ATLANTA, Aug. 8, 2007 (PRIME NEWSWIRE) -- Verso Technologies, Inc. (Nasdaq:VRSO), a global provider of next generation network solutions, announced today it expects to provide its next generation communication network equipment to suppliers under two government contracts. The first contract is the Defense Access Transport Services (DATS) contract with the Defense Information Systems Agency, or DISA, formerly known as the Defense Communications Agency. The second contract relates to the Networx project, a $20 billion U.S. General Services Administration (GSA) project. Both projects involve the installation of next generation communication network equipment for military and non-military government agency sites throughout the United States.
DISA is a government agency under the supervision of the U.S. Department of Defense responsible for information technology initiatives, including the upgrading and reconfiguration of the communications network for military installations throughout the world. The DATS contract has a base term of three years and seven one-year extension terms. AT&T, Arrowhead Global Solutions, Inc. and Qwest Communications have been awarded the DATS contract for North America. Two of the three contractors have signed agreements with the same sub-contractor to service this contract. Verso has entered into a distribution agreement with that sub-contractor specifically for the DATS contract. Verso has an existing contract with the third contractor directly.
Based upon discussions with the DISA sub-contractor, Verso expects to realize revenue related to the DATS contract of not less than $10 million over the next three years, commencing late this year. Additional revenue could be realized if the DATS contract is extended beyond the initial three-year base period or if certain Verso products which are currently under consideration by the DISA contractors and sub-contractor for deployment under the DATS contract are actually deployed; however, Verso does not currently expect to realize any such additional revenue.
Networx is a GSA project with a $20 billion budget over 10 years. The project encompasses the upgrade and installation of next generation communication equipment in all federal agencies serving as the primary replacement for the expiring FTS2001 and FTS2001 Crossover contracts and federal wireless contracts. The government awarded contracts to Verizon, AT&T and Qwest for the implementation of the Networx Enterprise project on May 31, 2007. All three companies are long-time distributors of some of the same Verso's products that may be utilized in the GSA contract. At this stage, Verso is unable to accurately estimate the extent of the revenue (if any) that Verso may realize from this contract, but Verso offers similar products to the products required by this contract and intends to vigorously pursue this opportunity.
About Verso Technologies
Verso is a global provider of next generation network solutions offering a core-to-edge product portfolio primarily for telecommunications service providers. The company's products enable its customers to secure and optimize network bandwidth, generate additional revenue and reduce costs. Verso's applications and services are cost effective, deploy quickly and provide a superior return on investment. For more information, contact Verso at www.verso.com or call 678.589.3500.
About DISA
The Defense Information Systems Agency is a combat support agency responsible for planning, engineering, acquiring, fielding, and supporting global net-centric solutions to serve the needs of the President, Vice President, the Secretary of Defense, and other segments of the U.S. Department of Defense, under all conditions of peace and war. www.disa.mil
About Networx
Networx is designed to support government-wide enterprise architecture. It will provide a framework that supports cross-agency collaboration, transformation, and government-wide technology improvement. Networx will maximize the use of government resources by providing a common procurement infrastructure and a performance based approach that will embrace commercial technical and interface standards. Networx will require that service providers offer the most current security features and services to ensure a secure government operating environment. www.gsa.gov/networx
About Government Contracts
Government contracts contain provisions and are subject to laws and regulations that give the government rights and remedies not typically found in commercial contracts. The government may terminate its contracts for its convenience, modify its contracts in a manner adverse to the other parties and decline to renew contract extensions, among other things. If the government does any of the foregoing with respect to the DATS contract or the contract for the Networx project, or if the parties providing the services to the government under these contracts breach their obligations thereunder, then we will not generate the revenue relating to these contracts that we anticipate.
Forward Looking Statements
Certain statements contained in this release that are not statements of historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words -- "believe," "expect," "anticipate," "intend," "will," and similar expressions are examples of words that identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding our future financial position, timing of future orders, business strategy and expected cost savings. These forward-looking statements are based on our current beliefs, as well as assumptions we have made based upon information currently available to us. These forward-looking statements may be affected by the risks and uncertainties in our business and are qualified in their entirety by the cautionary statements and risk factor disclosure contained in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2006 and our quarterly reports on Form 10-Q filed subsequent thereto. We do not assume, and expressly disclaim, any obligation to update these forward-looking statements.