© 2010 Internet America, Inc. Houston, Texas
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INTERNET AMERICA REPORTS FOURTH QUARTER AND FISCAL YEAR END RESULTS
DALLAS, October 11,2005 Internet America, Inc. (OTCBB: GEEK) today announced results for its fourth quarter and fiscal year ended June 30, 2005, including a net loss of $44,000 for the fourth quarter and net income of $19,000 for the fiscal year. EBITDA (earnings before interest, taxes, depreciation and amortization) for the fourth quarter was $156,000 and $636,000 for the fiscal year. For the fiscal year, Internet America reported revenue of $10.6 million compared to $12.0 million a year ago. The Company recorded net income of $19,000, or $0.00 per share, for the fiscal year ended June 30, 2005 compared to net income of $1.1 million, or $0.11 per share, a year ago. Internet Americas subscriber count was approximately 53,000 at June 30, 2005. Internet America reported revenue of $2.6 million for the fourth quarter compared to $2.6 million for the same period a year ago. The Company recorded a net loss of $44,000, or $(0.01) per share, for the quarter ended June 30, 2005 compared to net income of $444,000, or $0.04 per share, for the same period a year ago. Billy Ladin, President and Chief Executive Officer of Internet America said, Fiscal year 2005 was a challenging, repositioning year for Internet America. Much of the Companys effort was focused on the initial phases of the implementation of our strategy to provide wireless Internet access to under-served and non-served rural markets in Texas. In addition to making four acquisitions to facilitate this, we were also preparing, at fiscal year-end, to launch de novo operations in specific markets that we have targeted for further implementing this strategy. A reduction in our workforce in March, continued work on reducing operating expenses and the completion of a private placement of new equity funding in May were also driven by this strategy. Finally, the Company also introduced several new services, including NetVOICE VOIP phone service during the last year. Ladin continued, In line with national trends, Internet Americas base of dial-up subscribers continued to decline, particularly in major metropolitan areas where fierce and, occasionally, irrational competition from broadband access service providers is prevalent. However, the Company believes that the attrition in its dial-up subscriber base can be offset by growth in the rural markets where broadband services, delivered over wireless networks, are not subject to the same levels of competition. 4th Quarter Conference Call Scheduled Internet America has scheduled a conference call that will be held on Wednesday, October 12, 2005 at 10:00 a.m. central (11:00 a.m. eastern) to discuss the Companys financial results for the fourth quarter ended June 30, 2005. What: Internet America Fourth Quarter Earnings Release When: Wednesday, October 12, 2005, at 10:00 a.m. central time(11:00 a.m. eastern time) How: Dial (800) 257-7087 to access the call Who: William E. Ladin, Jr., Chief Executive Officer, Sandra T. Everett, Controller A playback of the call will be available through October 19, 2005 by calling (800) 405-2236. Internet America is a leading Internet service provider primarily serving the Texas market. Based in Dallas, Internet America offers businesses and individuals a full range of Internet services, including wireless Internet access, dedicated high-speed access, dial-up access, DSL and web hosting. 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 Companys web site at www.internetamerica.com. This press release may contain forward-looking statements relating to future business expectations. These statements, specifically including managements beliefs, expectations and goals, are subject to many uncertainties that exist in Internet Americas 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 at a rate that exceeds the loss of metropolitan area customers, (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, and (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, especially as a result of the recent U.S. Supreme Court ruling and FCC order concerning wholesale broadband access; (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 Companys business and should be read in conjunction with the more detailed cautionary statements included in the Companys most recent SEC filings.
Internet America, Inc.
For the Three Months Ended For the Year Ended
6/30/05 6/30/04 6/30/05 6/30/04
Subscribers 53,000 58,000 53,000 58,000
Internet services $2,336 $2,646 $10,063 $12,011
Other 252 1 584 18
Total revenue 2,588 2,647 10,647 12,029
Connectivity and
operations 1,620 1,450 6,518 6,368
Sales and marketing 108 240 607 687
General and
administrative 704 528 2,886 3,702
EBITDA 156 429 636 1,272
Depreciation and
amortization (191) 7 (602) (253)
Interest (expense)
income (9) 8 (15) 98
Net (loss) income $(44) $444 $19 $1,117
Basic (loss) income
per share $(0.01) $0.04 $0.00 $0.11
Weighted average
shares - basic 11,519,990 10,441,487 10,771,571 10,409,116
Diluted (loss)
income per share $(0.01) $0.04 $0.00 $0.11
Weighted average
shares - diluted 11,562,756 10,441,487 10,835,249 10,409,116
Reconciliation of net income (a GAAP measure) to EBITDA (a Non-GAAP measure) (in thousands):
For the Three Months Ended For the Year Ended
6/30/05 6/30/04 6/30/05 6/30/04
Net (loss) income $(44) $444 $19 $1,117
Add:
Depreciation and
amortization 191 (7) 602 253
Interest expense (income) 9 (8) 15 (98)
EBITDA $156 $429 $636 $1,272
For the Year Ended
6/30/05 6/30/04
Current assets $2,766 $2,165
Property and equipment, net 712 298
Other assets, net 4,905 4,361
Total assets $8,383 $6,824
Current liabilities $2,661 $2,893
Long-term liabilities 293 ---
Total stockholders' equity 5,429 3,931
Total liabilities and stockholders' equity $8,383 $6,824
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