Early Bird Special (EBS)

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FTGX cash flow positive.. (COMTEX) B: FiberNet Reports Fourth Quarter and Full Year 2004 Results - F
urth Quarter of 2004 Revenues Increase 15.5% Over Com
B: FiberNet Reports Fourth Quarter and Full Year 2004 Results - Fourth Quarter o
2004 Revenues Increase 15.5% Over Comparable Period in 2003 - ( PRNewswire-Firs
Call )

NEW YORK, March 30, 2005 /PRNewswire-FirstCall via COMTEX/ -- FiberNet Telecom
Group, Inc. (Nasdaq: FTGX), a leading provider of metropolitan data services,
today announced its results for the fourth quarter and fiscal year ended
December 31, 2004. FiberNet has now produced increases in revenues in the last
nine consecutive quarters. The Company also generated $3.3 million in positive
cash flow from operations for fiscal 2004.

Revenues for the fourth quarter of 2004 increased to $8.2 million, up 0.6% from
$8.1 million for the third quarter of 2004 and up 15.5% from $7.1 million for
the fourth quarter of 2003. FiberNet also experienced revenue growth in its core
product offerings of transport and colocation services. For the fourth quarter
of 2004, revenues from transport and colocation services (excluding revenues
from access management services) grew by 0.9% over the third quarter of 2004 and
by 16.8% over the fourth quarter of the prior year.

Transport services remain the most significant component of FiberNet's revenues,
accounting for 72.4% of the total revenues generated in the fourth quarter of
2004. On-net transport revenues were 58.0%, and off-net transport revenues were
14.4%. Colocation services and access management services represented 20.2% and
7.4% of revenues, respectively. FiberNet's number of customers also increased to
213 as of December 31, 2004, up from 152 at the end of the fourth quarter of
2003 and 198 at the end of the third quarter of this year.

For the full year 2004, revenues were $34.6 million, up 30.0% from $26.6 million
in 2003. An arbitration settlement received in the beginning of 2004 accounted
for $2.7 million, or 7.9%, of the total revenue for the year. Excluding this
settlement, core revenues from transport and colocation services grew by 9.8%
over 2003. For the full year 2004, on-net transport, off-net transport,
colocation and access management services represented 56.2%, 10.6%, 26.3% and
6.9% of total revenues, respectively.

Jon A. DeLuca, President and Chief Executive Officer, stated, "We finished 2004
on a strong note. Last year proved to be an exciting time for FiberNet. We
completed the acquisition of Gateway Colocation, greatly expanding our data
center and colocation presence in the New York metropolitan market, and this
transaction has proven to be a valuable addition to our portfolio of network
assets. We also launched our new optical Ethernet and IP MPLS metro network,
enabling us to provide emerging data services to our customers."

"Most notably, we announced that FiberNet entered into an agreement to acquire
Con Edison Communications. We are on track to obtain the regulatory approvals
that are necessary to consummate the acquisition, and we have been extensively
engaged in integration planning to ensure the continuity of the high levels of
service that both companies provide their customers and to realize the synergies
and cost savings that made this opportunity so attractive to us. As we approach
the closing of the transaction, we continue to believe that the combination of
FiberNet and Con Edison Communications will be a powerful data service provider
in our sector, with great strengths in both the enterprise and service provider
marketplaces."

"Our successful commitment to customer service can be attributed to the
flexibility, innovation and reliability we deliver in meeting our customers'
needs in the complex metro networking environment," Mr. DeLuca added. "We added
15 new customers in the fourth quarter to total 213 at the end of 2004, up from
152 at the beginning of the year. We continue to be successful in developing the
international segment of our customer base. In the past few months, we announced
several significant developments on this front. BT Infonet selected us to
provide 2.5 gigabit optical wavelength services to support its network
expansion. BT Americas expanded its agreement for additional colocation,
transport, and interconnection services at the 60 Hudson Street Meet-Me-Room,
and Swisscom selected our Dynamic Gateway service for the optical conversion and
distribution of its international traffic in New York City."

EBITDA (as defined) for the fourth quarter of 2004 was $0.3 million, down from
$0.6 million reported in third quarter of 2004. EBITDA (as defined) for the
fourth quarter of 2003 was $8,000.

For the full year 2004, EBITDA (as defined) was $5.4 million, or $2.4 million
excluding the arbitration settlement recorded in the first quarter of 2004.
EBITDA (as defined) for 2003 was $2.1 million. Excluding the settlement, the
annual increase in EBITDA (as defined) was 14.7%.

