Earnings are out. .04 eps frti showing $9 bid
Leapnet, Inc. Reports $0.04 Profit for Fiscal Third Quarter
CHICAGO, Dec 9, 1999 (BUSINESS WIRE) --
Quantum Leap Internet Revenue Growth of 145% For First Nine
Months
Leapnet, Inc. (NASDAQ: LEAP), today reported results for its fiscal third quarter and nine months ended October 31, 1999. For the quarter,
revenues increased 13.1% to 9.5 million, compared to $8.4 million in the same period last year. Net income was approximately $600,000, or
$0.04 per diluted share, compared to a net loss of $16.6 million, or $1.22 per diluted share in the same period last year, which included a
one-time write off of goodwill and a charge associated with establishing a reserve against a deferred tax asset. Internet revenues for the
quarter posted at Quantum Leap Communications, Leapnet's Internet development and communications subsidiary, increased 163% to $3.4 million
compared to $1.3 million for the same period one year ago. For the nine-month period, Quantum Leap's revenues increased 145% to $7.4 million
compared to $3.0 million for the same period one year ago. For the nine-month period, Leapnet revenues were $27.2 million, compared to $27.8
million for the year-ago period. Net income for the nine-month period was approximately $965,000, or $0.07 per diluted share, compared to a
net loss of $16.5 million or $1.21 per diluted share for the comparable year-ago period, which included a one-time write off of goodwill and
a charge associated with establishing a reserve against a deferred tax asset. Frederick A. Smith, Chairman and CEO of Leapnet stated, "I am
extremely pleased with Quantum Leap's Internet revenue growth of 145% through the first nine months of the fiscal year, well exceeding our
goal of 100% revenue growth for the year. The team at Quantum Leap has worked hard to achieve organic growth and profitability. Looking
ahead, we have set aggressive goals for next year that include 100% revenue growth with projected revenues of $20 million. With the addition
of Wal-Mart Stores and SAM's Club to Quantum Leap's existing roster of clients, which include American Airlines, Microsoft and Ernst &
Young, we remain confident in our business plan." Mr. Smith added, "As we pursue our goals, we have also addressed certain operational
issues facing Quantum Leap as it experiences rapid growth. For example, Quantum Leap will move into a new state-of-the- art facility, three
times larger than its existing facilities, before the end of this year. This move, coupled with the addition of a senior level human
resources executive, will help to provide a steady stream of talent to meet our growing client needs." Mr. Smith commented on the operations
of Leapnet subsidiary YAR Communications. "Our global language service business, YAR, has been steadily shifting its concentration from
print media to a focus on localizing Internet content for global brands. In the past year, we have steadily grown Internet revenues at YAR."
Mr. Smith concluded with comments on new subsidiary, Eagle Technology Partners. "We are also confident that with the high caliber of talent
that we have assembled, our e-business consulting and systems integration subsidiary, Eagle Technology Partners, will soon represent a
meaningful component of our Internet revenue growth plan." Leapnet, Inc. (NASDAQ: LEAP), develops creative and technology solutions for the
wired world by combining expertise in Internet advertising and development, global marketing communications and traditional brand
advertising. Its subsidiaries are Quantum Leap Communications, YAR Communications, Eagle Technology Partners and The Leap Partnership.
Headquartered in Chicago, the Company has offices in New York and Los Angeles. More information on Leapnet can be found at
leapnet.com. This press release contains forward-looking statements (within the meaning of the Private Securities Litigation
Reform Act of 1995) that involve risks and uncertainties. A number of important factors could cause the Company's actual results,
performance or achievements for fiscal 2000 and beyond to differ materially from that expressed in such forward-looking statements. These
factors are set forth in the Company's filings with the Securities and Exchange Commission and include, without limitation, material changes
in economic conditions in the markets served by the Company's clients, competition in the Company's industry, uncertainties relating to the
developing market for new media, changing technologies, seasonality and the Company's dependence on key clients and projects and key
personnel. Loss of a key client or a significant reduction in business from a key client could have a significant adverse effect on the
Company's business and results of operations.
LEAPNET, INC. AND SUBSIDIARIES
Summary Quarterly Financial Data
Unaudited Condensed Consolidated Statement of Operations
(In thousands - 000's)
Three Months Nine Months
Ended October 31 Ended October 31
-------------------------- -----------------------
1999 1998 1999 1998
------------ ----------- ----------- -----------
Revenues $ 9,514 $ 8,410 $ 27,248 $ 27,776
Operating Expenses (8,929) (9,890) (26,587) (30,125)
Impairment of
long-term assets 0 (9,240) 0 (9,240)
Restructuring
expenses 0 (738) 0 (738)
------------ ------------ ------------ -----------
Total Expenses (8,929) (19,868) (26,587) (40,103)
------------ ------------ ------------ -----------
Operating Income
/ (Loss) 585 (11,458) 661 (12,327)
Loss on
divestitures 0 (1,802) 0 (1,802)
Gain on sale of
building 0 0 0 1,155
Net other income
(expense) 15 (28) 304 (147)
------------ ------------ ------------ -----------
Net Income/(Loss)
before Income
Taxes 600 (13,288) 965 (13,121)
Income tax
(expense) /
benefit 0 (3,307) 0 (3,385)
------------ ------------ ------------ -----------
Net Income /
(Loss) $ 600 $ (16,595) $ 965 $ (16,506)
============ ============ ============ ===========
Net income /
(loss) per share
Basic $ 0.04 $ (1.22) $ 0.07 $ (1.21)
============ ============ ============ =========== Diluted $ 0.04 $ (1.22) $ 0.07 $ (1.21)
============ ============ ============ ===========
Shares used in per
share
calculations
Basic 14,154,229 13,648,866 14,145,772 13,646,199
============ ============ ============ =========== Diluted 14,946,918 13,648,866 14,838,461 13,646,199
============ ============ ============ ===========
Copyright (C) 1999 Business Wire. All rights reserved.
Distributed via COMTEX.
CONTACT: Leapnet, Inc.
Beth Pastor
VP of Corporate Communications
(312) 475-1254
pastor@leapnet.com
or
Morgen-Walke Associates
Investor Relations:
Cheryl Schneider/Hulus Alpay
Press: Michael McMullan/David Nugent
212-850-5600
WEB PAGE: businesswire.com
GEOGRAPHY: ILLINOIS
INDUSTRY CODE: INTERNET
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