Internet America, Inc. (OTCBB:GEEK) today announced results for the fiscal third quarter ended March 31, 2010. Total revenues for the third quarter decreased by 2.5% to approximately $1,874,000, compared to total revenues of approximately $1,923,000 in the third quarter of 2009, and net loss for the third quarter of 2010 was approximately $159,000, or a loss of $0.01 per share, compared to net loss of approximately $492,000, or $0.03 per share, in the same period last year. Adjusted EBITDA income (earnings before interest, taxes, stock based compensation, and depreciation and amortization) was approximately $121,000 in the third quarter compared to adjusted EBITDA loss of approximately $194,000 in the third quarter a year ago. Total subscriber count decreased to 26,200 on March 31, 2010 compared to 27,500 subscribers at the end of the same period last year due to the anticipated decline of dial-up Internet service customers and an increase in wireless broadband Internet subscriber count, which increased by 400, or 5.0%, to approximately 8,400 as of March 31, 2010, from 8,000 as of March 31, 2009.
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 Fax-2-Email, 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 adjusted 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. Adjusted 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 the expected rate, (2) we will not improve adjusted EBITDA, profitability or product margins, (3) we will not form additional partnerships with public entities seeking to participate in grant programs or those partnerships may not be successful, (4) we will not expand our coverage in public-private partnerships with state or local governments, utility providers, or other entities, (5) Internet revenue in high-speed broadband will continue to increase at a slower pace than the decrease in other Internet services resulting in greater operating losses in future periods, (6) financing will not be available to us if and as needed, (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 or by regulatory changes, (10) service interruptions or impediments could harm our business, (11) 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, (12) government regulations could force us to change our business practices, (13) we may be unable to hire and retain qualified personnel, including our key executive officers, (14) future acquisitions of wireless broadband Internet customers and infrastructure may not be available on attractive terms and if available we may not successfully integrate those acquisitions into our operations, (15) provisions in our certificate of incorporation, bylaws and shareholder rights plan could limit our share price and delay a change of management, and (16) our stock price has been volatile historically and may continue to be volatile. 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.
Internet America, Inc.
Unaudited Financial Summary
(in thousands, except per share data and subscriber count)
|Statement of Operations Data:|
|Wireless Broadband Internet Subscribers||8,400||8,000|
|Operating Costs & Expenses:|
|Connectivity & Operations||1,234||1,272|
|Sales & Marketing||74||70|
|General & Administrative||510||793|
|Provision for Bad Debt||-||3|
|Depreciation & Amortization||251||257|
|Gain from Restructuring of Debt||(52||)||-|
|Adjusted EBITDA Income (Loss)||121||(194||)|
|Interest Expense, Net||(16||)||(20||)|
|Basic & Diluted Loss Per Share||$||(0.01||)||$||(0.03||)|
|Weighted Average Basic & Diluted Shares||16,559||16,857|
|Reconciliation of Net Loss (a GAAP Measure) to adjusted EBITDA Income/(Loss) (a Non-GAAP Measure)|
|Depreciation & Amortization||251||257|
|Stock based compensation||13||21|
|Interest Expense, Net||16||20|
|Adjusted EBITDA Income/(Loss)||$||121||$||(194||)|
Balance Sheet Data:
|Property & Equipment, Net||1,898||2,188|
|Other Assets, Net||2,864||4,399|
|Total Stockholders' Equity||3,839||7,047|
Total Liabilities & Stockholders' Equity
William E. Ladin, Jr., 713-968-2500
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