GEEK Internet America Reports Fiscal First Quarter Results

Internet America Reports Fiscal First Quarter ResultsPR Newswire "US Press Releases "
HOUSTON, Nov. 14 /PRNewswire-FirstCall/ -- Internet America, Inc. (OTC Bulletin Board: GEEK) today announced results for the fiscal first quarter ended September 30, 2007. Total revenues for the first quarter increased 4.2% to approximately $2.2 million compared to total revenues of approximately $2.1 million in the first quarter of 2006. Wireless broadband Internet revenue increased by $488,000, or 123% to $886,000 in the first quarter of 2007 and the Company's wireless broadband Internet subscriber count increased by 4,100 to 7,500 as of September 30, 2007, compared to 3,400 as of September 30, 2006. The increase in wireless broadband Internet revenue and subscriber count was due to a combination of growth attributable to four acquisitions completed by the Company over the last twelve months and organic growth. Internet America's total subscriber count decreased to 34,400 at September 30, 2007 compared to 38,500 subscribers at the end of the same period last year. The decrease in total subscriber count was due to the anticipated decline of dial-up Internet service customers from Internet America's legacy dial-up Internet operations.
Net loss for the first quarter of 2007 was approximately $374,000, or a loss of $0.03 per share, compared to net income of approximately $7,000, or $0.00 per share in the same period last year. EBITDA loss (earnings before interest, taxes, depreciation and amortization) was approximately $93,000 in the first quarter compared to EBITDA of approximately $220,000 in the first quarter a year ago. Net income and EBITDA were impacted in the first quarter of 2007 by increased costs associated with connectivity and operations, sales and marketing and general and administrative expenses. These costs were incurred by Internet America in the first quarter of 2007 to support the growth of its wireless broadband Internet operations and in anticipation of organic and acquisition growth initiatives.
Billy Ladin, Chairman and Chief Executive Officer of Internet America, said, "Our quarterly results continued to reflect solid growth in our wireless broadband Internet operations. Despite our total subscriber count declining 10.6% year over year in the first quarter, organic and acquisition growth in our wireless broadband Internet operations was strong and more than made up for the subscriber and revenue decline in our legacy dial-up Internet operations. During the first quarter we increased our investments in people, our network and our sales and marketing efforts in support of our wireless broadband Internet operation's growth initiatives. While these investments had a near-term impact on profitability, we believe these investments will contribute to the growth of our wireless broadband Internet business going forward.
"Subsequent to the end of the first quarter, in October we raised approximately $2.5 million through the issuance of a combination of Series A Preferred Stock and common equity. We continue to be optimistic about the growth potential of our wireless broadband Internet operations and believe this additional capital will help us continue to grow our wireless broadband Internet business."
Internet America is a leading Internet service provider 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 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 be able to identify and negotiate acquisitions of wireless Internet customers and infrastructure on attractive terms; (4) we may not be able to integrate acquisitions of wireless Internet customers and infrastructure into existing operations to achieve operating efficiencies; (5) needed financing will not be available to us if and as needed; (6) we will not continue to achieve operating efficiencies in existing operations; (7) we will not be competitive with existing or new competitors; (8) we will not keep up with industry pricing or technological developments impacting the Internet; (9) 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; (10) service interruptions or impediments could harm our business; (11) we may not be able to protect our proprietary technologies or successfully defend infringement claims and may be required to enter into licensing arrangements on unfavorable terms; (12) we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (13) government regulations could force us to change our business practices; (14) we may be unable to continually develop effective business systems, processes and personnel to support our business; (15) we may be unable to hire and retain qualified personnel, including our key executive officers; (16) provisions in our certificate of incorporation, bylaws and shareholder rights plan could limit our share price and delay a change of management; (17) our stock price has been volatile historically and may continue to be volatile; and (18) some other unforeseen difficulties may occur. This list is intended to identify certain of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere herein. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements included in our other publicly filed reports and documents. Contact
Internet America, Inc.
713.968.2500
investor.relations@airmail.net
Internet America, Inc.
Unaudited Financial Summary
(in thousands, except per share data and subscriber count)
Statement of Operations Data:
Quarter Ended
9/30/2007 9/30/2006
Wireless Broadband Internet Subscribers 7,500 3,400
Total Subscribers 34,400 38,500
Revenue:
Internet Services $2,095 $2,084
Other 77 -
Total Revenue 2,172 2,084
Operating Costs & Expenses:
Connectivity & Operations 1,079 992
Sales & Marketing 139 41
General & Administrative 1,036 830
Provision for Bad Debt 11 1
Depreciation & Amortization 266 207
Operating Income (Loss) (359) 13
EBITDA (Loss) (93) 220
Interest Expense, Net (15) (6)
Minority Interest in Loss of
Consolidated Subsidiary 0 -
Net Income (Loss) $(374) $7
Basic & Diluted Income (Loss) Per Share $(0.03) $0.00
Weighted Average Basic & Diluted Shares 12,546 12,509
Reconciliation of Net Income (a GAAP Measure) to EBITDA (a Non-GAAP
Measure)
Quarter Ended
9/30/2007 9/30/2006
Net Income (Loss) $(374) $7
Add:
Depreciation & Amortization 266 207
Interest Expense 15 6
Minority Interest in Loss of
Consolidated Subsidiary (0) -
EBITDA (Loss) $(93) $220
Balance Sheet Data:
Periods Ending
9/30/2007 9/30/2006
Current Assets $2,346 $1,410
Property & Equipment, Net 1,859 1,031
Other Assets, Net 6,037 4,745
Total Assets $10,242 $7,186
Current Liabilities $3,451 $2,050
Long-Term Liabilities 1,768 264
Total Stockholders' Equity 5,023 4,872
Total Liabilities & Stockholders' Equity $10,242 $7,186
SOURCE Internet America, Inc.