Company Name: Internap Network Services Corporation
Stock Market: NASDAQ (INAP)
Industry Sector: Computer Programming, Data Processing, Etc.
Market Capitalisation: $115.5 million (as of December 15, 2008)
Yearly Revenue: $234.1 million (as of December 2007)
Operating Income: $9.7 million (loss) (as of December 2007)
Net Income: $5.6 million (loss) (as of December 2007)
Total Assets: $427.0 million (as of December 2007)
Key People: George Kilguss (Vice President and Chief Financial Officer), Richard Dobb (Chief Administrative Officer, General Counsel), Philip Kaplan (Chief Strategy Officer), Tim Sullivan (Chief Technology Officer), James DeBlasio (President, Chief Executive Officer, Director)
Headquarters Address: 250 Williams Street Atlanta, Georgia
Number of Employees: 420 (as of December 31, 2007)
Website Address: www.internap.com
Company Overview
Internap Network Services Corporation (the “Company” or “Internap”) was incorporated in 1996 as a Washington corporation and reincorporated in 2001 in Delaware. The Company markets services and products that optimise the reliability and performance of tactical business Internet applications for customer relationship management, e-commerce, multimedia streaming, Voice-over Internet-Protocol, supply chain management, and virtual private networks. Internap’s service and product offerings are balanced by value-added services like collocation and data centre services, and controlled security services.
Internap also provides services and products for delivering and storing video and audio digital media to huge audiences through the Internet by VitalStream Holdings, Inc. (“VitalStream”), the Company’s subsidiary. The Company’s content delivery network was purposely made for streaming digital media which also allows content owners to monetise their digital media resources through both subscription- and advertising-based business models. The Company’s VitalStream subsidiary also provides proprietary advertising insertion and selection capabilities, allowing customers to change existing streaming traffic into content packaged along with advertising, professional services, small business services, and Internet Protocol Television. In addition, Internap provides high levels of pre-installation and post-installation consulting and service.
Internap believes that its unique handled multi-network approach offers better performance, reliability, and control compared to typical Internet connectivity options. The Company’s service level arrangements assure performance throughout the entire Internet within the United States, but not including local connections, while suppliers of conventional Internet connectivity usually only guarantee the performance on their own network.
Current Financial Overview
Internap completed its acquisition of VitalStream on February 20, 2007, in connection to an Agreement and Plan of Merger that was dated on October 12, 2006. Consequently, the Company issued almost 12.2 million common stock shares to VitalStream stockholders that represented about 25% of Internap’s outstanding shares. The Company assumed outstanding alternatives for the acquisition of VitalStream’s shares of common stock that Internap converted into alternatives to purchase almost 1.5 million shares of the Company’s common stock.
By March 31, 2007, Internap incurred an impairment and restructuring charge that amounted $10.3 million. The said charge was the outcome of a review of the Company’s business, especially in light of its VitalStream acquisition, and the finalisation of the overall implementation and integration plan in the first quarter.
The charge contained $1.1 million in severance payments for the termination of some Internap employees and the impairment of assets of $1.4 million. Associated expenditures were approximately $10.7 million, of which $2.8 million was paid in the fiscal year ended December 31, 2007, and the balance will continue through to December 2016, the longest lease term’s last date.
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