Cogent Communications Reports First Quarter 2014 Results and Increases Regular Quarterly Dividend on Common Stock

Cogent Communications Reports First Quarter 2014 Results and Increases Regular
                      Quarterly Dividend on Common Stock

PR Newswire

WASHINGTON, May 8, 2014

WASHINGTON, May 8, 2014 /PRNewswire/ --

Financial and Business Highlights

  oService revenue for Q1 2014 of $92.9 million – an increase of 3.4% from
    $89.9 million for Q4 2013 and an increase of 9.9% from $84.6 million for
    Q1 2013
  oCogent approves payment of its regular quarterly dividend of $0.17 per
    common share to be paid on June 18, 2014 to shareholders of record on May
    30, 2014

       oThe second quarter 2014 per share regular dividend of $0.17
         represents an increase of 6% from the first quarter 2014 regular
         dividend of $0.16 per share and a 31% increase from the second
         quarter 2013 regular dividend of $0.13 per share

  oUnder Cogent's return of capital program, Cogent purchased 405,000 shares
    of its common stock for $14.2 million during Q1 2014 at an average price
    of $35.05 per share
  oTraffic increased by 16% from Q4 2013 to Q1 2014 and increased by 69% from
    Q1 2013
  oNon-GAAP gross margin percentage expanded by 90 basis points from 57.4%
    for Q4 2013 to 58.3% for Q1 2014 and expanded by 220 basis points from
    56.1% for Q1 2013
  oEBITDA, as adjusted, for Q1 2014 of $32.1 million – an increase of 1.8%
    from $31.5 million for Q4 2013 and an increase of 13.5% from $28.3 million
    for Q1 2013
  oCogent lit its 2,000^th building during the quarter and there were 2,024
    buildings on the Cogent network at the end of Q1 2014
  o41,947 customer connections were on the Cogent network at the end of Q1
    2014 – an increase of 4.4% from 40,174 customer connections at the end of
    Q4 2013 and an increase of 16.6% from 35,968 customer connections at the
    end of Q1 2013

Cogent Communications Group, Inc. (NASDAQ: CCOI) today announced service
revenue of $92.9 million for the three months ended March 31, 2014, an
increase of 3.4% from $89.9 million for the three months ended December 31,
2013 and an increase of 9.9% from $84.6 million for the three months ended
March 31, 2013. The impact of foreign exchange negatively impacted service
revenue growth from Q4 2013 to Q1 2014 by $0.1 million and positively impacted
service revenue growth from Q1 2013 to Q1 2014 by $0.3 million. On a constant
currency basis, service revenue grew by 3.5% from Q4 2013 to Q1 2014 and grew
by 9.6% from Q1 2013 to Q1 2014.

Cogent Communications Logo

On-net service is provided to customers located in buildings that are
physically connected to Cogent's network by Cogent facilities. On-net revenue
was $69.1 million for the three months ended March 31, 2014; an increase of
4.6% over $66.0 million for the three months ended December 31, 2013 and an
increase of 12.0% over $61.7 million for the three months ended March 31,
2013.

Off-net customers are located in buildings directly connected to Cogent's
network using other carriers' facilities and services to provide the last mile
portion of the link from the customers' premises to Cogent's network. Off-net
revenue was $23.5 million for the three months ended March 31, 2014; an
increase of 0.3% over $23.4 million for the three months ended December 31,
2013 and an increase of 5.3% over $22.3 million for the three months ended
March 31, 2013.

Non-core services are legacy services, which Cogent acquired and continues to
support but does not actively sell. Non-core revenue was $0.4 million for the
three months ended March 31, 2014, $0.4 million for the three months ended
December 31, 2013 and $0.6 million for the three months ended March 31, 2013.

Non-GAAP gross profit increased 5.1% to $54.2 million for the three months
ended March 31, 2014 from $51.6 million for the three months ended December
31, 2013 and increased by 14.4% from $47.4 million for the three months ended
March 31, 2013. Non-GAAP gross profit margin percentage was 58.3% for the
three months ended March 31, 2014, 57.4% for the three months ended December
31, 2013, and 56.1% for the three months ended March 31, 2013.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as
adjusted, increased 1.8% to $32.1 million for the three months ended March 31,
2014 from $31.5 million for the three months ended December 31, 2013 and
increased 13.5% from $28.3 million for the three months ended March 31,
2013. EBITDA, as adjusted, margin was 34.6% for the three months ended March
31, 2014, 35.1% for the three months ended December 31, 2013, and 33.5% for
the three months ended March 31, 2013.

