Prodigy Reports Positive EBITDA in First Quarter; Prodigy Exceeds Expectations, Tops 3.1 Million Subscribers.Business Editors AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas--(BUSINESS WIRE)--April 26, 2001 Prodigy An online information service that provides access to the Internet, e-mail and a variety of databases. Launched in 1988, Prodigy was the first consumer-oriented online service in the U.S. Communications Corporation (Nasdaq:PRGY), a leading national Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) serving the largest number of DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary subscribers, today announced better-than-expected earnings and that it topped 3.1 million owned and managed subscribers in the first quarter ended March 31, 2001. "We said we would turn Prodigy around and we have delivered on our promise. Prodigy is reporting positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Charles William Foster, Jr. (April 12, 1828 – January 9, 1904) was a U.S. Republican politician from Ohio. , chairman of Prodigy. "With financial stability forecasted for the year, Prodigy also expects to report positive cash flow by early next year, if not earlier." Excluding minority interest, Prodigy reported EBITDA for the first quarter of $10.5 million, compared to an EBITDA loss of ($8.1) million in the year ago period. Prodigy also reported its owned and managed subscribers in the first quarter grew to 3.1 million, including approximately 700,000 DSL, 643,000 Telmex, and 1.8 million dial subscribers. Net revenue for the first quarter increased 78 percent to $92 million from $52 million reported in the same period a year ago. Net loss for the quarter was ($34.7) million, or ($0.49) per share, compared with net loss of ($34.9) million, or ($0.54) per share, reported for the first quarter of 2000. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter was ($56.7) million compared with ($32.3) million in the year ago period. "Prodigy intends to remain a leading national Internet service provider by developing broadband Internet See broadband. services that make Prodigy more than just an access tool. In an always-on world, we expect Prodigy to become a day-in and day-out way of life for our customers," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Roth, president and chief executive officer. Roth said Prodigy is well positioned among the national ISPs because of four inherent competitive advantages, which include its business model that is designed for stable, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. and profitable growth; its strong delivery and execution of ISP services; its diverse customer channels; and its nationally recognized brand. "Between now and the end of the year, Prodigy will roll out new features and functionality to its portals and introduce new products," Roth said. "With these enhancements - from a new web browser The program that serves as your front end to the Web on the Internet. In order to view a site, you type its address (URL) into the browser's Location field; for example, www.computerlanguage.com, and the home page of that site is downloaded to you. , home page and customized features to improved e-mail and instant messaging Exchanging text messages in real time between two or more people logged into a particular instant messaging (IM) service. Instant messaging is more interactive than e-mail because messages are sent immediately, whereas e-mail messages can be queued up in a mail server for seconds or - Prodigy will be a more individualized in·di·vid·u·al·ize tr.v. in·di·vid·u·al·ized, in·di·vid·u·al·iz·ing, in·di·vid·u·al·iz·es 1. To give individuality to. 2. To consider or treat individually; particularize. 3. Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the home for customers and a more attractive space for advertisers and partners." Guidance For the second quarter ending June June: see month. 30, 2001, Prodigy expects net revenue to be in the range of $86 million to $90 million. Gross margin is expected to be approximately 50 percent to 51 percent. EBITDA for the second quarter is expected to be approximately $5 million to $8 million. For the full year ending December December: see month. 31, 2001, Prodigy expects to have between 3.4 million and 3.7 million subscribers. Total net revenue for the year is anticipated to be in the range of $355 million to $365 million. Gross margins are anticipated to be in the range of 51 percent to 52 percent. Prodigy expects EBITDA for the year to be in the range of $31 million to $34 million. Foster, Roth and Prodigy CFO See Chief Financial Officer. Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. Craft will host a 10 a.m. ET conference call today to discuss first-quarter 2001 results. The call-in number is 952/556-2868. The call will be simultaneously broadcasted live over the Internet; for information on the webcast, go to www. prodigy.com and click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." About Prodigy Communications Corporation (www.prodigy.com): Prodigy Communications Corporation (Nasdaq:PRGY) is one of the nation's largest Internet service providers serving both dial and DSL subscribers. With its alliance with SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications, Prodigy is the industry leader in serving DSL subscribers. Prodigy delivers fast and reliable Internet access See how to access the Internet. and user-friendly Internet-based products, services and information via a nationwide network covering more than 850 locations in all 50 states, allowing more than 90 percent of the U.S. population to access the Prodigy t service with a local telephone call. Prodigy features superior