Interland Announces Financial Results

Interland, Inc. (www.interland.com), a provider of business-class Web hosting and online services to small and medium sized enterprises (SMEs), today announced its' financial results for its' first fiscal quarter of 2005 ended on November 30, 2004.

The company reported revenues for the quarter of $23.1 million and a net loss of $3.2 million, or $0.20 per share. EBITDA from continuing operations(1) for the first quarter was positive $2.0 million, and capital expenditures were $0.8 million.

Allen L. Shulman, Interland's Senior Vice-President and Chief Financial Officer stated, "This quarter's results reflect encouraging progress as we exceeded announced expectations of positive EBITDA for the second consecutive quarter.

Our average monthly negative net MRC change(2), which was $115,000 for the fourth quarter of 2004, was reduced by 33% this first quarter of fiscal 2005, to just $77,000.

We also reduced the gross churn in our shared line of business to an average of just 2.5% per month, reflecting continuing improvement from the 2.8% level in the previous quarter.

At the same time total operating costs and expenses have been reduced by 22% from the same quarter last year, and our net loss per share has been reduced by 62% over the same period."

As of November 30, 2004, Interland's cash and investment position, which includes cash and equivalents of $23.2 million, short-term unrestricted investments of $3.0 million and restricted investments of $10.3 million, was $36.5 million.

Joel Kocher, Interland's Chairman and Chief Executive Officer stated, "We are pleased to report that both our product and distribution growth initiatives for fiscal-year 2005 are on track.

In Q1, we launched MyEzClicks(TM), which provides subscribers guaranteed web traffic to their website. The sales of this new product were strong, and strengthened throughout the quarter. We have several additional products slated for introduction this year.