MSPG beats the street $0.24 cents versus estimates of $0.18. MindSpring Announces Second Quarter Results;\Continuing the Commitment
Business Wire - July 22, 1998 17:33
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ATLANTA--(BUSINESS WIRE)--July 22, 1998--MindSpring Enterprises, Inc.
(Nasdaq:MSPG) today announced results for the second quarter and six months ended June 30,
1998.
"One of our Core Values and Beliefs is to 'do what we say we are going to do,' and with our
second quarter financial results we have done just that," said Charles M. Brewer, MindSpring's
chairman and chief executive officer. "We had another quarter of record revenues, strong
subscriber growth, and profitable operations. Our financial results continue to point to the core of
what kind of company we are. For us, the value chain begins with how we treat each other, and
what it is like to work for MindSpring. In turn, our employees treat our customers really well. And
if we make our customers' experience great, it drives superior financial results and profitability."
Total revenues for the second quarter were $25,060,000 compared with $21,384,000 in the prior
quarter, and $11,601,000 for the second quarter of 1997. The Company's net profit of
$2,020,000, or $0.24 per share on a diluted basis, for the second quarter of 1998 compared with
a net profit of $860,000, or $0.11 per share, for the first quarter of 1998, and a net loss of
($1,430,000), or ($0.19) per share, for the second quarter of 1997.
MindSpring has approximately 393,000 members as of the end of the second quarter, up from
341,000 at the end of the prior quarter and 183,000 in the second quarter of 1997. Included in
the total are approximately 15,000 Web Hosting customers, up from 12,000 in the prior quarter
and 7,000 in the second quarter of 1997.
"We are continuously evaluating the build vs. buy economic trade offs of our network.
Accordingly, during the second quarter, we opened our own Points of Presence (POPs) in the
Dallas/Ft. Worth and metropolitan Washington, DC areas. We also added another third-party
access provider, allowing us further flexibility to cost effectively manage our growth, while ensuring
high service levels," Brewer stated.
"In the second quarter, our dial-up service received PC World magazine's World Class Award for
the best Internet service provider and Smart Money magazine's Best Buy recommendation, and
our Web Hosting service received a Best Buy from Home Office Computing magazine," continued
Brewer. "We received these accolades largely because of our customer support services, which
underscores what our customers have been telling us -- service matters in this business. We are
proud of our customer support centers and the level of service they offer. They are a key
differentiator for our company, and we think that service and support will become an even more
important factor in our industry as we move forward."
In June of 1998, MindSpring completed a secondary offering of 1,000,000 shares of its common
stock. The Company intends to use the net proceeds from this offering to fund expansion of the
Company's business and for additional working capital, continued network expansion, and the
possible acquisition of subscriber accounts or complementary businesses.
During the quarter, MindSpring also announced a new value-added reselling (VAR) program for
its Web Hosting product and prepayment discount pricing for its dial-up service.
On June 24, 1998, the Company announced a three-for-one stock split in the form of a stock
dividend. Stockholders of record at the market close on July 9, 1998 will receive two additional
shares of the Company's common stock on July 24, 1998. The per share results reported herein
do not reflect the effects of the stock split, however the Company will report these numbers on a
post-split basis in its second quarter 10-Q filing to the Securities and Exchange Commission.
MindSpring is a leading Internet service provider focusing on delivering outstanding service and
support to its customers. By following its Core Values and Beliefs, MindSpring is committed to
doing an exceptional job of serving its customers, its employees, its owners and its community.
MindSpring subscribers can browse the World Wide Web, send electronic mail, participate in
informative on-line chats and access over 20,000 newsgroups. MindSpring offers local Internet
service in more than 375 locations throughout the United States. MindSpring is also a leading
provider of Web Hosting services. To learn more about MindSpring and its services, visit its web
site at www.mindspring.com or call (800) 719-4332.
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