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Interland, Inc. (www.interland.com), today announced financial results for its third fiscal quarter of 2004, ended on May 31, 2004.

The company reported revenues of $25.7 million for the quarter, a decrease of 1.3 percent from the prior quarter and 0.8 percent from the same quarter last year. Net loss from continuing operations was $81.2 million for the quarter equating to a loss of $5.07 per share on 16.0 million shares used in the per share calculation compared to a loss of $9.4 million or $0.58 per share the previous quarter and to a loss of $136.3 million, or $9.41 per share during the same quarter last year. Including discontinued operations, net loss for the quarter was $81.7 million, or $5.10 per share. EBITDA(1) loss from continuing operations was $74.0 million for the period. Consistent with generally accepted accounting principles, the company performed its annual impairment test, which resulted in the recognition of impairment charges and write downs of acquisition-related goodwill in the amount of $66.6 million, and other identifiable intangible assets of $7.0 million. Consequently, these results include unusual items totaling $75.2 million consisting of the $73.6 million in non-cash impairment and write down charges mentioned above, and $1.6 million in severance payments and accruals. Furthermore, the Company has now removed all goodwill from its balance sheet.

The Company also announced today that it had entered into a five-year arrangement with Advanta Bank Corp, the nation’s second largest issuer of business credit cards to small businesses, to market and promote website and online services and applications to small businesses across the country.

Joel Kocher, Interland Chairman and CEO said, “We are very excited that Advanta has agreed to become our first indirect channel partner. Advanta is exactly the right sort of partner to be able to extend our marketing reach to small businesses because of the work they have done to know and understand their customers and the needs of their businesses. Together we will be offering our suites of services and applications to those most likely to benefit from them”.

The company’s expectations for the fourth quarter are based largely on the continuation and improvement of the third quarter’s underlying EBITDA performance. Since the impairment and restructuring charges of $75.2 million will not recur next quarter, a continuation of the Company’s third quarter performance would contribute $1.1 million of positive EBITDA to the fourth quarter.

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