OneMain.com Reports Record Q1 Results
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National Internet provider OneMain.com Tuesday reported its first-quarter customer acquisitions exceeded analysts estimates, although the company reported a loss of more than $40 million.
The Virginia-based ISP that focuses on serving access to smaller metropolitan markets and rural communities in the U.S. reported first quarter total revenues were $39.8 million, up 21.6 percent from its $32.8 million fourth quarter performance and 104.1 percent revenues for the first quarter of last year. For the first quarter OneMain.com (ONEM) reported a net loss of $40.8 million or $1.63 per share.
OneMain.com average revenue per user rose to $17.52 per month, up almost $1 per subscriber over the fourth quarter. Much of OneMain.com's growth is attributed to adding more than 60,000 new subscribers to its customer base between December 1999 and March 2000 month end reports.
Through March, OneMain.com had accumulated 762,000 subscribers, up 105.4 percent from the same period last year.
The company further reported earnings before interest, taxes and depreciation and amortization (EBITDA) of $5.4 million for the quarter, which is in line with analyst estimates. The reported loss excluded a $7.2 million restructuring charge for severance and facility-related expenses and compares with an EBITDA loss of $3.9 million for the fourth quarter of 1999.
Highlights from OneMain.com's Company's planned integration and operating expense reduction strategies included a near 6 percent decrease in sales and administration expenses as a percentage of total revenues. OneMain continued to make planned investments in its customer acquisitions efforts to integrated service into its infrastructure.
Stephen E. Smith, OneMain.com chairman and chief executive officer, said the company once again delivered on its stated objectives.
"We are very pleased with our quarter's results and remain confident about the outlook for the business going forward," Smith said. "Beyond our strong customer growth, OneMain.com continues to broaden our service offerings to better serve our customers."
Smith further cited OneMain.com's fourth quarter agreements with Covad Communications Co. (COVD) and Toronto-based Research In Motion Ltd. (RIMM) as integral parts to its future service expansion into digital subscriber line broadband and wireless Internet access.
Marian O'Leary, OneMain.com chief financial officer, said its customer integration of acquired ISP services is also expected to increase operating profit margins by 15 to 20 percent by the end of the year.
"The success of our integration efforts, cost reduction measures and strong organic growth are fueling our solid financial performance and enabling us to once again exceed analyst estimates for revenue, subscribers, EBITDA and EPS," O'Leary said.
As part of its integration initiative, OneMain launched its unique local portals in each of its four principal California markets this week. OneMain.com also has launched its first national ad campaign in the markets it has integrated to introduce the company's brand and broaden its market position.
The ad campaign is intended to drive organic growth and create brand awareness and demarcates its official shift away from OneMain.com's initial plan to grow by acquisition. Although the ISP start-up was originally pooh-poohed by the industry, OneMain.com remains standing as one of the largest independent Internet service providers in the U.S.
OneMain.com targets consumers and businesses located in smal