© 2010 Internet America, Inc. Houston, Texas
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Internet America Announces Second Quarter Financial Results Tuesday February 14, 6:00 pm ET HOUSTON, Feb. 14 -- Internet America, Inc. (OTC Bulletin Board: GEEK - News) announced today results for its second fiscal quarter ending December 31, 2005. Results for the quarter included EBITDA (earnings before interest, taxes, depreciation and amortization) of $(35,000) versus $254,000 for the same period in 2004 and a net loss of $271,000 versus net income of $84,000 for the same period in 2004. The decline in net income was primarily attributable to decreased revenue in dialup Internet services. Loss per share was $.02 compared to earnings per share of $.01 for the quarter ended December 31, 2004. The Company reported second quarter revenue of $2.5 million compared to $2.8 million for the quarter ended December 31, 2004. Internet America's subscriber count was 49,000 at December 31, 2005 compared to 58,000 at December 31, 2004. Billy Ladin, CEO of Internet America, said, "Our quarterly results reflect continuing declines in revenue of our non-wireless internet service products, and increases in General and Administrative Expenses and Bad Debt Expense. Additionally, we incurred a one-time charge of $65,000 including penalties and interest to achieve final settlement of our State of Texas Sales tax audit (which was previously disclosed). The operating results reflect a company in transition to the strategy of providing wireless Internet access services to under-served and non-served markets in rural areas of Texas. We continue to be cautiously optimistic that the execution of this strategy will provide desirable results for the Company. While the current quarter is also challenging, most of the non-recurring expenses will be behind us by the end of March." Internet America is a leading Internet service provider primarily serving the Texas market. Based in Houston, Internet America offers businesses and individuals a wide array of Internet services including broadband Internet delivered wirelessly and over DSL, dedicated high-speed access, web hosting, and dial-up Internet access. Internet America provides customers a wide range of related value-added services, including Fax2email, online backup and storage solutions, parental control software, and global roaming solutions. Internet America focuses on the speed and quality of its Internet services and its commitment to providing excellent customer care. Additional information on Internet America is available on the Company's web site at http://www.internetamerica.com . In this press release, the Company refers to a non-GAAP financial measure called EBITDA because of management's belief that this measure is a financial indicator of the Company's ability to internally generate operating funds. Management also believes that this non-GAAP financial measure is useful information to investors because it is widely used by professional research analysts in the valuation and investment recommendations of companies in the Company's peer group. EBITDA should not be considered an alternative to net income, as defined by GAAP. This press release may contain forward-looking statements relating to future business expectations. These statements, specifically including management's beliefs, expectations and goals, are subject to many uncertainties that exist in Internet America's operations and business environment. Business plans may change and actual results may differ materially as a result of a number of risk factors. These risks include, without limitation, that (1) we will not be able to increase our rural customer base by providing wireless access in Texas at a rate that exceeds the loss of metropolitan area customers currently purchasing non-wireless access, (2) we will not improve EBITDA, profitability or product margins, (3) we will not continue to achieve operating efficiencies, (4) we will not be competitive with existing or new competitors, (5) we will not keep up with industry pricing or technological developments impacting the Internet, (6) needed financing will not be available to us if and as needed, (7) we will be adversely affected by dependence on network infrastructure, telecommunications providers and other vendors, by regulatory changes and by general economic and business conditions, (8) that service interruptions or impediments could harm our business; and 9) that we may not be able to protect our proprietary technologies or successfully defend infringement claims and may be required to enter licensing arrangements on unfavorable terms. These risk factors are not intended to represent a complete list of all risks and uncertainties in the Company's business and should be read in conjunction with the more detailed cautionary statements included in the Company's most recent SEC filings.
Internet America, Inc.
(OTC Bulletin Board: GEEK - News)
Unaudited Financial Summary
(in thousands, except per share data and subscriber count)
For the Three For the Six
Months Ended Months Ended
12/31/05 12/31/04 12/31/05 12/31/04
Subscribers 49,000 58,000 49,000 58,000
Internet services $2,158 $2,677 $4,399 $5,158
Other 314 94 720 114
Total revenue 2,472 2,771 5,119 5,272
Connectivity and operations 1,558 1,597 3,094 2,974
Sales and marketing 90 159 164 318
General and administrative 859 761 1,567 1,432
EBITDA (35) 254 294 548
Depreciation and
amortization (212) (162) (429) (226)
Interest expense, net (24) (8) (28) (0)
Net (loss) income $(271) $84 $(163) $322
Basic (loss) income
per share $(0.02) $0.01 $(0.01) $0.03
Weighted average
shares - basic 12,452 10,529 12,445 10,496
Diluted (loss) income
per share $(0.02) $0.01 $(0.01) $0.03
Weighted average
shares - diluted 12,452 10,617 12,445 10,554
Reconciliation of net income (a GAAP measure) to EBITDA (a Non-GAAP
measure) (in thousands):
For the Three For the Six
Months Ended Months Ended
12/31/05 12/31/04 12/31/05 12/31/04
Net (loss) income $(271) $84 $(163) $322
Add:
Depreciation and
amortization 212 162 429 226
Interest expense, net 24 8 28 0
EBITDA $(35) $254 $294 $548
As of
12/31/05 12/31/04
Current assets $2,467 $2,077
Property and equipment, net 892 705
Other assets, net 4,844 5,131
Total assets $8,203 $7,913
Current liabilities $2,589 $3,290
Long-term liabilities 308 355
Total stockholders' equity 5,306 4,268
Total liabilities and
stockholders' equity $8,203 $7,913
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"I was extremely pleased with the response I got from my service call. The call was answered within a few minutes and the technician was able to solve the problem immediately. He gave me the impression that he really understood the problem and was not just "following a script" (unlike the crummy service I get from my employer's technical support!)" |
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