for businesses, today announced financial results and
 operating metrics for the first quarter ended March 31, 2001.
     Network services revenues increased 35% sequentially and 177% from the
 first quarter of 2000.  Sales were $4.7 million compared to $3.5 million in
 the previous quarter and $1.7 million in the first quarter of 2000.
     "Our strong performance from our network services business this quarter
 was due primarily to changes we have made to our business over the past
 several months," said NAS CEO Jon Aust.  "Late last year, we made significant
 improvements to our operations, and we have increased revenues by installing
 lines faster. Many of our larger enterprise customers continue to add more
 lines and higher margin services, and we continue to add business from new
 enterprise customers.  We've also begun to benefit from price increases we
 implemented last quarter and this quarter and are generating revenues from
 installations."
     "In addition, market consolidation late in the first quarter contributed
 to a significant number of new orders and we began charging for some equipment
 sales to new customers at the very end of March.  We expect to benefit from
 this additional revenue next quarter," added Aust.
     Total lines billed as of March 31, 2001, reached 12,776 compared to 9,814
 in the fourth quarter of 2000.
     "ARPU for new billable lines added in the first quarter continued to trend
 upward, reaching $161 in the first quarter compared to $138 in the fourth
 quarter of 2000," commented Aust.  "We are tracking to our plan to gain higher
 value and margin business."
     Product and integration revenues were $3.2 million for the quarter
 compared to $4.2 million in the previous quarter and $4.7 million in the first
 quarter of 2000.  This decrease was due to lower than expected equipment
 spending from the company's larger enterprise customers.  This is a low margin
 product line of the company and the revenue is expected to continue at this
 reduced rate for the foreseeable future.
     As a result of continuing cost reductions, SG&A expenses for the quarter
 decreased to $14.0 million, representing a 24% sequential decline and a 42%
 decrease since the third quarter of 2000.
     Earnings before interest, taxes, depreciation and amortization (EBITDA)
 loss in the quarter decreased to $15.2 million, representing a 29% sequential
 decline and a 44% decrease since the third quarter of 2000.
     "We successfully controlled spending and achieved our internal financial
 goals for the first quarter," said Aust.  "We will continue to closely manage
 our costs and improve the quality of our revenue stream as we drive toward
 positive gross margin and profitability."
     Net loss to common shareholders for the current quarter was $25.0 million
 or $(0.48) per fully diluted share, compared to $55.1 million or $(1.15) per
 fully diluted share in the previous quarter and $23.0 million, or $(0.50) per
 fully diluted share in the same quarter in 2000.
     Capital expenditures for the quarter were $3.2 million representing a 33%
 sequential decline and an 82% decrease since the third quarter of 2000.  This
 relates to the Company's decreased capital expenditure needs for network and
 systems.  Cash, cash equivalents and short-term investments (including
 restricted cash) on the balance sheet at the end of the first quarter was $49
 million.  The Company is now expected to be funded into early 2002.  The
 Company reduced its days sales outstanding for network services to 37 days,
 compared to 51 days in the fourth quarter of 2000.  The company ended the
 quarter with 402 employees compared to 456 at December 31, 2000.
     NAS will hold a conference call to discuss first quarter financial results
 April 26, 2001, at 11 a.m. EST.  The call can be accessed by dialing
 800-388-8975.  For international callers, the number is 973-694-2225.  A
 playback will be available from noon on April 26, 2001, until 11 p.m. on April
 29, 2001.  The dial-in number is 800-428-6051 or 973-709-2089 for
 international callers.  The passcode is 178089.
 
