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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 10, 2000
Internet America, Inc.
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(Exact name of registrant as specified in its charter)
Texas 000-25147 86-0778979
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Dallas Center, 350 N. St. Paul Street, Suite 3000, Dallas, Texas 75201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 861-2500
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Item 5. Other Events.
On May 10, 2000, Internet America, Inc., a Texas corporation, issued a
press release announcing preliminary financial results for the quarter ended
March 31, 2000 and its intent to restate its first and second fiscal quarter
results to adjust for a data processing error that reported certain deferred
revenue as access revenue.
The press release is attached hereto as Exhibit 99.1 and incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following is a list of exhibits filed as part of this Current
Report on Form 8-K:
Exhibit No. Description
99.1 Press Release of Internet America, Inc. dated May 10, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNET AMERICA, INC.
Date: May 11, 2000 By: /s/ James T. Chaney
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James T. Chaney,
Chief Financial Officer
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INDEX TO EXHIBITS
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<CAPTION>
Exhibit No. Description
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<S> <C>
99.1 Press Release of Internet America, Inc. dated May 10, 2000
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EXHIBIT 99.1
[INTERNET AMERICA LETTERHEAD]
INTERNET AMERICA REPORTS THIRD QUARTER RESULTS
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Revenue Up 86% Year Over Year; Positive EBITDA Reported
DALLAS, May 10 -- Internet America, Inc. (Nasdaq: GEEK) today announced
record revenue of $8.8 million for its third fiscal quarter ended March 31,
2000, an increase of 86% over revenue of $4.8 million reported for the same
quarter of 1999. Internet America had approximately 153,000 subscribers at March
31, 2000 a 94% increase from 79,000 subscribers at March 31, 1999.
In the third fiscal quarter, Internet America achieved positive EBITDA
(earnings before interest, taxes, depreciation and amortization) for the first
time as a public company. Business services revenue grew by 328% over a year ago
and 80% over the last quarter, DSL orders increased to more than 6,500 and the
Company made major strides towards integrating PDQ.Net, NeoSoft and other
acquisitions.
Excluding amortization of goodwill, the Company reported a quarterly
loss of $0.04 per share at March 31, 2000 compared to a loss of $0.09 per share
a year ago. Goodwill amortization rose to $3.6 million for the third quarter,
due to the acquisitions of PDQ.Net and NeoSoft. Internet America recorded a net
loss of $4.0 million for the quarter, or $0.41 per share, versus a net loss of
approximately $709,000, or $0.10 per share a year ago.
Business services revenue increased significantly, growing from
$500,000 for the quarter ended March 31, 1999 to over $2.1 million for the
latest quarter. Business services revenue has grown from 10.5% of total revenue
a year ago to 24.2% in the March 2000 quarter.
The Company also announced that it will amend its Quarterly Reports on
Form 10-QSB to restate results for the first and second fiscal quarters to
adjust for a data processing error that reported certain deferred revenue as
access revenue. This non-cash adjustment reduces access revenue by approximately
$246,000 for the quarter ended September 30, 1999 and by
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approximately $319,000 for the quarter ended December 31, 1999, resulting in an
additional loss of $0.04 per share for each quarter. This adjustment has no
impact on the Company's past, present or future cash position.
"Turning the corner with positive EBITDA is a result of our relentless
focus on the Company's high-density growth plan," said Mike Maples, president
and chief executive officer of Internet America. "Our high density strategy
emphasizes efficient use of marketing and technical resources by stressing
growth in markets where we have existing infrastructure. Integration of the
Dallas and Houston customer service and marketing operations has improved EBITDA
and cash flow and we are just beginning to realize economies of scale in those
markets."
Maples added, "We continue our impressive top-line growth, climbing
past the 150,000 mark in total subscribers and achieving an annualized revenue
run rate in excess of $35 million. In addition, we are expanding business
services in the areas of broadband, web hosting and domain name registrations."
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 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 Company's web site at www.airmail.net.
This press release may contain forward-looking statements relating to
future financial results or business expectations, which are subject to the many
uncertainties that exist in Internet America's operations and business
environment. Business plans may change as circumstances warrant and actual
results may differ materially as a result of a number of risk factors. These
risk factors include, without limitation, that the Company (1) will not retain
or grow its customer base, (2) will not successfully integrate acquisitions or
achieve operating efficiencies, (3) will not be competitive with existing or new
competitors, (4) will not keep up with industry pricing and technology trends
and evolving industry standards, and (5) will be adversely affected by
dependence on network infrastructure, telecommunications carriers and other
suppliers, by regulatory changes and by general economic and business
conditions. 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.
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[INTERNET AMERICA LOGO]
Internet America, Inc.
(Nasdaq: GEEK)
Unaudited Financial Summary
(in thousands, except per share and share data and subscriber count)
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Three Months Ended Nine Months Ended
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3/31/99 3/31/00 3/31/99 3/31/00(1)
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<S> <C> <C> <C> <C>
Subscribers 79, 000 153,000 79,000 153,000
Access revenue $ 4,221 $ 6,617 $ 11,436 $ 16,517
Business services revenue 500 2,139 1,620 4,246
Other revenue 35 89 80 386
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Total revenue 4,756 8,845 13,136 21,149
Connectivity and operations 2,036 4,985 6,284 12,067
Sales and marketing:
Salaries and wages 225 571 498 1,350
Other 1,916 915 3,706 3,181
General & administrative 1,057 2,331 2,824 5,515
EBITDA(2) (478) 43 (176) (964)
Depreciation 357 454 1,192 1,331
Goodwill amortization 71 3,583 213 6,596
Interest (income) expense (197) 5 (26) (45)
Income tax expense -- -- 10 --
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Net income (loss) $ (709) $ (3,999) $ (1,565) $ (8,846)
Basic earnings (loss) per share $ (0.10) $ (0.41) $ (0.31) $ (1.07)
Weighted average shares - basic 6,762,294 9,641,590 5,081,299 8,260,053
Fully diluted earnings (loss) per share $ (0.10) $ (0.41) $ (0.31) $ (1.07)
Weighted average shares - fully diluted 6,762,294 9,641,590 5,081,299 8,260,053
Net (loss) plus goodwill amortization (638) (416) (1,352) (2,250)
Cash basis EPS(3) $ (0.09) $ (0.04) $ (0.27) $ (0.27)
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<TABLE>
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6/30/99 3/31/00
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Current assets $ 7,095 $ 3,551
Property and equipment, net 2,622 2,808
Other assets 9,196 36,538
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Total assets $18,913 $42,897
Current liabilities $ 7,034 $ 9,245
Long-term debt, net 152 204
Long-term capital lease obligations, net 102 217
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Total liabilities 7,288 9,666
Total stockholders' equity 11,625 33,231
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Total liabilities and stockholders' equity $18,913 $42,897
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(1) Reflects the restated amounts for the first two quarters of fiscal 2000.
(2) EBITDA: Earnings before Interest, Taxes and Depreciation and Amortization.
EBITDA is not a measurement of financial performance under generally accepted
accounting principles (GAAP) and should not be considered an alternative to net
income as a measure of performance.
(3) Cash Basis EPS represents earnings per share, excluding goodwill
amortization. Cash Basis EPS is not a measurement of financial performance under
generally accepted accounting principles (GAAP) and should not be considered an
alternative to net income as a measure of performance.
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