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
ler
metropolitan markets and rural communities. The firm contends that the
traditionally under-served markets represent a great opportunity to fulfill
the growing demand for wired and wireless, narrowband and broadband
Internet services.
