SOURCE: Internet America, Inc.

Internet America, Inc.

February 10, 2011 16:54 ET

Internet America Reports Adjusted EBITDA Profit for the Quarter Ended December 31, 2010 -- Increases From the Same Period Last Year

HOUSTON, TX--(Marketwire - February 10, 2011) - Internet America, Inc. (OTCBB: GEEK) today announced results for its fiscal second quarter ended December 31, 2010. Adjusted EBITDA earnings, as defined below, for the quarter ended December 31, 2010 increased by $295,000 to $330,000 as compared to $35,000 for the prior year period. The Company's net U.S. GAAP income for the quarter ended December 31, 2010 was $61,000, or $0.00 per share, as compared to a net loss under U.S. GAAP of ($265,000), or ($0.02) per share, for the prior year period.

Wireless broadband Internet revenue for the quarter ended December 31, 2010 increased by $16,000 to $1,181,000 as compared to $1,165,000 for the prior year period. Billy Ladin, CEO, commented, "We are pleased with the results of the December quarter, which was our fifth sequential quarter of profitable adjusted EBITDA earnings and five quarters of improving U.S. GAAP earnings with the last two quarters producing positive U.S. GAAP net income."

About Internet America

Internet America is a leading Internet service provider serving the Texas market. Based in Houston, Internet America offers businesses and individuals a wide array of Internet services including broadband Internet delivered wirelessly and over DSL, dedicated high-speed access, web hosting, and dial-up Internet access. Internet America provides customers a wide range of related value-added services, including Fax-2-Email, online backup and storage solutions, parental control software, and global roaming solutions. Internet America focuses on the speed and quality of its Internet services and its commitment to providing excellent customer care. Additional information on Internet America is available on the Company's web site at http://www.internetamerica.com.

Use of Non-GAAP Financial Measures

In this press release, the Company refers to a non-GAAP financial measure called adjusted EBITDA because of management's belief that this measure is a financial indicator of the Company's ability to internally generate operating cash flow. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and loss on the transfer of assets. Management also believes that this non-GAAP financial measure is useful information to investors because it is widely used by professional research analysts in the valuation and investment recommendations of companies in the Company's peer group. Adjusted EBITDA should not be considered an alternative to net income, as defined by U.S. GAAP.

Forward Looking Statements

This press release may contain forward-looking statements relating to future business expectations. These statements, specifically including management's beliefs, expectations and goals, are subject to many uncertainties that exist in Internet America's operations and business environment. Business plans may change, and actual results may differ materially as a result of a number of risk factors. These risks include, without limitation, that (1) we will not be able to increase our rural customer base at the expected rate, (2) we will not improve EBITDA, profitability or product margins, (3) Internet revenue in high-speed broadband will continue to increase at a slower pace than the decrease in other Internet services resulting in greater operating losses in future periods, (4) financing will not be available to us if and as needed, (5) we will not be competitive with existing or new competitors, (6) we will not keep up with industry pricing or technological developments impacting the Internet, (7) we will be adversely affected by dependence on network infrastructure, telecommunications providers and other vendors or by regulatory changes, (8) service interruptions or impediments could harm our business, (9) we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future, (10) government regulations could force us to change our business practices, (11) we may be unable to hire and retain qualified personnel, including our key executive officers, (12) future acquisitions of wireless broadband Internet customers and infrastructure may not be available on attractive terms and if available we may not successfully integrate those acquisitions into our operations, (13) provisions in our certificate of incorporation, bylaws and shareholder rights plan could limit our share price and delay a change of management and (14) our stock price has been volatile historically and may continue to be volatile. This list is intended to identify certain of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere herein. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business and should be read in conjunction with the more detailed risk factors included in our other publicly filed reports.


                       Internet America, Inc.
                   Unaudited Financial Summary
       (in thousands, except per share and subscriber count data)

Statement of Operations Data:
                                                     Quarters Ended
                                                12/31/2010      12/31/2009
                                            --------------  --------------

Wireless Broadband Internet Subscribers              8,000           8,200

Total Subscribers                                   25,100          26,400
Revenue:
     Internet Services                      $        1,722  $        1,793
     Other                                               -              43
                                            --------------  --------------
          Total Revenue                              1,722           1,836

Operating Costs & Expenses:
     Connectivity & Operations                       1,050           1,223
     Sales & Marketing                                  45              69
     General & Administrative                          299             528
     Recoveries of Bad Debt                              1               1
     Depreciation & Amortization                       254             257
                                            --------------  --------------
          Operating Income (Loss)                       73            (242)


     Interest Expense, Net                             (12)            (23)
     Noncontrolling Interest in Loss of
      Consolidated Subsidiary                            -               -
                                            --------------  --------------
          Net Income (Loss)                 $           61  $         (265)
                                            ==============  ==============

Basic & Diluted Net Income (Loss) Per Share $         0.00  $        (0.02)
                                            ==============  ==============
Weighted Average Basic Shares                       16,718          16,559
                                            ==============  ==============
Weighted Average Diluted Shares                     19,448          16,559
                                            ==============  ==============

          Adjusted EBITDA                   $          330  $           35

Reconciliation of Net Income (Loss) (a GAAP
 Measure) to Adjusted EBITDA (a Non-GAAP
 Measure)
                                                    Quarters Ended
                                                12/31/2010      12/31/2009
                                            --------------  --------------

Net Income (Loss)                           $           61  $         (265)
Add:
Depreciation & Amortization                            254             257
Stock Compensation                                       3              20
Interest Expense, net                                   12              23
                                            --------------  --------------
     Adjusted EBITDA                        $          330  $           35
                                            ==============  ==============

Balance Sheet Data:
                                                    Periods Ended
                                                12/31/2010      12/31/2009
                                            --------------  --------------

Current Assets                              $        2,093  $        2,324
Property & Equipment, Net                            1,600           1,968
Other Assets, Net                                    2,605           2,955
                                            --------------  --------------
     Total Assets                           $        6,298  $        7,247
                                            ==============  ==============
Current Liabilities                         $        1,725  $        2,346
Long-Term Liabilities                                  677             916
Total Shareholders' Equity                           3,896           3,985
                                            --------------  --------------
     Total Liabilities & Shareholders'
      Equity                                $        6,298  $        7,247
                                            ==============  ==============


Contact Information

  • CONTACT
    Internet America, Inc.
    713.968.2500
    William E. Ladin, Jr.
    Email Contact