Company Expects to be Generating Positive Cash Flows From Operations by Mid-2005

VIA NET.WORKS, Inc. today announced that the integration of the continental Europe operations of PSINet Europe, which it acquired on August 19, is proceeding as planned, with significant progress achieved to date on several marketing, operational, administrative and financial initiatives. As part of the integration, moreover, the company said it is adopting the PSINet Europe brand for the VIA Industry Solutions business in five of its country operations.

VIA also provided guidance related to its financial performance for the remainder of 2004, as well as to its timetable for generating positive cash flows from operations. The update takes into account the expected contribution of the acquired PSINet Europe operations and the impact of the recent sale of VIA NET.WORKS UK.

Integration update
"We are extremely pleased with the progress of the PSINet Europe integration," stated Rhett Williams, VIA's Chief Executive Officer. "We are on target in realizing our objectives. We continue to be impressed with the quality of the customers, people, assets and financials, and with the current strength and future prospects of the business we bought.

"Our experience with PSINet Europe's customers has been particularly rewarding, as they are much bigger than VIA's legacy customer base and demonstrate a much higher loyalty -- or stickiness -- to the company than we anticipated."

Mr. Williams emphasized that progress to date in the integration of PSINet Europe into VIA is being achieved at levels meeting or exceeding those VIA had articulated at the time it announced the transaction. Specifically, the company cited the following:

• PSINet Europe revenue. To date, VIA said, the five PSINet Europe operations are producing revenues at an annualized run rate consistent with the $42 million annualized run rate anticipated in pre-acquisition planning. VIA also said the five operations are generating positive cash flows on an annualized run rate consistent with planning expectations.
• Product integration. Consistent with its previously stated integration objectives, VIA said that joint VIA-PSINet Europe teams have completed the initial evaluation of the combined company's product portfolio -- both from feature/function and geographic standpoints. Rationalization activities currently are under way, as are efforts to identify cost-effective ways of combining products and/or migrating customers to common service platforms. Cross-selling opportunities have been implemented in managed security, MPLS VPNs and voice, while the VIA and PSINet Europe teams have already successfully partnered on new business opportunities.
• Organizational structure. As promised, the new executive management structure has been decided in each of the countries in which VIA has a duplicate presence, and physical moves have been decided -- and begun, in some cases -- so as to bring the organizations together.
• Cost synergies. Based on integration progress to date. VIA said it will achieve the previously disclosed $4 million a year in cost- related synergies following the completion of the integration.
• Cost savings. VIA stated that, as previously forecast, immediate SG&A savings are being realized in several SG&A expense categories, including business insurance, head count and physical facilities.

"The dedicated integration team is making great progress in moving the PSINet Europe integration along," stated Dennis Roth, the experienced former AT&T executive who was brought into VIA to serve as Integration Program Director. "We continue to be confident that we will achieve our financial, operational and marketplace objectives."

In addition, the integration process has allowed management to assess the strength of the PSINet Europe customer base and of the PSINet Europe brand. This has led VIA to adopt the PSINet Europe brand for its Industry Solutions channel in Belgium, France, Germany, the Netherlands and Switzerland -- the five countries in which VIA and PSINet Europe both operate. The Industry Solutions channel will continue to market and sell a high-value portfolio of bundled services, centered on dedicated hosting, through a direct sales force to large SMEs and small corporations.

"We are delighted with the initial results of the integration process and believe that the decision to present our Industry Solutions business through the PSINet Europe brand will both focus and strengthen our presence in the market," Mr. Williams said.

Financial guidance
"We previously provided guidance for the full year 2004 and for our expectation of achieving positive net cash flows from operations," Mr. Williams said. "Since then, we have substantially changed the company through the two recent transactions. These transactions -- like the Amen acquisition in February -- directly support our efforts to refocus our revenue mix on the hosting and security business. They have also contributed to an improved financial profile of the company and, therefore, it is appropriate to provide an updated outlook for the performance of the business."

Mr. Williams emphasized that VIA continues to expect to be generating positive cash flows from operations by mid-2005 and that it has sufficient cash reserves remaining to reach that point.

The company also provided the following guidance:

• Revenue. VIA said it expects consolidated revenue for 2004 to total $81 million to $83 million, compared with the $76 million to $79 million it forecast at the end of the first quarter. The revenue figure will include PSINet Europe results as of August 20, and will exclude the results of the disposed VIA UK unit for the fourth quarter. The revenue performance of the historical VIA business is expected to remain in line with earlier forecasts.
• Revenue mix. The company said it expects hosting revenues (which produce significantly higher gross margins than access revenues) to comprise approximately 29% of total 2004 revenues, compared with its previous guidance of "greater than 23%." Hosting revenues at the beginning of 2004 were 21% of total revenues. Access revenues, which began the year at 65% of total revenues, will decline to approximately 57% of 2004's total revenues. VIA said it expects hosting revenues to rise to approximately 35% of total revenues in 2005, with access revenues declining to 50% of total revenues.
• Cash balance. In stating that it expects to be generating positive cash flows from operations by mid-2005, the company said its cash balance, including restricted cash, is expected to total $14 million to $17 million at its low point, having taken account of the fact it expects to incur restructuring costs of approximately $6 million in connection with the PSINet Europe acquisition. The restructuring costs, the company added, will be spread across the third and fourth quarters of 2004 and the first quarter of 2005.

VIA said it expects to report operating results for the third quarter during the week of November 8, 2004.

About VIA NET.WORKS, Inc.
VIA NET.WORKS, Inc. (Nasdaq: VNWI; Euronext) is a leading provider of business communication solutions to more than 200,000 small- and medium-sized businesses in Europe and the United States. Through the VIA, AMEN and PSINet Europe brands, the Group offers a comprehensive portfolio of business communications services, including hosting, security, connectivity, networks, voice and professional services. Website: http://www.vianetworks.com/

Contact:
Investors:
Mike Geczi,
+1-646-218-8747,
cell: +1-917-439-8377,
mgeczi@apcoworldwide.com,
for VIA NET.WORKS, Inc.;
or Media:
Piers Schreiber
of VIA NET.WORKS, Inc.,
+31-20-502-0026,
cell: +31-65-535-8087,
pschreiber@vianetworks.com

Web site: http://www.vianetworks.com/

Note to Investors:
Statements in this press release regarding VIA's business that are not historical facts, including but not limited to statements regarding expected benefits from the acquisition of the Amen and PSINet Europe businesses, the sale of the VIA UK business and expectations of reaching the point of cash flow break even, are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements. Factors that could cause or contribute to such differences include fluctuation in exchange rates, particularly in the Euro, British pound and Swiss franc, which could impact US dollar-denominated reported revenue; greater-than-anticipated costs, or less-than-anticipated savings, associated with integrating the PSINet Europe businesses and systems into the VIA group; undisclosed liabilities which may result in additional costs and distraction of key management; delays in executing certain cost- cutting measures, which could adversely impact the timing of expected cost- reduction benefits; unanticipated loss of key PSINet Europe or VIA personnel and customers as a result of the change of control, which might result in increased costs and lost revenue opportunities; and other risk factors listed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including but not limited to the report on Form 10-Q for the quarter ended June 30, 2004. By making these forward-looking statements, VIA undertakes no obligation to update these statements for revisions or changes after the date of this release.

Source: VIA NET.WORKS, Inc.