content, e-mail and e-mail attachment A file that rides along with an e-mail message. The attached file can be of any type. E-mail programs make it easy to attach a file. For example, in Eudora, all you do is select Attach from the Message menu, browse through the folder hierarchy to find the file you want and then double capabilities, Prodigy Instant Messaging, Prodigy Chat, and Prodigy Online Communities, combined with the accessibility and freedom of direct access to the World Wide Web for all users. Prodigy Biz Corporation, a subsidiary of Prodigy, offers a powerful suite of specially designed Internet products and services for small business owners. Prodigy(R) en espanol, is the nation's first-ever, fully bilingual bi·lin·gual adj. 1. a. Using or able to use two languages, especially with equal or nearly equal fluency. b. Spanish/English-language Internet service created especially for the U.S. Spanish-speaking population. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the intense competition in Prodigy's industry, subscriber turnover, disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in Prodigy's network services or in other services provided by third parties, the challenges of integrating the Internet businesses of Prodigy and SBC Communications Inc., the possible failure to achieve the anticipated benefits of the agreements between Prodigy and SBC, the possible unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail of sufficient financing to Prodigy as needed as needed prn. See prn order. , as
well as the risk factors detailed from time to time in Prodigy's
periodic reports and registration statements filed with the Securities
and Exchange Commission. Prodigy's business and operations are
operated by a limited partnership, called Prodigy Communications Limited
Partnership, of which Prodigy is the general partner and owns an
approximate 57 percent interest and SBC Communications owns an
approximate 43 percent interest.- FINANCIALS ATTACHED -
Prodigy Communications Corporation
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share and subscriber amounts)
Quarter Ended
March 31,
-------------
2001 2000
---- ----
Revenues
Online service revenues $ 76,479 $ 56,929
Less: amortization of
subscriber rebates (12,814) (12,987)
----------- -----------
Online service revenues,
net of amortization
of subscriber rebates 63,665 43,942
Subscriber management fees 22,137 2,605
Other 6,515 5,416
----------- -----------
Total revenues 92,317 51,963
----------- -----------
Operating expenses
Cost of revenues 40,787 29,415
Sales and marketing 12,205 18,769
Product development 4,361 3,282
General and administrative (1) 37,302 21,609
Depreciation and amortization 51,414 8,885
Amortization of subscriber
acquisition costs 2,992 2,329
----------- -----------
Total operating expenses 149,061 84,289
----------- -----------
Operating loss (56,744) (32,326)
Interest expense, net 3,752 2,613
Gain on sale of
assets/equity investments (25)
Minority interest in net loss (25,771)
----------- -----------
Net loss ($ 34,725) ($ 34,914)
=========== ===========
EPS basic ($ 0.49) ($ 0.54)
=========== ===========
Weighted average
common shares outstanding 70,234 64,565
=========== ===========
Other data:
Internet subscribers
managed at period end 3,087,000 1,526,000
=========== ===========
EBITDA (2) $ 10,476 ($ 8,100)
=========== ===========
EBITDA (2) less integration
and restructuring costs $ 12,874 ($ 6,358)
=========== ===========
(1) Includes SBC and Flashnet non-recurring integration costs of
$2,398 and $1,742 in first quarter 2001 and 2000,
respectively.
(2) EBITDA represents net loss plus net interest expense,
depreciation and amortization, amortization of subscriber
acquisition cost, amortization of contract subscriber
("rebate") programs. EBITDA should not be construed as an
alternative to operating income (as determined in accordance
with U.S. GAAP), as a measure of the Company's operating
performance, or as an alternative to cash flows from operating
activities (as determined in accordance with U.S. GAAP), or as
a measure of the Company's liquidity.
Prodigy Communications Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts)
March 31, December 31,
2001 2000
-------- -----------
Assets
Current assets:
Cash and cash equivalents $ 24,575 $ 23,042
Accounts receivable, net 7,619 7,683
Other current assets 4,050 6,898
--------- ---------
Total current assets 36,244 37,623
Property and equipment, net 26,256 30,005
Tradename and other intangible
assets, net 532,012 596,350
Subscriber acquisition costs, net 112,706 129,815
Restricted cash and other 8,118 8,872
--------- ---------
Total assets $ 715,336 $ 802,665
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 52,390 $ 66,482
Unearned revenues 27,106 28,580
Capital lease obligations 6,605 6,879
Accrued restructuring costs 16,499 20,724
--------- ---------
Total current liabilities 102,600 122,665
Notes payable 131,263 137,000
Capital lease obligations - long term 5,473 6,535
--------- ---------
Total liabilities 239,336 266,200
--------- ---------
Minority interest 203,602 229,373
Stockholders' equity:
Class A common stock: $.01 par value;
70,245,820 and 70,212,598 shares issued and
outstanding at March 31, 2001 and
December 31, 2000, respectively 702 702
Class B common stock: $.01 par value; 1 share
issued and outstanding at March 31, 2001
and December 31, 2000, respectively
Additional paid-in capital 889,319 889,288
Accumulated deficit (617,623) (582,898)
--------- ---------
Total stockholders' equity 272,398 307,092
--------- ---------
Total liabilities and stockholders' equity $ 715,336 $ 802,665
========= =========
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