FOR IMMEDIATE RELEASE
LEAP GROUP REPORTS THIRD CONSECUTIVE QUARTER OF PROFIT AS INTERNET BUSINESS POSTS SIGNIFICANT GROWTH
CHICAGO, September 15, 1998 --The Leap Group, Inc. (Nasdaq: LEAP), today reported its third consecutive quarter of profit in announcing results for the second quarter ended July 31, 1998. Consolidated revenues increased 18.7% to $9.0 million for the second quarter, compared to $7.6 million for the same quarter a year ago.
The Company reported net income of $73,894, or $0.01 per share, for the second quarter ended July 31, 1998, compared to a net loss of $1.6 million, or ($0.11) per share, for the same quarter a year ago.
For the six months ended July 31, 1998, revenues increased 60.8% to $19.4 million, compared to $12.0 million in the comparable year-ago period. For the six months ended July 31, 1998, the Company reported a net income of $88,880 or $0.01 per share, versus a net loss of $2.7 million, or ($0.20) per share, for the comparable period a year ago.
Leap's Chairman and CEO, Frederick A. Smith commented, "We continue to work very hard during this turnaround period to keep costs in line with revenues; to increase and diversify our revenues; and to achieve and maintain profitability."
Quantum Leap Communications, the company's Internet advertising agency, grew 167%, without acquisition, during the first six months of the year compared to the same time period last year. "Quantum Leap embodies our Internet strategy as a company.
It has steadily built a business with top-notch clients such as American Airlines, MSNBC, OnHealth Network and FTD. We expect our Internet-related revenues to grow as Quantum expands its business and as we pursue other avenues for growth in this sector," Smith noted.
YAR Communications and the Kang & Lee operations of One World Communications experienced reduced revenues during the second quarter, Smith said, due to cutbacks at AT&T, a major client for both subsidiaries. The company is focused, Smith said, on completing the transaction to sell substantially all of the assets and certain liabilities of One World Communications, Inc., including the Kang & Lee operations, and the AT&T business of YAR.
Smith further noted, "We are executing our strategic business plan with each consecutive quarter of profit. We will continue to focus on goals that will take us to the next stage of our development as an Internet advertising agency."
The Leap Group, Inc., (Nasdaq: LEAP) is an Internet advertising agency providing innovative consumer marketing, advertising and Internet-related services and products. Its subsidiaries are Quantum Leap Communications, The Leap Partnership and One World Communications, which combines the operations of YAR Communications, acquired in April 1997, and Kang & Lee Advertising, acquired in November 1997. Headquartered in Chicago, the company has offices in New York, Los Angeles and San Francisco. More information on The Leap Group can be found at http//:www.leapgroup.com.
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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 1999 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.
CONTACT:
Beth Pastor
P: 312-494-3850
e-mail: pastor@leapnet.com
Financial Information to Follow
The Leap Group, Inc and Subsidiaries
Summary Quarterly Financial Data
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Six Months
Ended July 31 Ended July 31
1998 1997 1998 1997
(in thousands)
Revenues $ 8,991 $ 7,573 $ 19,366 $ 12,044
Total Operating Expenses (9,989) (10,124) (20,235) (16,866)
Operating Income/Loss (998) (2,551) (869) (4,822)
Net other income (expense) 1,133 (28) 1,036 393
Net Income/(Loss) before
Income Taxes 135 (2,579) 167 (4,429)
Income tax (expense)/benefit (61) 1,023 (78) 1,723
Net Income/(Loss) $ 74 $ (1,556) $ (89) $ (2,706)
Net income/(loss) per share
Basic $ 0.01 $ (0.11) $ 0.01 $ (0.20)
Diluted $ 0.01 $ (0.11) $ 0.01 $ (0.20)
Shares used in per share
calculations
Basic 13,640,866 13,581,334 13,644,866 13,595,556
Diluted 13,989,668 13,581,334 13,993,668 13,595,556
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