New Edge Achieves Free Cash Flow

New Edge Networks now generated positive cash flow of $7.5M in June 2003, for the first time since the company was formed four years ago

August 5, 2003

2 Min Read

VANCOUVER, Wash. -- New Edge Networks, a national business broadband connections provider, today announced it is generating more money than it spends in a month, achieving a significant business financial milestone for the first time since the company was formed four years ago.

Despite a severe economic slump and a telecom industry that transformed from paradise to wasteland, privately-owned New Edge Networks achieved positive cash flow on $7.5 million in top-line revenue for June 2003, a month ahead of its projection. Because a significant portion of New Edge Networks' revenue is monthly recurring, the company expects to easily continue producing surplus cash, or free cash flow, month-to-month moving forward.

"With growing demand for business broadband services, we expect to continue growing our cash flow through the rest of the year and use it to help fund future growth and acquisitions that can add to our financial strength," said Dan Moffat, president and CEO of New Edge Networks.

Free cash flow means a company is self-funded with money left over after it pays its employees and bills, invests capital in new equipment, and fulfills current debt obligations. It is a closely-watched indicator of a company's financial strength.

"We intend to remain focused on providing quality business broadband access solutions at the 'edge' of the network," Moffat said. "Businesses have increasing demand for broadband networks at a time of great telecom complexity. They want networks that are cost effective, support their business goals, and stay up. New Edge Networks delivers business broadband solutions that cross multiple geographies, carriers, and technologies at price points based on the customers' requirements."

Strong recurring revenue growth from growing business broadband sales, effective expense management, and a low debt structure enabled New Edge Networks to achieve positive cash flow as originally projected four years ago for its principal investors, which include Goldman, Sachs & Co. as well as venture firms Accel Partners, Crosspoint Venture Partners, and Greylock.

"Clearly, New Edge Networks has demonstrated an uncanny ability to stay focused and execute its plan for meeting or exceeding financial targets in spite of economic and industry hardships, " said David Sze, a partner with Greylock, and a member of the New Edge Networks board of directors. "This company is well positioned to capitalize on broadband opportunities, especially as overall market conditions improve."

New Edge Networks derives its revenue from three lines of broadband business. These include broadband DSL service in more than 360 small cities and towns in 29 states, dedicated high-speed Internet access in 30 major metropolitan areas, and wide area network and data communications services nationally.

New Edge Networks Inc.

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