© 2010 Internet America, Inc. Houston, Texas
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Internet America Announces First Quarter Financial Results
DALLAS, November 14, 2005 Internet America, Inc. (OTCBB: GEEK) announced today results for its first fiscal quarter ending September 30, 2005. Results for the quarter included EBITDA (earnings before interest, taxes, depreciation and amortization) of $330,000 versus $294,000 for the same period in 2004 on net income of $109,000 versus $238,000 for the same period in 2004. The decline in net income was primarily attributable to an increase in depreciation and amortization resulting from capital expenditures associated with our rural build out strategy. Earnings per share were $.01 compared to $.02 for the quarter ended September 30, 2004. The Company reported first quarter revenue of $2.6 million compared to $2.5 million for the quarter ended September 30, 2004. Internet Americas subscriber count was 51,000 at September 30, 2005 compared to 58,000 at September 30, 2004. Billy Ladin, CEO of Internet America said, Our results, especially the improvement in EBITDA, are an indication of the Companys transition to its strategy of providing wireless Internet access services to under-served and non-served markets in rural areas through internal growth in existing markets, acquisitions and new market development. We continue to be cautiously optimistic that the execution of this strategy will provide desirable results for the Company. Ladin added, There continues to be opportunity for expansion in our targeted geographic areas, both for reasonably priced acquisitions and for de-novo expansion and we will continue to review, and act upon, those opportunities that we believe will provide sustainable, long term value. Internet America is a leading Internet service provider primarily serving the Texas market. Based in Dallas, 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 Companys web site at www.internetamerica.com. In this press release, the Company refers to a non-GAAP financial measure called EBITDA because of managements belief that this measure is a financial indicator of the Companys 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 investments recommendations of companies in the Companys 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 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
9/30/05 9/30/04
Subscribers 51,000 58,000
Internet services $ 2,242 $ 2,480
Other 406 21
Total revenue 2,648 2,501
Connectivity and operations 1,535 1,378
Sales and marketing 75 159
General and administrative 708 670
EBITDA 330 294
Depreciation and amortization (217) (64)
Interest (expense) income (4) 8
Net income $ 109 $ 238
Basic income per share $ 0.01 $ 0.02
Weighted average shares - basic 12,514,812 10,462,903
Diluted income per share $ 0.01 $ 0.02
Weighted average shares - diluted 12,523,761 10,469,461
Reconciliation of net income (a GAAP measure) to EBITDA (a Non-GAAP
measure)
(in thousands):
For the Three Months Ended
9/30/05 9/30/04
Net income $ 109 $ 238
Add:
Depreciation and amortization 217 64
Interest expense (income) 4 (8)
EBITDA $ 330 $ 294
As of
9/30/05 9/30/04
Current assets $2,571 $2,064
Property and equipment, net 809 469
Other assets, net 4,962 4,818
Total assets $8,342 $7,351
Current liabilities $2,436 $2,939
Long-term liabilities 330 210
Total stockholders' equity 5,576 4,202
Total liabilities and stockholders' equity $8,342 $7,351
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