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UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
January 31, 2000
INTERLIANT, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-26115 13-3978980
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
Two Manhattanville Road
Purchase, New York 10577
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(Address of principal executive offices) (Zip Code)
(914) 640-9000
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(Registrant's telephone number, including area code)
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ITEM 5: OTHER MATTERS
On January 31, 2000, we announced that we expect to report revenues of
more than $18.0 million and EBITDA losses of less than $8.8 million for the
fourth quarter of 1999. This compares with revenues of $2.3 million for the
fourth quarter of 1998 and $12.0 million for the third quarter of 1999. EBITDA
loss for the fourth quarter of 1998 and the third quarter of 1999 was $3.9
million and $8.2 million, respectively. We intend to report final results for
the fourth quarter and the year on February 17, 2000. We anticipate that our
results for the fourth quarter of 1999 and in the near term will reflect a
decrease in gross margin from prior periods primarily due to growth of our
professional services business, which has a lower gross margin than our
application hosting business, and the acquisition in November 1999 of Triumph
Technologies, which also has lower gross margins than our application hosting
business.
In January and February 2000, we raised $27.5 million in strategic
funding through equity investments by Dell Computer, Network Solutions and BMC
Software. In connection with these strategic investments, we signed alliance
agreements with Dell and BMC Software and extended our currently existing
alliance agreement with Network Solutions under which we and Network Solutions
offer and promote our respective products and services to each other's existing
and potential customers. Through our partnerships with Dell Computer and BMC
Software, we intend to leverage both companies' technology and expertise to
bring advanced Web-based products and services to market, such as Dell's
PowerEdge server and PowerVault storage products, and BMC Software's systems
management software and solutions, including its PATROL solutions suite, used to
monitor the applications we host for our customers. Finally, these two alliance
agreements call for us to work separately with Dell and BMC on additional
e-commerce opportunities. Under the terms of our agreement with Dell, Interliant
will provide certain services to Dell. As part of the deal, Dell has agreed to
sell its PowerEdge servers and PowerVault storage products to Interliant for use
in our hosting service. We have agreed to standardize BMC Software's monitoring
products to support our hosting platforms and customer premise servers. BMC
Software will also join us in co-marketing activities intended to promote our
respective products and services. We will also promote one another's products
and services to our respective current and potential customers. We anticipate
that these alliance agreements will result in significant potential revenues,
expenses, EBITDA losses and capital expenditures for the foreseeable future in
the expectation that eventually they will result in positive EBITDA and profits.
The foregoing is a forward-looking statement and is based on our current
business plan and the assumptions on which it is based.
On February 1, 2000, we announced that Mr. Herb Hribar will become our
Chief Executive Officer and a Director effective on or before February 15, 2000.
Mr. Hribar commenced serving in such capacities the week beginning January 31,
2000. Since July 1998, Mr.Hribar has been President and Chief Operating Officer
of Verio, Inc., a domain-based web hosting company. In connection with his
employment, we granted Mr. Hribar options to purchase 1,500,000 shares of common
stock at an average exercise price of approximately $18.00 per share. We
anticipate that this will result in a non-cash compensation charge to earnings
of approximately $30 million over the four-year vesting period of the options.
On February 2, 2000, we and @viso Limited, a company incorporated under
the laws of England and Wales and owned 50% by Softbank Holdings, Inc. and 50%
by Vivendi, S.A., agreed to form a Netherlands corporation, Interliant Europe,
B.V., to be owned 51% by us and 49% by @viso Limited. Through Interliant Europe,
we plan to launch Web hosting, application hosting and related services in
continental Europe. @viso Limited has loaned us the amount required to purchase
our equity interest in Interliant Europe (approximately $7.7 million). We have
also agreed to license some of our technology and intellectual property to and
to enter into a service agreement with Interliant Europe. The note is repayable
only upon sale of the business or the successful completion of a public offering
of securities by Interliant Europe. We intend to consolidate 100% of the results
of operations of Interliant Europe into our Consolidated Results of Operations.
We anticipate that those results of operations will involve substantial EBITDA
losses for the forseeable future. There is no requirement for us to provide any
further funding to Interliant Europe.
On February 7, 2000 we announced our intention to raise $125 million
(excluding any over-allotiments) through a rule 144a offering of convertible
subordinated notes. The notes will be convertible into shares of our common
stock at a conversion price to be determined.
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ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following exhibit is filed herewith:
99.3 Press release dated February 7, 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Interliant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 7, 2000
INTERLIANT, INC.
By: /s/ William A. Wilson
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William A. Wilson
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit
99.3 Press release dated February 7, 2000
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Exhibit 99.3
Interliant to Offer $125 Million of Convertible Notes
NEW YORK, February 7, /PRNewswire/ -- Interliant, Inc. (Nasdaq: INIT) today
announced its intention to raise $125 million (excluding any over-allotments)
through a 144A offering of convertible subordinated notes. The notes will be
convertible into shares of Interliant's common stock at a conversion price to be
determined.
Proceeds from the Rule 144A offering will be used to implement a number of sales
and marketing initiatives; strengthen our infrastructure, including by expanding
our data centers, developing new data centers and providing working capital in
order to accommodate future growth; identify and integrate additional
acquisitions; and fund other working capital and general corporate purposes.
The notes will not be registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent registration or an applicable
exemption from the registration requirements under such act.
About Interliant
Interliant, Inc. (Nasdaq: INIT) is a leading application service provider (ASP)
and pioneer in the ASP market. Interliant's solutions enable companies of all
sizes to capitalize on the latest Web-based technologies and packaged software
applications quickly and cost-effectively by relieving them of the burdens
associated with building, managing and maintaining the infrastructure required
to support mission-critical applications. Interliant's offerings include
solutions in the following areas: Web site hosting, messaging and knowledge
management, security, e-commerce, customer relationship management, distributed
learning, and Web-based rental applications via AppsOnline.com. Interliant is
headquartered in Purchase, N.Y. and has formed strategic alliances with leading
software, networking and hardware companies including Dell (Nasdaq: DELL), IBM
(NYSE: IBM), Lotus Development Corp., Microsoft (Nasdaq: MSFT), BMC Software
(Nasdaq:BMCS), and Network Solutions (Nasdaq: NSOL). For more information,
please visit the Interliant Web site, www.interliant.com. Interliant is a
registered trademark of Interliant, Inc. All other trademarks are the properties
of their respective companies.
This press release contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended. Any statements contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. Action results and the timing of certain events may differ
significantly from the results anticipated or discussed in the forward-looking
statements. These forward-looking statements are based largely on the Company's
current expectations and are subject to a number of risks and uncertainties. In
addition to this press release, other important factors to consider in
evaluating the forward-looking statements include, without limitation, those
discussed in the Company's Quarterly Report on Form 10-Q for the quarters ended
June 30, 1999 and Sept. 30, 1999, respectively, the Company's Registration
Statement on Form S-1 filed on March 15, 1999, as amended, and other filings by
the Company with the Securities and Exchange Commission. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained herein will in fact be realized and the Company assumes no obligation
to update this information.
SOURCE Interliant, Inc.
CONTACT: Lois Paul & Partners for Interliant Media Contact Joan Osleeb,
512/638-5303, email; [email protected] or Interliant, Inc. Investor Contact
Beth O'Byrne, 914/640-9000; email [email protected]