     About NAS
     Network Access Solutions is one of the nation's leading broadband
 solutions providers.  Founded in 1995, the company currently provides an
 expansive portfolio of broadband networking services in the Verizon region
 including DSL.  The Verizon region is home to 35% of the world's data
 communications traffic and the densest collection of businesses in the U.S.
     NAS gives customers access to a robust broadband services "bundle" which
 includes network consulting, integration, management, security services and
 DSL.  The NAS network supports traditional and packet-based services such as
 ATM, frame relay, and IP.  NAS' hallmark broadband service -- CopperNet(R) --
 provides high-speed, "always on" local, metropolitan and wide-area
 connectivity.  CopperNet is a seamless, cost-effective replacement for
 traditional T-1 and ISDN lines, and can deliver substantial savings to
 business customers in local facilities expenses, depending upon their
 requirements.  For more information, visit the company's web site at
 http://www.nas-corp.com .
 
     This press release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
 the Securities Exchange Act of 1934, as amended.  These statements are subject
 to a variety of risks and uncertainties, many of which are beyond the
 Company's control, which could cause actual results to differ materially from
 those contemplated in these forward-looking statements.  In particular, the
 risks and uncertainties include those described under "Risk Factors" in NAS'
 June 1999 IPO Prospectus, most recent10K and other periodic SEC filings, and
 other related risks and uncertainties which include, among other things, (i)
 the Company's ability to successfully market its services to current and new
 customers; (ii) the extent of increasing competition; (iii) trends in
 regulatory, legislative and judicial developments; (iv) the Company's ability
 to manage growth of its operations; (v) the Company's ability to secure
 additional sources of financing; (vi) the Company's ability to reduce
 operating expenses; (vii) the Company's ability to continue to comply with the
 listing standards of the Nasdaq Stock Market; and (viii) acquisitions
 involving the Company which may disrupt the business and be dilutive to our
 existing stockholders.  Existing and prospective investors are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  The Company undertakes no obligation to update or
 revise the information contained in this press release, whether as a result of
 new information, future events or circumstances or otherwise.
 
                              Network Access Solutions
                        Consolidated Statement of Operations
                                    (Unaudited)
                     ($ in 000's, except per share information)
 
                                                Three Months Ended
                                    March 31,      December 31,     March 31,
                                       2001            2000           2000
     Revenue:
     Product sales and
      consulting services             $3,204          $4,244        $4,742
     Network services                  4,660           3,457         1,684
     Total revenue                     7,864           7,701         6,426
 
     Operating expenses:
     Product sales and consulting
       services costs (exclusive of
       depreciation and amortization
       presented below)                2,605           4,684         4,056
     Network services costs
      (exclusive of depreciation
       and amortization
       presented below)                6,488           6,108         3,981
     Selling, general and
      administrative                  13,951          18,415        14,930
     Amortization of deferred
      compensation on stock options      866           2,073         1,699
     Depreciation and amortization     7,887           7,060         3,868
     Total operating expenses         31,797          38,340        28,534
 
     Loss from Operations            (23,933)        (30,639)      (22,108)
 
     Interest income                     941           1,426         1,143
     Interest expense                 (1,017)         (1,199)         (769)
     Follow-on offering                    -               -          (574)
 
     Net Loss                        (24,009)        (30,412)      (22,308)
 
     Preferred stock dividends
      and accretion                    1,309           2,502           698
     Preferred stock conversion
      inducement (credit) charge       (300)          22,141             -
 
     Net Loss applicable to
      common stockholders           $(25,018)       $(55,055)     $(23,006)
     Basic and Diluted
      Earnings Per Share              $(0.48)         $(1.15)       $(0.50)
     Weighted Average Shares
      Outstanding                 52,338,651      47,951,084    45,968,517
     Other Data:
     EBITDA(1)                      $(15,180)       $(21,506)     $(16,541)
 
     (1) EBITDA is defined as earnings (losses) before interest, taxes,
         depreciation, amortization, non-cash stock based compensation and
         other non-operating income or expenses.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X50987899
 
 

