PRGY huge #s after the bell, traded up to $43 after hours, expecting major run tomorrow, keep in mind these numbers are 4Q 98 #s, PRGY 1Q will be explosive.
Prodigy cuts loss; subscriptions surge
By Janet Haney, CBS MarketWatch
Last Update: 6:03 PM ET Mar 11, 1999
Earnings Surprises
Thursday March 11, 4:02 pm Eastern Time
Company Press Release
Prodigy Internet Revenues Up 174%,
Subscribers Up 129%
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--March 11,
1999--Prodigy Communications Corporation (NASDAQ
NMS:PRGY - news) reported results for the fourth quarter and fiscal year ended December 31, 1998,
reflecting:
-- More than a doubling in revenues from Prodigy Internet, -- Substantial reductions in selling, general
and administrative
expenses, and -- Significantly smaller losses in the fourth quarter and fiscal year
ending 1998 compared to 1997.
For the quarter, revenues from Prodigy Internet increased 124% to $24.8 million from $11.0 million in
fourth quarter 1997 and, for the year, increased 174% to $80.7 million versus $29.5 million in 1997. Net
loss for Prodigy Communications for the quarter was ($17.2) million or ($0.38) per share compared to a
loss of ($49.3) million or ($2.14) per share in fourth quarter 1997. For the year, net loss was ($65.1)
million or ($1.60) per share compared to ($132.8) million or ($7.66) per share in 1997.
Results reflect strong growth from new Prodigy Internet subscribers. Earlier this year, the Company
announced it would discontinue Prodigy Classic to focus resources on building its flagship Prodigy
Internet product. Total revenue comparisons to prior year periods reflect that Prodigy Internet growth is
more than offsetting the planned phase out of Prodigy Classic service. For the quarter and the year, total
revenues were $34.7 million and $136.1 million, respectively, compared to $32.3 million and $134.2
million in the prior year periods.
At December 31, 1998, billable subscribers to Prodigy Internet increased 129% to 505,000 from
221,000 a year ago. The increase reflected growth in new subscribers to Prodigy Internet, with only
about 6% of the increase attributable to migration from Prodigy Classic to Prodigy Internet. For the
quarter, Prodigy Internet produced 72% of total revenues compared to 34% in the prior year period. For
the year, Prodigy Internet produced 59% of total revenues compared to 22% in 1997.
Results also reflect the Company's focus over the last 18 months on expanding Prodigy Internet's billable
subscriber base and outsourcing much of the network and content functions to partners that specialize in
each area. As a result, operating loss for the quarter decreased 50% to ($22.3) million, from ($44.2)
million in the prior year quarter and decreased 41% to ($70.5) million, from ($119.6) million in the prior
year. EBITDA (earnings before interest, taxes, depreciation and amortization) losses narrowed by 68%
to ($13.8) million from ($42.5) million in the prior year quarter and 55% to ($49.7) million from ($110.0)
million in 1997.
''We continue to be successful in executing innovative Internet marketing strategies and are seeing these
strong results carry through into the first quarter of 1999,'' said Samer Salameh, Chairman and CEO.
''Our new 'There Is A Choice' advertising campaign has been very successful and we are continuing the
campaign into the second quarter. As a result of these marketing programs, from January to February,
inbound calls to Prodigy increased 100%. In addition, downloads of Prodigy Internet software off of our
Website have increased 50% over the same period.''
''Our success selling the Prodigy solution has enabled us to enter new markets and further leverage our
brand recognition,'' Mr. Salameh continued. ''In January, we announced an agreement with Telmex to
manage the subscriber base of Internet Directo Personal - Telmex's Mexican ISP service. Work on that
program has already begun. We expect that our experience in Mexico will help us to more easily enter
the Hispanic market in the US.''
WHITE PLAINS, N.Y. (CBS.MW) -- Prodigy Communications
chopped its fourth-quarter losses by 65 percent as the Internet service
provider logged a two-fold increase in its online subscribers.
The White Plains, N.Y.-based company said its net
loss for the period narrowed to $17.2 million, or 38
cents a share, vs. $49.3 million, or $2.14, in the
same period a year ago. Analysts' consensus
estimate wasn't available for Prodigy (PRGY),
which went public last month at $15 a share.
Revenue rose to $34.7 million from $32.3 million
the same period a year earlier.
Billable subscribers to Prodigy Internet shot up 129
percent to 505,000 compared with 221,000 last
year. The fourth-quarter number reflects growth in
new subscribers, with only 6 percent of the rise due
to customers shift from Prodigy Classic to Prodigy
Internet. See press release.
"We continue to be successful in executing
innovative Internet marketing strategies and are
seeing these strong results carry through into the
first quarter of 1999," said chief executive Samer
Salameh.
Salameh also said Prodigy's new "There is a Choice" advertising campaign
will continue in the second quarter.
"As a result of these marketing programs, from January to February,
inbound calls to Prodigy increased 100 percent. In addition, downloads of
Prodigy Internet software off of our Web site have increased 50 percent
over the same period," he added.
Prodigy also said it launched its Business Solutions Group in January to
build its subscriber base. In the same month, the company made an
agreement with Telmex's to manage its subscriber base.
Prodigy completed its initial public offering of 11 million shares in
February, the company said. The company originally sold 8 million shares,
with an over allotment of 1.2 million shares, as well as 2 million shares
purchased directly by Telmex, Prodigy added. See press release. See
IPO Report.
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