Income Statement
Year ended June 30 ($000) 1995 1994 1993
Revenues:
Online service revenues $358,498 $100,993 $38,462
Other revenues 35,792 14,729 13,522
Total revenues 394,290 115,722 51,984
Costs and expenses:
Cost of revenues 229,724 69,043 28,820
Marketing 77,064 23,548 9,745
Product development 12,842 4,961 2,913
General and administrative 41,966 13,562 8,581
Acquired research and development 50,335
Amortization of goodwill 1,653
Total costs and expenses 413,584 111,114 50,059
Income (loss) from operations (19,294) 4,608 1,925
Other income, net 3,023 1,774 371
Merger expenses 2,207
Income (loss) before provision for income taxes and
extraordinary item (18,478) 6,382 2,296
Provision for income taxes (15,169) (3,832) (1,897)
Income (loss) before extraordinary item (33,647) 2,550 399
Extraordinary item - tax benefit arising from net
operating loss carryforward 1,133
Net income (loss) ($33,647) $2,550 $1,532
Earnings (loss) per share:
Income (loss) before extraordinary item ($0.99) $0.07 $0.01
Net income (loss) ($0.99) $0.07 $0.05
Weighted average shares outstanding 33,986 34,208 29,286
Balance Sheet
Year ended June 30 ($000) 1995 1994
Assets
Current assets:
Cash and cash equivalents $45,378 $43,891
Short-term investments 18,672 24,052
Trade accounts receivable 32,176 8,547
Other receivables 11,103 2,036
Prepaid expenses and other current assets 25,527 5,753
Total current assets 132,856 84,279
Property and equipment at cost, net 70,466 20,306
Other assets:
Product development costs, net 18,914 7,912
Deferred subscriber acquisition costs, net 77,229 26,392
License rights, net 5,537 53
Other assets 11,479 2,800
Deferred income taxes 35,627 12,842
Goodwill, net 54,356
$406,464 $154,584
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $84,639 $15,642
Accrued personnel costs 2,829 896
Other accrued expenses and liabilities 23,509 13,076
Deferred revenue 20,021 4,488
Line of credit 484 1,690
Current portion of long-term debt and capital lease obligations 1,830 597
Total current liabilities 133,312 36,389
Long-term liabilities:
Notes payable 17,369 5,836
Capital lease obligations 2,127 1,179
Deferred income taxes 35,627 12,842
Deferred rent 85 41
Total liabilities 188,520 56,287
Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized,
none issued
Common stock, $.01 par value; 100,000,000 shares authorized, 375 308
37,554,849 and 30,771,212 shares issued and outstanding
at June 30, 1995 and 1994, respectively
Additional paid-in capital 251,539 98,836
Accumulated deficit (33,970) (847)
Total stockholders' equity 217,944 98,297
$406,464 $154,584
1993
$9,224
5,105
1,516
1,345
1,723
18,913
2,402
3,915
6,890
35
247
$32,402
$3,766
529
2,931
1,298
93
8,617
8,617
59
22,652
1,074
23,785
$32,402
Cash Flow Statement
Year ended June 30 ($000) 1995 1994
Cash flows from operating activities:
Net income (loss) ($33,647) $2,550
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 11,136 2,965
Amortization of subscriber acquisition costs 60,924 17,922
Loss/(Gain) on sale of property and equipment 37 5
Charge for acquired research and development 50,335
Changes in assets and liabilities:
Trade accounts receivable (14,373) (4,266)
Other receivables (9,057) (681)
Prepaid expenses and other current assets (19,641) (2,867)
Deferred subscriber acquisition costs (111,761) (37,424)
Other assets (8,432) (2,519)
Trade accounts payable 60,824 10,204
Accrued personnel costs 1,846 367
Other accrued expenses and liabilities 5,703 9,526
Deferred revenue 7,190 2,322
Deferred income taxes 14,763 3,832
Deferred rent 44 (52)
Total adjustments 49,538 (666)
Net cash provided by operating activities 15,891 1,884
Cash flows from investing activities:
Short-term investments 5,380 (18,947)
Purchase of property and equipment (57,751) (17,886)
Product development costs (13,011) (5,132)
Sale of property and equipment 180 95
Purchase costs of acquired businesses (20,523)
Net cash used in investing activities (85,725) (41,870)
Cash flows from financing activities:
Proceeds from issuance of common stock, net 61,253 67,372
Principal and accrued interest payments on line of credit and
long-term debt (3,298) (3,298)
Proceeds from line of credit and issuance of long-term debt 13,741 14,200
Tax benefit from stock option exercises
Principal payments under capital lease obligations (375) (142)
Net cash provided by financing activities 71,321 73,714
Net increase (decrease) in cash and cash equivalents 1,487 33,728
Cash and cash equivalents at beginning of period 43,891 10,163
Cash and cash equivalents at end of period $45,378 $43,891
Supplemental cash flow information
Cash paid during the period for:
Interest 1,067 575
Income taxes
1993
$1,532
1,957
7,038
(39)
(936)
(966)
(1,494)
(10,685)
(89)
2,119
336
1,492
1,381
759
(200)
673
2,205
(5,105)
(2,041)
(1,831)
62
(8,915)
609
(6,924)
7,181
6
(112)
760
(5,950)
16,113
$10,163
193
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