Basic net income per share was $0.00 for the three months ended March 31,
2014, $1.14 for the three months ended December 31, 2013 and $0.01 for the
three months ended March 31, 2013. Included in basic and diluted net income
per share for the quarter ended December 31, 2013 was an income tax benefit
totaling $49.3 million.

Total customer connections increased 4.4% to 41,947 as of March 31, 2014 from
40,174 as of December 31, 2013 and increased 16.6% from 35,968 as of March 31,
2013. On-net customer connections increased 4.7% to 36,306 as of March 31,
2014 from 34,671 as of December 31, 2013 and increased 17.4% from 30,914 as of
March 31, 2013. Off-net customer connections increased 3.1% to 5,244 as of
March 31, 2014 from 5,088 as of December 31, 2013 and increased 14.2% from
4,591 as of March 31, 2013. Non-core customer connections were 397 as of
March 31, 2014, 415 as of December 31, 2013 and 463 as of March 31, 2013.

The number of on-net buildings increased by 34 on-net buildings to 2,024
on-net buildings as of March 31, 2014 from 1,990 on-net buildings as of
December 31, 2013, and increased by 134 on-net buildings from 1,890 on-net
buildings as of March 31, 2013.

Quarterly Dividend and Increase Approved

On April 17, 2014, Cogent's board approved a dividend of $0.17 per common
share payable on June 18, 2014 to shareholders of record on May 30, 2014. The
second quarter 2014 regular dividend of $0.17 per share represents an increase
of 6% from the first quarter 2014 regular dividend of $0.16 per share and a
31% increase from the second quarter 2013 regular dividend of $0.13 per share.

During the quarter ended March 31, 2014 Cogent purchased 405,000 share of its
common stock for $14.2 million at an average price per share of $35.05 under
Cogent's return of capital program. Under Cogent's return of capital program,
Cogent plans on returning additional capital to its shareholders each quarter
through either stock buybacks or a special dividend or a combination of stock
buybacks and a special dividend. The aggregate payment under this program
will total at least $10.5 million each quarter and this amount is in addition
to Cogent's regular quarterly dividend payments. Since the amount paid for
stock buybacks in the first quarter was more than $10.5 million Cogent will
not make a special dividend payment in the second quarter under the return of
capital program. The return of capital program is planned to continue until
Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio reaches
2.50.Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio
was 1.86 at March 31, 2014 and was 1.57 at December 31, 2013.

The payment of any future dividends and any other returns of capital will be
at the discretion of Cogent's board of directors and may be reduced,
eliminated or increased and will be dependent upon Cogent's financial
position, results of operations, available cash, cash flow, capital
requirements and other factors deemed relevant by Cogent's board of directors.

Conference Call and Website Information

Cogent will host a conference call with financial analysts at 7:30 a.m. (ET)
on May 8, 2014 to discuss Cogent's operating results for the first quarter of
2014 and to discuss Cogent's expectations for full year 2014. Investors and
other interested parties may access a live audio webcast of the earnings call
in the "Events" section of Cogent's website at www.cogentco.com/events. A
replay of the webcast, together with the press release, will be available on
the website following the earnings call.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1
facilities-based ISP. Cogent specializes in providing businesses with high
speed Internet access, Ethernet transport, and colocation services. Cogent's
facilities-based, all-optical IP network backbone provides services in over
180 markets globally.

Cogent Communications is headquartered at 1015 31st Street, NW, Washington,
D.C. 20007. For more information, visit www.cogentco.com. Cogent
Communications can be reached in the United States at (202) 295-4200 or via
email at info@cogentco.com.





