Florida Digital Network wins $35M from an investment group led by MC Ventures Partners, allowing it to eliminate its bank debt

August 15, 2002

2 Min Read

ORLANDO, Fla. -- Florida Digital Network today announced that an investment group led by MC Ventures Partners has invested $35 million in the company, allowing it to retire its bank debt and continue aggressively pursuing sales and expansion efforts in Florida's major markets. CEO Mike Gallagher said Florida Digital would seek to capitalize on current market conditions that have seen a number of struggling telecom carriers quit markets throughout the state. The new investment comes at a period of widespread credit tightening in the telecom industry, further exacerbated by the recent filing of WorldCom for Chapter 11 bankruptcy protection. The new investment, Gallagher said, means that Florida Digital will no longer have to make bank interest payments and further demonstrates the confidence that the company's backers have in Florida Digital's long-term prospects, despite the uncertainty faced by many other companies in the telecom industry. "This new investment is more than a vote of confidence in the job Florida Digital's managers and employees have already done. We've proven that our original business plan and the strict adherence to the benchmarks laid down in that plan is a formula for success," Gallagher said. "Now our investors are telling us that they want us to go and exploit the opportunities presented to us by the current conditions in the marketplace. We've seen some of our competitors leave the business and, quite frankly, we don't want to see their customers going back to the higher prices charged by the incumbent carriers." Gallagher also announced that the privately owned Florida Digital became "cash-flow positive" in June 2002, meaning that the company's monthly income from operations now exceeds its outgoing spending for salaries and other expenses. The achievement of cash-flow positive status occurred two months ahead of what was called for in the company's original business plan. The company has seen revenue grow from $2.5 million in 1999 to $43 million in 2001. The company estimates that 2002 revenues will exceed $70 million. Gallagher added that Florida Digital continues to be on track to have positive net income by the end of the year. Florida Digital Network Inc.

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