April 21, 1999 16:46
Online System Services Reports First Quarter Results And Final
Results For 1998
DENVER, April 21 /PRNewswire/ -- ONLINE SYSTEM SERVICES, INC. ("OSS") (Nasdaq: WEBB) today announced results for its first quarter ended March 31, 1999.
Net sales in the quarter were $288,282 compared with net sales of $727,239 in the first quarter of 1998. Loss from operations was $2,637,599, versus a loss from operations of $1,517,848 in the same quarter last year. The net loss available to common stockholders was $6,781,400 or $(1.28) per share as compared to $1,969,804 or $(0.59) per share for the same quarter last year. The 1999 net loss available to common stockholders includes approximately $4.2 million of non-cash charges related to the Company's financing transactions.
"The losses were anticipated and reflect major transitions and initiatives currently underway," stated Steve Adams, Chairman and C.E.O. "We expect to see an improvement in revenues during the next several quarters as the transition to our new business model is substantially completed," he added. Adams noted the following highlights for the first quarter:
* OSS acquired NetIgnite, a developer of directory-based Web-publishing services. With this acquisition, OSS is backing a proven Internet start-up veteran and building a Company that is well-positioned to dominate the billion dollar Web publishing and local advertising markets, as well as gain deep traction in the small and medium-size business sector. The acquisition will also introduce new business opportunities and increase OSS' ability to drive recurrent revenues from advertising, commercial content services and e-commerce.
* OSS' communications, content and commerce services are now subscribed to by 2,000 associates of RE/MAX International. The usage demonstrates OSS' ability to successfully integrate advanced communications and commerce capabilities into comprehensive Internet solutions that meet the needs of the business world.
* OSS entered into an agreement to provide its i2u banking solution to CU Cooperative Systems, the country's leading credit union electronic funds transfer network. The contract, which OSS projects to over $25 million in revenue over the five-year term, significantly increases OSS' distribution channels and will rapidly accelerate user adoption of its i2u content services.
* OSS introduced shop2u, a new e-commerce hosting service that is an integral component of the Company's e-commerce hosting engine. shop2u is the first of several turn-key content services which target businesses within a local community, and will be fully integrated with OSS' existing Web and community hosting services.
FINANCIAL RECAP Three months ended March 31
(unaudited) 1999 1998
Net sales $288,282 $727,239
Loss from operations ($2,637,599) ($1,517,848)
Net loss ($2,576,824) ($1,488,709)
Net loss available to common stockholders ($6,781,400) ($1,969,804)
Loss per share, basic and diluted $(1.28) $(0.59)
Weighted average shares outstanding 5,313,368 3,335,687
The Company also reported that the final results for 1998 showed a net loss available to common stockholders of $15,762,372, compared to the previously-reported net loss to common stockholders of $15,055,443. The $706,929 increase in the net loss available to stockholders is attributable to additional non-cash charges relating to the Company's financing transactions. At the time that the Company released results for 1998, the Company and its auditors believed that these charges should not exceed the redemption value of the securities offered. Following discussions with representatives of the SEC, it was determined that these non-cash charges could exceed the redemption value. These additional non-cash charges do not change the Company's net loss from operations for the year, but do result in an increase in the loss per share, basic and diluted, from $4.16 to $4.35. |