COGENT COMMUNICATIONS GROUP, INC., AND SUBSIDIARIES

Summary of Financial and Operational Results
                        Q1 2013    Q2 2013    Q3 2013    Q4 2013    Q1 2014
Metric ($ in 000's,
except share and per
share data) – unaudited
On-Net revenue          $61,678    $62,693    $64,548    $66,032    $69,087
 % Change from         2.1%       1.6%       3.0%       2.3%       4.6%
previous Qtr.
Off-Net revenue         $22,309    $22,604    $22,767    $23,438    $23,498
% Change from previous  3.1%       1.3%       0.7%       2.9%       0.3%
Qtr.
Non-Core revenue (1)    $566       $506       $446       $389       $352
 % Change from         -3.4%      -10.6%     -11.9%     -12.8%     -9.5%
previous Qtr.
Service revenue – total $84,553    $85,803    $87,761    $89,859    $92,937
 % Change from         2.3%       1.5%       2.3%       2.4%       3.4%
previous Qtr.
Network operations      $37,154    $36,950    $37,327    $38,288    $38,723
expenses (2)
% Change from previous  -0.9%      -0.5%      1.0%       2.6%       1.1%
Qtr.
Non-GAAP gross margin   $47,399    $48,853    $50,434    $51,571    $54,214
(2)
% Change from previous  5.0%       3.1%       3.2%       2.3%       5.1%
Qtr.
Non-GAAP gross margin   56.1%      56.9%      57.5%      57.4%      58.3%
percentage (2)
Selling, general and
administrative expenses $19,106    $19,215    $19,772    $20,937    $24,392
(3)
 % Change from         10.4%      0.6%       2.9%       5.9%       16.5%
previous Qtr.
Depreciation and        $15,874    $15,900    $16,024    $16,562    $17,204
amortization expense
% Change from previous  -1.6%      0.2%       0.8%       3.4%       3.9%
Qtr.
Equity-based            $2,514     $2,137     $2,061     $2,007     $2,006
compensation expense
% Change from previous  -0.7%      -15.0%     -3.6%      -2.6%      0.0%
Qtr.
Operating income       $9,905     $11,601    $12,577    $12,065    $12,907
% Change from previous  8.0%       17.1%      8.4%       -4.1%      7.0%
Qtr.
Net income              $361       $1,607     $2,122     $52,599    $125
Basic net income per   $0.01      $0.03      $0.05      $1.14      $0.00
common share
Diluted net income per $0.01      $0.03      $0.05      $1.10      $0.00
common share
Weighted average common 45,537,607 46,040,692 46,171,194 46,302,926 46,409,735
shares – basic
% Change from previous  0.1%       1.1%       0.3%       0.3%       0.2%
Qtr.
Weighted average common 46,435,677 46,769,184 46,823,167 48,800,560 46,907,360
shares – diluted
% Change from previous  2.1%       0.7%       0.1%       4.2%       -3.9%
Qtr.
EBITDA, as adjusted (4) $28,295    $29,638    $30,703    $31,548    $32,117
 % Change from         -0.9%      4.7%       3.6%       2.8%       1.8%
previous Qtr.
EBITDA, as adjusted     33.5%      34.5%      35.0%      35.1%      34.6%
margin (4)
Net cash provided by    $14,962    $22,703    $14,898    $29,288    $10,636
operating activities
% Change from previous  -53.7%     51.7%      -34.4%     96.6%      -63.7%
Qtr.
Capital expenditures    $16,316    $12,455    $10,165    $10,095    $15,623
 % Change from         58.6%      -23.7%     -18.4%     -0.7%      54.8%
previous Qtr.
Customer Connections –
end of period
On-Net                  30,914     31,876     33,310     34,671     36,306
 % Change from         3.5%       3.1%       4.5%       4.1%       4.7%
previous Qtr.
Off-Net                 4,591      4,728      4,886      5,088      5,244
% Change from previous  2.8%       3.0%       3.3%       4.1%       3.1%
Qtr.
Non-Core (1)            463        453        443        415        397
 % Change from         -1.7%      -2.2%      -2.2%      -6.3%      -4.3%
previous Qtr.
Total                   35,968     37,057     38,639     40,174     41,947
 % Change from         3.3%       3.0%       4.3%       4.0%       4.4%
previous Qtr.
Other – end of period
Buildings On-Net        1,890      1,921      1,955      1,990      2,024
Employees               619        633        673        706        724

    Consists of legacy services of companies whose assets or businesses were
(1) acquired by Cogent, primarily including voice services (only provided in
    Toronto, Canada).
    Network operations expense excludes equity-based compensation expense of
    $155, $126, $114, $112 and $113 in the three months ended March 31, 2013,
(2) June 30, 2013, September 30, 2013, December 31, 2013 and March 31, 2014,
    respectively. Non-GAAP gross margin represents service revenue less
    network operations expense, excluding equity-based compensation and
    amounts shown separately (depreciation expense).
    Excludes equity-based compensation expense of $2,359, $2,011, $1,947,
(3) $1,895 and $1,893 in the three months ended March 31, 2013, June 30, 2013,
    September 30, 2013, December 31, 2013 and March 31, 2014, respectively.
    See schedule of non-GAAP metrics below for definition and reconciliation
    to GAAP measures. EBITDA, as adjusted, includes net gains (losses) from
(4) asset related transactions of $2, $41, $914 and $2,295 in the three months
    ended March 31, 2013 and September 30, 2013, December 31, 2013 and March
    31, 2014, respectively.