The Company presents the financial metric EBITDA (as defined) because it is
utilized in the determination of the majority of the financial covenants in its
credit agreement, and the metric is calculated in accordance with its credit
agreement. As of December 31, 2004, FiberNet was in full compliance with all of
the financial covenants in its credit agreement.

FiberNet generated positive cash flow from operations of $3.3 million for the
full year 2004. Capital expenditures for the year were $3.5 million.

The net loss applicable to common stockholders for the fourth quarter of 2004
was $(2.5) million, or $(0.05) per share, compared to $(2.3) million, or $(0.04)
per share, for the third quarter of 2004. The net loss applicable to common
stockholders for the fourth quarter of 2003 was $(12.5) million, or $(0.31) per
share. For the full year 2004, FiberNet's net loss applicable to common
stockholders was $(18.4) million, or $(0.37) per share, compared to $(27.8)
million in 2003, or $(0.75) per share.

Cost of services for the fourth quarter of 2004 was $3.8 million, compared to
$3.7 million for the third quarter of 2004 and $2.6 million for the fourth
quarter of 2003. Cost of services for the full year 2004 was $13.8 million,
compared to $8.8 million in 2003. These increases were due, in part, to
increased off-net connectivity costs from the Company's Network Solutions
initiative. The cost of services related to the Company's acquisition of Gateway
Colocation was also consolidated beginning in the first quarter of 2004 and
accounted for $1.5 million in 2004.

Selling, general and administrative expenses for the fourth quarter of 2004 were
$4.1 million, compared to $3.9 million in the third quarter of 2004, and $5.0
million in the fourth quarter of 2003. Selling, general and administrative
expenses for the full year 2004 were $16.0 million, compared to $16.4 million in
2003.

Capital expenditures for the fourth quarter of 2004 were $1.3 million, compared
to $1.0 million in the third quarter and $0.6 million in the fourth quarter of
last year. For the full year 2004, capital expenditures were $3.5 million,
compared to $2.4 million recorded in 2003. During the fourth quarter FiberNet
started construction on the second phase of the 60 Hudson Street Meet-Me-Room
which accounted for $0.5 million, and the majority of the Company's remaining
capital expenditures were for the implementation of customer orders. Capital
expenditures for general network improvements accounted for 29.5% of the total
in 2004.

As of December 31, 2004, FiberNet had total assets of $87.7 million and total
stockholders' equity of $59.2 million. As of March 26, 2005, the Company had
approximately 51.0 million shares of common stock outstanding, or 60.5 million
shares of common stock outstanding on a fully-diluted basis, assuming the
exercise of all outstanding options and warrants. Of the approximately 9.5
million outstanding options and warrants, 7.0 million are out-of-the-money as of
March 26, 2005.

FiberNet Teleconference:

FiberNet will hold a teleconference today, Wednesday, March 30, 2005, at 11:00
a.m. EST. To participate in the teleconference please call: 800-299-0148 and
enter pass code 94480410, and from outside the U.S. call 617-801-9711 and enter
the pass code.

A replay of the teleconference will be available beginning March 30, 2005 at
1:00 p.m. EST through April 13, 2005. To listen to the replay by phone, call
888-286-8010 and enter pass code 45905315, and from outside the U.S. call
617-801-6888 and enter the pass code.

About FiberNet:

FiberNet Telecom Group, Inc. deploys, owns and operates fiber-optic networks in
the two gateway markets of New York/New Jersey and Los Angeles, designed to
provide comprehensive broadband connectivity to other telecommunications service
providers and enterprise customers for data, voice and video transmissions.
FiberNet's networks provide an advanced, high bandwidth, fiber-optic solution to
support the demand for network capacity and to facilitate the interconnection of
multiple carriers' and customers' networks. For additional information about
FiberNet, visit the Company's website at http://www.ftgx.com.

Financial Information and Forward Looking Statements:

This partial discussion of the statements of financial condition and operations
of the Company should be read in conjunction with the consolidated financial
statements and related notes contained in the Company's annual report on Form
10-K for the year ended December 31, 2004 to be filed with the Securities and
Exchange Commission.