SOURCE Network Access Solutions Corporation
    HERNDON, Va., April 26 /PRNewswire/ -- Network Access Solutions
 Corporation (NAS) (Nasdaq: NASC), one of the nation's leading broadband
 solutions providers for businesses, today announced financial results and
 operating metrics for the first quarter ended March 31, 2001.
     Network services revenues increased 35% sequentially and 177% from the
 first quarter of 2000.  Sales were $4.7 million compared to $3.5 million in
 the previous quarter and $1.7 million in the first quarter of 2000.
     "Our strong performance from our network services business this quarter
 was due primarily to changes we have made to our business over the past
 several months," said NAS CEO Jon Aust.  "Late last year, we made significant
 improvements to our operations, and we have increased revenues by installing
 lines faster. Many of our larger enterprise customers continue to add more
 lines and higher margin services, and we continue to add business from new
 enterprise customers.  We've also begun to benefit from price increases we
 implemented last quarter and this quarter and are generating revenues from
 installations."
     "In addition, market consolidation late in the first quarter contributed
 to a significant number of new orders and we began charging for some equipment
 sales to new customers at the very end of March.  We expect to benefit from
 this additional revenue next quarter," added Aust.
     Total lines billed as of March 31, 2001, reached 12,776 compared to 9,814
 in the fourth quarter of 2000.
     "ARPU for new billable lines added in the first quarter continued to trend
 upward, reaching $161 in the first quarter compared to $138 in the fourth
 quarter of 2000," commented Aust.  "We are tracking to our plan to gain higher
 value and margin business."
     Product and integration revenues were $3.2 million for the quarter
 compared to $4.2 million in the previous quarter and $4.7 million in the first
 quarter of 2000.  This decrease was due to lower than expected equipment
 spending from the company's larger enterprise customers.  This is a low margin
 product line of the company and the revenue is expected to continue at this
 reduced rate for the foreseeable future.
     As a result of continuing cost reductions, SG&A expenses for the quarter
 decreased to $14.0 million, representing a 24% sequential decline and a 42%
 decrease since the third quarter of 2000.
     Earnings before interest, taxes, depreciation and amortization (EBITDA)
 loss in the quarter decreased to $15.2 million, representing a 29% sequential
 decline and a 44% decrease since the third quarter of 2000.
     "We successfully controlled spending and achieved our internal financial
 goals for the first quarter," said Aust.  "We will continue to closely manage
 our costs and improve the quality of our revenue stream as we drive toward
 positive gross margin and profitability."
     Net loss to common shareholders for the current quarter was $25.0 million
 or $(0.48) per fully diluted share, compared to $55.1 million or $(1.15) per
 fully diluted share in the previous quarter and $23.0 million, or $(0.50) per
 fully diluted share in the same quarter in 2000.
     Capital expenditures for the quarter were $3.2 million representing a 33%
 sequential decline and an 82% decrease since the third quarter of 2000.  This
 relates to the Company's decreased capital expenditure needs for network and
 systems.  Cash, cash equivalents and short-term investments (including
 restricted cash) on the balance sheet at the end of the first quarter was $49
 million.  The Company is now expected to be funded into early 2002.  The
 Company reduced its days sales outstanding for network services to 37 days,
 compared to 51 days in the fourth quarter of 2000.  The company ended the
 quarter with 402 employees compared to 456 at December 31, 2000.
     NAS will hold a conference call to discuss first quarter financial results
 April 26, 2001, at 11 a.m. EST.  The call can be accessed by dialing
 800-388-8975.  For international callers, the number is 973-694-2225.  A
 playback will be available from noon on April 26, 2001, until 11 p.m. on April
 29, 2001.  The dial-in number is 800-428-6051 or 973-709-2089 for
 international callers.  The passcode is 178089.
 