Schedule of Non-GAAP Measures

EBITDA and EBITDA, as adjusted

EBITDA represents net cash flows from operating activities plus changes in
operating assets and liabilities, cash interest expense and income tax
expense. Management believes the most directly comparable measure to EBITDA
calculated in accordance with generally accepted accounting principles in the
United States, or GAAP, is cash flows provided by operating activities.

EBITDA, as adjusted, represents EBITDA plus net gains (losses) on asset
related transactions. The Company believes EBITDA, as adjusted, is a useful
measure of its ability to service debt, fund capital expenditures and expand
its business. EBITDA, as adjusted, is an integral part of the internal
reporting and planning system used by management as a supplement to GAAP
financial information. The Company also believes that EBITDA is a frequently
used measure by securities analysts, investors, and other interested parties
in their evaluation of issuers.

EBITDA and EBITDA, as adjusted, are not recognized terms under GAAP and
accordingly, should not be viewed in isolation or as a substitute for the
analysis of results as reported under GAAP, but rather as a supplemental
measure to GAAP. For example, EBITDA is not intended to reflect the Company's
free cash flow, as it does not consider certain current or future cash
requirements, such as capital expenditures, contractual commitments, and
changes in working capital needs, interest expenses and debt service
requirements. The Company's calculations of EBITDA and EBITDA, as adjusted,
may also differ from the calculation of EBITDA and EBITDA, as adjusted, by its
competitors and other companies and as such, its utility as a comparative
measure is limited.



COGENT COMMUNICATIONS GROUP, INC., AND SUBSIDIARIES
EBITDA, as adjusted, is reconciled to cash flows provided by operating
activities in the table below.
                                     Q1 2013  Q2 2013 Q3 2013 Q4 2013 Q1 2014
($ in 000's) – unaudited
Net cash flows provided by operating $14,962   $22,703 $14,898 $29,288 $10,636
activities
Changes in operating assets and      5,365     (1,446) 6,771   (8,158) 9,048
liabilities
Cash interest expense and income tax 7,966     8,381   8,993   9,504   10,138
expense
Gains on asset related transactions  2         -       41      914     2,295
EBITDA, as adjusted                  $28,295   $29,638 $30,703 $31,548 $32,117



Impact of foreign currencies ("constant currency" impact) on change in
sequential quarterly service revenue

($ in 000's) – unaudited                                               Q1 2014
Service revenue, as reported – Q1 2014                                 $92,937
Impact of foreign currencies on service revenue                        98
Service revenue - Q1 2014, as adjusted (1)                            $93,035
Service revenue, as reported – Q4 2013                                 $89,859
Constant currency increase from Q4 2013 to Q1 2014 - (Service revenue, $3,176
as adjusted for Q1 2014 less service revenue, as reported for Q4 2013)
Percent increase (Constant currency increase from Q4 2013 to Q1 2014   3.5%
divided by service revenue, as reported for Q4 2013)

    Service revenue, as adjusted, is determined by translating the service
    revenue for the three months ended March 31, 2014 at the average foreign
    currency exchange rates for the three months ended December 31, 2013. The
(1) Company believes that disclosing quarterly revenue growth without the
    impact of foreign currencies on service revenue is a useful measure of
    revenue growth. Service revenue, as adjusted, is an integral part of the
    internal reporting and planning system used by management as a supplement
    to GAAP financial information.



Impact of foreign currencies ("constant currency" impact) on change in prior
year quarterly service revenue

($ in 000's) – unaudited                                               Q1 2014
Service revenue, as reported – Q1 2014                                 $92,937
Impact of foreign currencies on service revenue                        (280)
Service revenue - Q1 2014, as adjusted (2)                            $92,657
Service revenue, as reported – Q1 2013                                 $84,553
Constant currency increase from Q1 2013 to Q1 2014 - (Service revenue, $8,104
as adjusted for Q1 2014 less service revenue, as reported for Q1 2013)
Percent increase (Constant currency increase from Q1 2013 to Q1 2014   9.6%
divided by service revenue, as reported for Q1 2013)

    Service revenue, as adjusted, is determined by translating the service
    revenue for the three months ended March 31, 2014 at the average foreign
    currency exchange rates for the three months ended March 31, 2013. The
(2) Company believes that disclosing quarterly revenue growth without the
    impact of foreign currencies on service revenue is a useful measure of
    revenue growth. Service revenue, as adjusted, is an integral part of the
    internal reporting and planning system used by management as a supplement
    to GAAP financial information.

