FLASHNET REPORTS RECORD REVENUE
Announces Intent to Merge with Prodigy
Fort Worth, Texas - November 11, 1999 - FlashNet Communications, Inc. (NASDAQ: FLAS), a leading nationwide Internet access provider, announced record revenues totaling $12.6 million for the third quarter ended September 30, 1999. This reflects a 74 percent increase over revenues of $7.3 million reported in the same period in 1998. On November 8th, 1999, FlashNet entered into a definitive agreement to merge with Prodigy Communications, Corporation (NASDAQ: PRGY).
FlashNet added 24,165 net subscribers for the quarter, a 400 percent increase over the third quarter of 1998. ?This significant increase occurred during a time that is traditionally seen as a slow quarter,? said Russ Wiseman, chief operating officer of FlashNet. FlashNet closed the quarter with 243,683 total subscribers.
Net loss attributable to common shareholders was $(9.3) million or $(.66) per share compared to a net loss of $(5.5) million, or $(.99) per share during the third quarter of 1998. Weighted average shares outstanding increased to 14,159,000 compared to 5,515,000 one year ago. Total shares outstanding at September 30, 1999 were 14,226,616.
Commenting on the Company?s results, Scott Leslie, chief executive officer and co-founder, said: ?I am pleased to announce that FlashNet had record revenue in the third quarter. We are excited about the announced merger with Prodigy and the opportunities that this merger offers the combined companies and our shareholders.?
FlashNet Communications is one of the largest Internet service providers in the U.S., serving consumer and small business customers nationwide. An early pioneer of unlimited use, flat rate pricing, FlashNet offers a full range of Internet services including access services, Web hosting, electronic commerce and software. FlashNet is a leader in providing a safe Internet service for families, businesses and schools with its exclusive Family pack. Based in Fort Worth, TX, FlashNet can be found at www.flash.net.
Safe Harbor Statement: This press release may contain forward-looking statements relating to future financial results or business expectations and, as a result, should be considered as subject to the many uncertainties that exist in the Company?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 factors. Such factors include, but are not limited to: the Company?s expansion and acquisition strategy, the Company?s ability to achieve operating efficiencies, the Company?s dependence on network infrastructure, capacity, telecommunications carriers and other suppliers, industry pricing and technology trends, evolving industry standards, regulatory changes, and general economic and business conditions. These risk factors and additional information are included in the Company?s filings with the Securities and Exchange Commission, including its prospectus dated March 16, 1999.
For further information please contact:
John Ofenloch - Director of Finance
817-759-4837
FlashNet Communications, Inc.
Financial Summary (unaudited and in thousands, except for per share data and subscriber counts)
Three Months Ended
Better
Better
9/30/99 6/30/99 (Worse) 9/30/99 (Worse)
Revenue $12,627 $9,532 32% $7,253 74%
Gross Profit $6,391 $4,857 32% $4,115 55%
Expenses
Sales and Marketing 8,907 5,777 (54%) 2,388 (273%)
General and Admin. 2,626 2,159 (22%) 1,397 (88%)
Ops. and Cust. Support 3,094 2,253 (37%) 1,681 (84%)
Depreciation and Amort. 1,501 1,190 (26%) 774 (94%)
Total 16,128 11,379 (42%) 6,240 (158%)
Loss From Operations (9,737) (6,522) n/a (2,125) n/a
Interest Income (Expense) 467 337 n/a (641) n/a
Loss Before Accretion
on Redeemable Preferred
Stock (9,270) (6,185) n/a (2,766) n/a
Net Loss Attributable to
Common Shareholders (9,270) (6,185) n/a (5,453) n/a
Basic and Diluted EPS1 ($.66) ($.45) n/a ($.99) n/a
Total Subscribers 243,683 219,518 11% 165,614 48%
Balance Sheet Data
Sept 30, June 30,
1999 1999
Current assets $ 29,698 $ 41,925
Property and Equipment, 15,947 13,891
Other Assets 8,891 365
Total Assets $ 54,536 $ 56,181
Current liabilities 32,188 23,944
Capital Lease Obligations, net of current portion 1,803 2,607
Total liabilities 33,991 26,551
Total shareholders? equity (deficit) 20,545 29,630
Total Liabilities and Shareholder Equity $ 54,536 $ 56,181
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