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July 27, 2001 — (WEB HOST INDUSTRY REVIEW) — Micron Electronics, Inc. (micronelectronics.com), a leading provider of business-class Web hosting, today named the slate of officers it plans to propose to its board of directors to run the combined company after its planned acquisition of Interland (interland.com) is complete.
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Shareholders of both companies will vote on approval of the transaction on
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August 6, and the companies expect the transaction to close shortly
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thereafter. The new company will adopt the Interland name and be
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headquartered in Atlanta.
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“With only a couple of weeks to go before we bring these two companies
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together, I’m very excited to announce the line-up of seasoned professionals
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that will lead our company going forward,” said Joel J. Kocher, chairman and
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chief executive officer of Micron Electronics. “We believe this team has the
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experience and talent to drive the new Interland to leadership in the Web
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hosting industry, and that we have a very good shot at being the first
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public company in our space to reach cash-flow profitability,” said Kocher.
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The company has previously projected it will become EBITDA positive within
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12 months after the acquisition closes and free cash flow positive by three
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quarters following that.
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“Although the current financial outlook of a few players has created market
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uncertainty about the hosting sector, we think it’s clear that our business
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model and financial position make us very different from enterprise-focused
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players, who are staggering under debt burdens and data center
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over-capacity, and running out of cash. Our model is built on the efficiency
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and scalability of the shared hosting and standardized managed services
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market — which generates higher revenues and profit margins — and requires
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far less data center space. With very low debt, and three times the amount
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of cash we need to reach profitability, we’re positioned to win,” said
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Kocher.
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In its third quarter earnings announcement on June 21, 2001, the company
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projected that its net cash utilization for the combined companies will be
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between $65 million and $75 million before becoming cash flow positive. The
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company stated it believes that the combined company is more than fully
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funded, with about three times that amount currently available on a pro
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forma basis.
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In addition to Kocher, who will continue in the role of chairman and CEO,
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the senior management team will include: Ken Gavranovic, vice chairman and
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chief technology officer; David Buckel, senior vice president and chief
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financial officer; Mark Alexander, senior vice president of sales and
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marketing; Sid Ferrales, senior vice president and chief human resources
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officer; Garrett Mullins, vice president of sales; Tim Allaway, vice
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president of customer service and technical support; Cliff Luckey, vice
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president of engineering and data center operations; Nick Farsi, senior vice
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president and chief information officer; Barbara Gibson, vice president of
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public relations; and Steve Arnold, vice president and general counsel.