Net debt to trailing 12 months EBITDA, as adjusted, ratio

Under Cogent's return of capital program Cogent plans on returning an
additional at least $10.5 million to its shareholders each quarter through
either stock buybacks or a special dividend or a combination of stock buybacks
and a special dividend. The aggregate payment under this program will total
at least $10.5 million each quarter and this amount is in addition to Cogent's
regular quarterly dividend payments. The program is planned to continue until
Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio reaches
2.50.Cogent's net debt to trailing twelve months EBITDA, as adjusted, ratio
was 1.57 at December 31, 2013 and 1.86 at March 31, 2014 as shown below.



($ in 000's) – unaudited          As of December 31, 2013 As of March 31, 2014
Cash and cash equivalents         $304,866                $263,747
Debt
Capital leases – current portion  $9,252                  $8,121
Convertible notes – par value     $91,978                 $91,978
Capital leases – long term        $152,527                $154,233
Senior secured notes – par value  $240,000                $240,000
Total debt                        $493,757                $494,332
Total net debt                    $188,891                $230,585
Trailing 12 months EBITDA, as     $120,188                $124,006
adjusted
Total net debt to trailing 12
months                            1.57                    1.86

EBITDA, as adjusted



Cogent's SEC filings are available online via the Investor Relations section
of www.cogentco.com or on the Securities and Exchange Commission's website at
www.sec.gov.





COGENT COMMUNICATIONS GROUP, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2014 AND DECEMBER 31, 2013
(IN THOUSANDS, EXCEPT SHARE DATA)
                                               March31,       December31,
                                               2014            2013
                                               (Unaudited)
Assets
Current assets:
Cash and cash equivalents                      $    263,747    $    304,866
Accounts receivable, net of allowance for
doubtful accounts of $2,192 and $1,871,        33,126          30,628
respectively
Prepaid expenses and other current assets      23,781          18,777
Total current assets                           320,654         354,271
Property and equipment, net                    346,185         341,193
Deferred tax assets - noncurrent               49,710          50,861
Deposits and other assets - $448 and $448      8,698           8,776
restricted, respectively
Total assets                                   $    725,247    $    755,101
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                               $    16,441     $    14,098
Accrued liabilities                            27,221          31,465
Convertible senior notes – current portion,
net of discount of $1,414 and $3,099,          90,564          88,879
respectively
Current maturities, capital lease obligations  8,121           9,252
Total current liabilities                      142,347         143,694
Senior secured notes including premium of      245,131         245,423
$5,131 and $5,423, respectively
Capital lease obligations, net of current      154,233         152,527
maturities
Other long term liabilities                    20,536          19,965
Total liabilities                              562,247         561,609
Commitments and contingencies:
Stockholders' equity:
Common stock, $0.001 par value; 75,000,000
shares authorized; 46,951,593 and 47,334,218   47              47
shares issued and outstanding, respectively
Additional paid-in capital                     496,453         508,256
Accumulated other comprehensive income         1,674           2,136
Accumulated deficit                            (335,174)       (316,947)
Total stockholders' equity                     163,000         193,492
Total liabilities and stockholders' equity     $    725,247    $    755,101
COGENT COMMUNICATIONS GROUP, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND MARCH 31, 2013
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                               ThreeMonths    ThreeMonths
                                               Ended           Ended
                                               March31,2014  March31,2013
                                               (Unaudited)     (Unaudited)
Service revenue                                $    92,937     $    84,553
Operating expenses:
Network operations (including $113 and $155
of equity-based compensation

expense, respectively, exclusive of         38,836          37,309
depreciation and amortization shown

separately below)
Selling, general, and administrative
(including $1,893 and $2,359 of equity-based   26,285          21,465