     About NAS
     Network Access Solutions is one of the nation's leading broadband
 solutions providers.  Founded in 1995, the company currently provides an
 expansive portfolio of broadband networking services in the Verizon region
 including DSL.  The Verizon region is home to 35% of the world's data
 communications traffic and the densest collection of businesses in the U.S.
     NAS gives customers access to a robust broadband services "bundle" which
 includes network consulting, integration, management, security services and
 DSL.  The NAS network supports traditional and packet-based services such as
 ATM, frame relay, and IP.  NAS' hallmark broadband service -- CopperNet(R) --
 provides high-speed, "always on" local, metropolitan and wide-area
 connectivity.  CopperNet is a seamless, cost-effective replacement for
 traditional T-1 and ISDN lines, and can deliver substantial savings to
 business customers in local facilities expenses, depending upon their
 requirements.  For more information, visit the company's web site at
 http://www.nas-corp.com .
 
     This press release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
 the Securities Exchange Act of 1934, as amended.  These statements are subject
 to a variety of risks and uncertainties, many of which are beyond the
 Company's control, which could cause actual results to differ materially from
 those contemplated in these forward-looking statements.  In particular, the
 risks and uncertainties include those described under "Risk Factors" in NAS'
 June 1999 IPO Prospectus, most recent10K and other periodic SEC filings, and
 other related risks and uncertainties which include, among other things, (i)
 the Company's ability to successfully market its services to current and new
 customers; (ii) the extent of increasing competition; (iii) trends in
 regulatory, legislative and judicial developments; (iv) the Company's ability
 to manage growth of its operations; (v) the Company's ability to secure
 additional sources of financing; (vi) the Company's ability to reduce
 operating expenses; (vii) the Company's ability to continue to comply with the
 listing standards of the Nasdaq Stock Market; and (viii) acquisitions
 involving the Company which may disrupt the business and be dilutive to our
 existing stockholders.  Existing and prospective investors are cautioned not
 to place undue reliance on these forward-looking statements, which speak only
 as of the date hereof.  The Company undertakes no obligation to update or
 revise the information contained in this press release, whether as a result of
 new information, future events or circumstances or otherwise.
 
                              Network Access Solutions
                        Consolidated Statement of Operations
                                    (Unaudited)
                     ($ in 000's, except per share information)
 
                                                Three Months Ended
                                    March 31,      December 31,     March 31,
                                       2001            2000           2000
     Revenue:
     Product sales and
      consulting services             $3,204          $4,244        $4,742
     Network services                  4,660           3,457         1,684
     Total revenue                     7,864           7,701         6,426
 
     Operating expenses:
     Product sales and consulting
       services costs (exclusive of
       depreciation and amortization
       presented below)                2,605           4,684         4,056
     Network services costs
      (exclusive of depreciation
       and amortization
       presented below)                6,488           6,108         3,981
     Selling, general and
      administrative                  13,951          18,415        14,930
     Amortization of deferred
      compensation on stock options      866           2,073         1,699
     Depreciation and amortization     7,887           7,060         3,868
     Total operating expenses         31,797          38,340        28,534
 
     Loss from Operations            (23,933)        (30,639)      (22,108)
 
     Interest income                     941           1,426         1,143
     Interest expense                 (1,017)         (1,199)         (769)
     Follow-on offering                    -               -          (574)
 
     Net Loss                        (24,009)        (30,412)      (22,308)
 
     Preferred stock dividends
      and accretion                    1,309           2,502           698
     Preferred stock conversion
      inducement (credit) charge       (300)          22,141             -
 
     Net Loss applicable to
      common stockholders           $(25,018)       $(55,055)     $(23,006)
     Basic and Diluted
      Earnings Per Share              $(0.48)         $(1.15)       $(0.50)
     Weighted Average Shares
      Outstanding                 52,338,651      47,951,084    45,968,517
     Other Data:
     EBITDA(1)                      $(15,180)       $(21,506)     $(16,541)
 
     (1) EBITDA is defined as earnings (losses) before interest, taxes,
         depreciation, amortization, non-cash stock based compensation and
         other non-operating income or expenses.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X50987899
 
 SOURCE  Network Access Solutions Corporation