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Technology Stocks : (JWEB)----IPO

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To: Burgoo who wrote (215)7/28/1999 10:33:00 PM
From: rdmsqito   of 510
Juno Online Services, Inc. Reports Record Second Quarter Financial Results
PR Newswire - July 28, 1999 16:16

160% year-over-year increase in total Q2 revenues
Billable services subscribers up 30% sequentially in quarter to 270,000
7.2 million total subscriber accounts at quarter end

NEW YORK, July 28 /PRNewswire/ -- Juno Online Services, Inc. (Nasdaq: JWEB), a leading national provider of Internet-related services, reported record revenues of $11.1 million for the second quarter ended June 30, 1999, a 160% increase over revenues of $4.3 million reported in the same period in 1998.

Billable service subscribers grew to 270,000, up 30% sequentially from 207,000 at March 31, 1999. Juno had approximately 7.2 million total subscriber accounts as of June 30, 1999.

Charles Ardai, Juno's president and chief executive officer commented, "We are very pleased with the strides we have taken to grow our billable subscriber base and to enhance our members' experience of using the Internet. Our new software, Juno(R) 3.0, makes it simpler than ever for someone to take his or her first step onto the Internet with Juno, and our upgraded portal site at offers the feature-rich community experience, extensive content, and personalized customer support that we believe generate user loyalty."

Billable service revenues led the revenue climb with an increase to $7.1 million in the second quarter, up 22% from $5.8 million in the first quarter of 1999. Growth in Juno's number of billable subscribers continued to come principally from internal conversions, as users of Juno's free basic service "graduated" to using its billable services, Juno Web(SM) and Juno Gold(SM). Subscribers to Juno Web, Juno's full Internet access service, accounted for 59.3% of billable service subscribers.

Juno's first significant external advertising campaign, including television and radio commercials as well as targeted direct mail, began rolling out in June, following the successful completion of Juno's initial public offering on May 25. Including proceeds from its IPO, Juno had cash and cash equivalents of $111 million as of June 30, 1999. Juno invested a total of $13.9 million in subscriber acquisition and related brand-building activities during the quarter -- the majority in June -- with most of the impact from the investment expected to be realized in subsequent quarters.

Led by contributions from strategic marketing alliances, advertising and transaction fee revenues increased to $2.7 million in the second quarter, up 19% from $2.3 million in the first quarter, and 76% above the $1.5 million recorded in the comparable quarter a year ago. Reflecting a downward trend in average retail prices for computer hardware and management's strategic decision to de-emphasize direct merchandising in favor of higher-margin e-commerce activities (which are recorded on the advertising and transaction fees revenue line), direct product sales revenues declined to $1.4 million from $1.6 million in the first quarter.

Cost of revenues improved as a percentage of total revenues to 70.2% in the second quarter, down from 73.9% in the first quarter, reflecting higher margins in both billable services and advertising and transaction fees. Billable services costs improved in relation to revenues as both customer service calls per subscriber and average telecommunications rates continued to decline. The cost of advertising and transaction fees in the second quarter declined as a percentage of related revenues as compared with the first quarter of 1999 largely due to economies of scale associated with larger average deal sizes and from rising average rates per impression delivered.

On a pro forma per-share basis, Juno reported an operating loss before subscriber acquisition costs of ($0.14), and an overall net loss of ($0.56), for the quarter. "The continued improvement in our operating margin before subscriber acquisition costs allowed us to deploy additional capital for our subscriber acquisition and brand-building activities," said Rick Eaton, Juno's chief financial officer. "We view these activities as investments in future growth."

About Juno Online Services, Inc.

Juno Online Services, Inc. is a provider of Internet-related services to millions of computer users throughout the United States. The company offers several levels of service, ranging from basic dial-up Internet e-mail -- which is provided to the end user for free -- to full, competitively priced access to the World Wide Web. Since the launch of Juno's basic e-mail service in April 1996, more than 7 million total Juno accounts have been created. Juno's revenues are derived primarily from the subscription fees charged for certain billable services, from the sale of advertising, and from the direct sale of products to Juno subscribers.

This press release may be deemed to contain forward-looking information. Any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation any statements as to future events or future financial results of Juno, may be significantly and materially impacted by risks and uncertainties. In evaluating such statements, readers should specifically consider various factors that could cause actual events or results to differ materially from those indicated, including without limitation factors described in Juno's reports and documents filed from time to time with the Securities and Exchange Commission.

Pro forma loss per share from operations before subscriber acquisition costs is not a measurement of financial performance under generally accepted accounting principles and should not be considered an alternative to pro forma net loss per share.

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