"Since joining VitalStream, I have been impressed with the companys significant market presence, its obviously talented executive base, and technology resources, as well as the very real market opportunities available to us," said Jack Waterman (pictured), CEO of VitalStream Holdings, Inc., the parent company of VitalStream, Inc., as he yesterday reported the company's results for the second quarter of fiscal 2005.

"Our results for the quarter reflect continued growth in our core streaming business as well as the impact of the PlayStream acquisition which has enhanced our presence in the small and medium-sized business market," Waterman continued.

"Over the past 60 days, our management team has been focused on positioning the company to capitalize on new market opportunities, particularly with potential enterprise clients. We are already realizing the benefits of increased MRR (monthly recurring revenue) from an improved product offering and an increased focus on customer service," he added.

Revenues for the quarter ended June 30, 2005 were $3,957,000, a 72 percent increase over revenues of $2,302,000, in the same period a year ago, and a 16 percent increase over revenues in the first quarter of 2005. Revenues for the six months ended June 30, 2005 were $7,355,000, a 71% increase over revenues of $4,293,000 for the six months ended June 30, 2004.

The results for the second quarter of 2005 include revenue growth generated from new customers, and the impact of the acquisition of the business of PlayStream, LLC in April 2005. New customers added during the quarter included Kaiser Permanente, Music Plus TV, Oxygen Media, LLC (Oh! Oxygen), Louisiana Governors Office, Wiltel Communications, Lionbridge Technologies, The Panic Channel and Longwood University.

For the second quarter of 2005, VitalStream reported a net loss of ($528,000), or ($0.01) per share, versus a net loss of ($647,000), or ($0.02) per share, in the same period a year ago. The net loss for the six months ended June 30, 2005 was ($725,000), or ($0.01) per share compared to a net loss of ($860,000), or ($0.03) per share for the six months ended June 30, 2004.

VitalStream ended the second quarter of 2005 with cash of $8.5 million compared to cash of $10.3 million at the end of 2004 and $9.1 million at the end of the first quarter of 2005.

Waterman said that VitalStream is already realizing benefits from its Q2 2005 acquisition of PlayStream, a leading provider of streaming media services that had a major presence in the small and medium-sized business and small and home office markets. As a standalone entity, PlayStream had 2004 revenue of approximately $1.6 million - 90 percent of which was recurring revenue.

"We have now fully integrated PlayStream into the company. In addition to enhancing revenues, our customer base and overall market presence, the transaction has added to the overall depth of our management and product development teams," Waterman noted.