Investors are cautioned that EBITDA (as defined) is not a financial measure
under generally accepted accounting principles. EBITDA (as defined) is defined
as net loss before income taxes, net interest expense, depreciation and
amortization, stock related expense and other non-cash or non-recurring charges.
The Company does not, nor does it suggest investors should, consider such a
non-GAAP financial measure in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. EBITDA (as defined) should not be
construed as an alternative to operating income or cash flows from operating
activities, both of which are determined in accordance with GAAP, or as a
measure of liquidity. Because it is not calculated under GAAP, FiberNet's EBITDA
(as defined) may not be comparable to similarly titled measures used by other
companies. EBITDA (as defined) is commonly used in the communications industry
and by financial analysts, and others who follow the industry, as a measure of
operating performance. The Company believes that it is appropriate to present
this financial measure because certain of the financial covenants in the
Company's credit agreement are based upon it.

Various remarks about the Company's future expectations, plans and prospects
constitute forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. Such remarks are
valid only as of today, and the Company disclaims any obligation to update this
information. Actual results may differ materially from those indicated by these
forward-looking statements as a result of various important factors, including
those discussed in the Company's most recent Annual Report on Form 10-K, to be
filed with the Securities and Exchange Commission.


Reconciliation of Non-GAAP Financial Metric:

Consolidated Financial Data
(in thousands)
(unaudited)
Three months Ended
-------------------------------------------
December 31, December 31, September 30,
2004 2003 2004
------------- ------------- -------------
Calculation of EBITDA
(as defined):

Net loss $ (2,492) $ (12,497) $ (2,293)

Plus:
Operating expenses:
Stock related expense
for selling, general,
and administrative matters 129 133 130
Impairment of property,
plant and equipment (1) -- 1,544 129
Depreciation and
amortization 2,213 2,238 2,192
Impairment of goodwill -- 7,509 --
Legal settlement expenses
(included in selling,
general, and administrative
expenses) -- 495 --
Interest expense, net 454 586 444

-------- -------- --------

EBITDA (as defined) $ 304 $ 8 $ 602


Consolidated Financial Data
(in thousands)

Year ended December 31,
------------------------
2004 2003
------------ ----------
Calculation of EBITDA (as defined):

Net loss $(18,394) $ (27,775)

Plus:
Operating expenses:
Stock related expense for selling,
general, and administrative matters 518 222
Impairment of property, plant and
equipment (1) 9,603 1,544
Impairment of goodwill 2,309 7,509
Depreciation and amortization 9,013 8,840
Loss on early extinguishment of debt -- 8,951
Lease cancellation expense
(included in selling, general, and
administrative expenses) 405 --
Legal settlement expenses
(included in selling, general, and
administrative expenses) -- 495
Interest expense, net 1,902 2,296
--------- ---------

EBITDA (as defined) $ 5,356 $ 2,082

(1) Excludes recoveries from previously impaired property, plant and
equipment.


FIBERNET TELECOM GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

Year Ended Three Months Ended
December 31, December 31,
(Audited) (Unaudited)
2004 2003 2004 2003

Revenues $34,579 $26,604 $8,200 $7,097
Operating expenses:
Cost of services
(exclusive of items
shown separately below) 13,776 8,806 3,776 2,597
Selling, general and
administrative expense
excluding stock
related expense 15,986 16,409 4,119 4,995
Stock related expense
for selling, general, and
administrative matters 518 222 129 133
Impairment of property,
plant and equipment 9,468 1,346 - 1,536
Impairment of goodwill 2,309 7,509 - 7,509
Depreciation and
amortization 9,013 8,840 2,213 2,238
Total operating expenses 51,070 43,132 10,237 19,008
Loss from operations (16,491) (16,528) (2,037) (11,911)
Loss on early extinguishment
of debt - (8.951) - -
Interest expense, net 60 46 23 24
Interest expense, net (1,963) (2,342) (478) (610)
Net loss $(18,394) $(27,775) $(2,492) $(12,497)
Net loss per share -
basic and diluted $(0.37) $(0.75) $(0.05) $(0.31)
Weighted average common shares
outstanding -
basic and diluted 50,179 37,192 50,997 40,680


