Monday February 19, 7:46 am Eastern Time

Company Press Release

North American DataCom Reports Second Quarter Results: Net Revenue and Development Expenses Up

IUKA, Miss.--(BUSINESS WIRE)--Feb. 19, 2001--North American DataCom, Inc. (OTC BB:NADA - news), the Fiber Optic and Data Storage Company, announced financial results for its second quarter ended December 31, 2000. For the six-month period ended December 31, 2000, the Company reported revenues from its startup ISP and paging services of $156,373, an increase of approximately 59% over the previous year's six-month period of $98,210.

``While we are optimistic about this revenue growth, we recognize that these modest revenues are generated by locally acquired Information Technology businesses that we plan to expand as our fiber optic network is built,'' said Robert R. Crawford, chief executive officer and president, North American DataCom.

``As the network grows,'' said Mr. Crawford, ``the Company will provide Enterprise Data Storage (EDS) services and broadband wavelength services to greater segments of the Southeast United States, where we continue to see strong demand for North American DataCom's technology. With our expanding product and platforms, we are well prepared to be a leading strategic supplier of transport and storage solutions for our customers' vital business information.

``North American DataCom is positioning itself as an industry standard for data storage and broad bandwidth services, which we will provide with our own growing fiber optic network backbone. We have a highly experienced staff and remain focused to implement our business strategies as discussed in the Business Plan that we formulated in partnership with Cap Gemini/Ernst & Young, which calls for the construction of a 3,000-mile fiber optic network.''

The reported net loss for the six-month period ended December 31, 2000 was $1,802,870, compared with $427,739 for the six-month period a year ago. This loss is directly attributed to increased expenses due to the development costs for the Company's fiber optic system.

About $1,000,000 of the increase of $1,375,000 in expenses is due to greater selling, general and administrative (SG&A) costs for the six-month period. The SG&A 6-month expenses amounted to $1,513,954, compared with $524,923 over the prior period. Another $400,000 of the increase is directly due to the significant addition of management and technical staff to develop the fiber optic business. The balance, approximately $600,000, arises from increased legal, engineering and consultant expenses.

The remainder of the increase arises from the $349,063 of other expense for the six-month period ended December 31, 2000, as compared with $6,303 of other income in the same period in 1999. This expense is primarily associated with the imputed interest of approximately $365,000 relating to an acquisition agreement for 505 miles rights-of-way and fiber conduit from New Orleans to Jacksonville, Florida.

As the Company discussed in earlier press releases, it plans to announce its equity and debt capital planning for the first 550-mile segment of its 3,000-mile network as soon as they have been finalized. Discussions with funding sources are presently underway.

``The industry understands that we are making a large investment to serve the rural South,'' said Mr. Crawford. The total asset investment of the Company increased from approximately $2.5 million in December 31, 1999 to $16.8 million in December 2000.

Safe Harbor Statement

Statements in this release express management's beliefs and expectations regarding future performance. These statements are forward-looking and involve risk and uncertainties. These risks include, but not limited to, the ability to negotiate venture agreements, properly identify acquisition partners, manage and integrate acquired businesses, react to quarterly fluctuation in results, raise working capitol and secure other financing, respond to competition and other rapidly expanding technology, deal with market and stock price fluctuation, and other risks. These risks are and will be detailed, from time to time, in North American DataCom, Inc. Securities and Exchange Commission filings. Actual results may differ materially from management's expectations.

North American DataCom's principal executive offices are located at 751 County Road 989, Building 1000, Iuka, MS 38852. For further information, contact Investor Relations, 662/424-5030, and by e-mail at


                North American DataCom, Inc., Iuka
                Investor Relations, 662-424-5030

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