Troubled ISP Via Net.Works Inc is considering a wholesale restructuring of the company that could lead to the closing down or selling off of its operations in certain countries.
The Reston, Virginia-based company, which is suffering from an acquisition strategy that bloated its presence into 15 countries, said that in its fourth quarter ended December 31, it made a net loss of $133.8m on sales of $19.8m, compared to a $25.6m loss on sales of $26.9m a year ago.
Acting CEO Karl Maier - David D'Ottavio resigned in January, with company president Michael Simmons and CFO Catherine Graham following him out the door last month - admitted that 2001 had been "a disappointing year... both financially and operationally."
Although much of the loss stems from non-cash charge for the impairment of goodwill, its cash usage of $25.7m for the quarter needs to be addressed urgently if it is to remain trading.
The company stressed that it still has a very healthy balance sheet, which strangely it does. It did not have to incur any long-term debt to acquire 26 ISPs in 15 countries stretching from the US to Latin America and Europe, as it managed a successful IPO in 2000 when it raised $357m. At the end of 2001 it had cash remaining of $137.8m, but it is estimated that this has now dropped to $120.5m.
The company said it is considering all its options in its attempt to stop leaking cash and turn profitable, but was unable to project operating results beyond its first quarter of 2002, which has already closed.
Via Net.Works was also threatened by a possible delisting last month after its stock price traded under $1 for more than 30 days. If it doesn't rise above $1 for at least 10 consecutive trading days prior to June 19, Via Net.Works will be delisted from the Nasdaq National Market, though it can apply to be listed on the Nasdaq SmallCap Market. The company was once valued by the market at $1.2bn dollars, but is now worth less than $50m.
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