FIBERNET TELECOM GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

December 31, December 31,
2004 2003
ASSETS
Current Assets:
Cash and cash equivalents $2,909 $3,488
Restricted cash 1,881 2,337
Accounts receivable, net of allowance
of $749 and $721 at December 31,
2004 and 2003, respectively 4,275 3,785
Prepaid expenses and other 676 754
Total current assets 9,741 10,364
Property, plant and equipment, net 74,123 86,958
Other Assets:
Deferred charges, net of accumulated
amortization of $1,860 and $1,402 at
December 31, 2004 and 2003, respectively 2,292 2,035
Other assets 1,569 261
Total other assets 3,861 2,296
TOTAL ASSETS $87,725 $99,618
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $4,409 $3,598
Accrued expenses 3,805 5,138
Deferred revenues-current portion 3,427 4,584
Notes payable-current portion 6,182 1,795
Total current liabilities 17,823 15,115
Long-Term Liabilities:
Notes payable, less original issue
discount of $1,598 and $2,308 at
December 31, 2004 and 2003, respectively 7,405 18,330
Deferred revenue, long term 3,261 1,439
Total Long Term Liabilities 10,666 19,769
Total liabilities 28,489 34,884
Commitments and contingent liabilities (Note 8)
Stockholders' Equity:
Common stock, $.001 par value,
2,000,000,000 shares authorized and
50,989,572 and 40,540,334 shares issued
and outstanding at December 31, 2004 and
2003, respectively 51 41
Additional paid-in-capital and other 444,429 429,991
Deferred compensation (4,443) (4,797)
Deferred rent (warrants) (1,906) -
Accumulated deficit (378,895) (360,501)
Total stockholders' equity 59,236 64,734
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $87,725 $99,618


FIBERNET TELECOM GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Year Ended December 31,
2004 2003 2002
Cash flows from operating activities:
Net loss $(18,394) $(27,775) $(37,448)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 9,013 8,840 10,346
Preferred stock dividends - - 44
Stock related expense for
selling, general and
administrative matters 518 222 225
Impairment of property,
plant and equipment 9,468 1,346 13,175
Impairment of goodwill 2,309 7,509 -
Loss on early extinguishments
of debt - 8,951 7,859
Non-cash interest expense
capitalized on notes payable - 663 5,421
Other non-cash expenses 1,098 977 1,418
Change in assets and liabilities:
Increase in accounts receivable (589) (1,020) (556)
Decrease (increase) in
prepaid expenses 78 217 (270)
(Increase) decrease in
other assets (939) (4) 37
Increase (decrease) in
accounts payable 1,071 (353) (2,882)
(Decrease) increase in
accrued expenses (1,010) 1,067 (416)
Increase (decrease) in
and deferred revenue 665 1,410 (1,459)
Cash provided by (used in)
operating activities 3,288 2,050 (4,506)

Cash flows from investing activities:
Acquisition of Gateway Colocation (382) - -
Recovery on sale of impaired assets 135 198 -
Decrease (increase) in
restricted cash 456 (2,337) -
Capital expenditures (3,524) (2,388) (2,453)
Cash used in investing activities (3,315) (4,527) (2,453)

Cash flows from financing activities:
Payment of financing costs
of debt financings (807) (428) (70)
Repayment of notes payable (7,225) - -
Proceeds from debt financing - - 2,307
Payment of financing costs of
equity financings (520) (810) (378)
Proceeds from subordinated
note payable - - 2,000
Proceeds from issuance of
equity securities 8,000 3,500 3,800
Repayment of capital lease
obligation - (85) (250)
Cash (used in) provided from
financing activities (552) 2,177 7,409

Net (decrease) increase in cash
and cash equivalents (579) (300) 450
Cash and cash equivalents at
beginning of year 3,488 3,788 3,338
Cash and cash equivalents at
end of year $2,909 $3,488 $3,788
Supplemental disclosures of
cash flow information:
Interest paid $863 $563 $35
Non-cash financing activities:
Conversion of accrued interest
into common stock - - 2,000
Conversion of accrued interest
into notes payable - - 3,522
Conversion of notes payable
into common stock - 13,382 66,000
Conversion of subordinated
note payable into common stock - - 2,080
Conversion of note payable-
affiliate into common stock - - 450
Conversion of series H preferred
stock into common stock - - 17,127
Conversion of series J preferred
stock into common stock - - 1,363

SOURCE FiberNet Telecom Group, Inc.


CONTACT: Jon A. DeLuca, President, Chief Executive Officer of FiberNet
Telecom Group, Inc.,
[phone], [e-mail]

URL: http://www.prnewswire.com
http://www.ftgx.com
www.prnewswire.com

Copyright (C) 2005 PR Newswire. All rights reserved.

-0-


KEYWORD: New York
INDUSTRY KEYWORD: CPR
TLS
NET
SUBJECT CODE: ERN
CCA

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