compensation expense, respectively)
Gains on equipment                             (2,295)         -
Depreciation and amortization                  17,204          15,874
Total operating expenses                       80,030          74,648
Operating income                               12,907          9,905
Interest income and other, net                 137             658
Interest expense                               (11,303)        (9,869)
Income before income taxes                     1,741           694
Income tax (provision) benefit                 (1,616)         (333)
Net income                                     $    125        $    361
Comprehensive income (loss):
Net income                                     $    125        $    361
Foreign currency translation adjustment        (462)           (1,793)
Comprehensive income (loss)                    $    (337)      $    (1,432)
Net income per common share:
Basic and diluted net income per common share  $    0.00       $    0.01
Dividends declared per common share            $    0.39       $    0.12
Weighted-average common shares - basic         46,409,735      45,537,607
Weighted-average common shares - diluted       46,907,360      46,435,677
COGENT COMMUNICATIONS GROUP, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND MARCH 31, 2013
(IN THOUSANDS)
                                               Threemonths    Threemonths
                                               Ended           Ended
                                               March31,2014  March31,2013
                                               (Unaudited)     (Unaudited)
Cashflowsfromoperatingactivities:
Net income                                     $    125        $    361
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                  17,204          15,874
Amortization of debt discount and premium      1,415           1,580
Equity-based compensation expense (net of      2,006           2,514
amounts capitalized)
Gains—dispositions of assets and other, net    (2,258)         135
Deferred income taxes                          1,229           59
Changes in operating assets and liabilities:
Accounts receivable                            (2,554)         (3,175)
Prepaid expenses and other current assets      (5,143)         (2,724)
Deposits and other assets                      78              24
Accounts payable, accrued liabilities and      (1,466)         314
other long-term liabilities
Net cash provided by operating activities      10,636          14,962
Cash flows from investing activities:
Purchases of property and equipment            (15,623)        (16,316)
Proceeds from dispositions of assets           27              2
Net cash used in investing activities          (15,596)        (16,314)
Cash flows from financing activities:
Dividends paid                                 (18,352)        (5,489)
Purchases of common stock                      (14,196)        -
Proceeds from exercises of stock options       155             215
Principal payments of capital lease            (3,379)         (4,964)
obligations
Net cash used in financing activities          (35,772)        (10,238)
Effect of exchange rates changes on cash       (387)           (735)
Net decrease in cash and cash equivalents      (41,119)        (12,325)
Cash and cash equivalents, beginning of        304,866         247,285
period
Cash and cash equivalents, end of period       $    263,747    $    234,960
Supplemental disclosure of non-cash investing
and financing activities:
Non-cash component of network equipment        $    2,235      $    -
obtained in exchange transactions
Capital lease obligations incurred             $    4,224      $    18,842





Except for historical information and discussion contained herein, statements
contained in this release constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements include, but are not limited to statements identified by words such
as "believes," "expects," "anticipates," "estimates," "intends," "plans,"
"targets," "projects" and similar expressions. The statements in this release
are based upon the current beliefs and expectations of Cogent's management and
are subject to significant risks and uncertainties. Actual results may differ
from those set forth in the forward-looking statements. Numerous factors
could cause or contribute to such differences, including future economic
instability in the global economy or a contraction of the capital markets
which could affect spending on Internet services and our ability to engage in
financing activities; the impact of changing foreign exchange rates (in
particular the Euro to USD and Canadian dollar to USD exchange rates) on the
translation of our non-USD denominated revenues, expenses, assets and
liabilities; legal and operational difficulties in new markets; the imposition
of a requirement that we contribute to the U.S. Universal Service Fund and
similar funds in other countries; changes in government policy and/or
regulation, including net neutrality rules by the United States Federal
Communications Commission and in the area of data protection; increasing
competition leading to lower prices for our services; our ability to attract
new customers and to increase and maintain the volume of traffic on our
network; the ability to maintain our Internet peering arrangements on
favorable terms; our reliance on an equipment vendor, Cisco Systems Inc., and
the potential for hardware or software problems associated with such
equipment; the dependence of our network on the quality and dependability of
third-party fiber providers; our ability to retain certain customers that
comprise a significant portion of our revenue base; the management of network
failures and/or disruptions; and outcomes in litigation as well as other risks
discussed from time to time in our filings with the Securities and Exchange
Commission, including, without limitation, our annual report on Form 10-K for
the fiscal year ended December 31, 2013 and our quarterly report on Form 10-Q
for the quarter ended March 31, 2014 to be filed with the Securities and
Exchange Commission. Cogent undertakes no duty to update any forward-looking
statement or any information contained in this press release or in other
public disclosures at any time.

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SOURCE Cogent Communications Group, Inc.

Website: http://www.cogentco.com
Contact: Cogent Contacts: For Public Relations: Travis Wachter, + 1 (202)
295-4217, twachter@cogentco.com or For Investor Relations: John Chang, + 1
(202) 295-4212, investor.relations@cogentco.com
 
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