SAN FRANCISCO, July 29 /PRNewswire/ -- The following is being issued by
BancBoston Robertson Stephens, a member of the National Association of
Securities Dealers, CRD number 41271:
BancBoston Robertson Stephens senior eCommerce analyst Rick Juarez today
commented on FlashNet Communications, Inc. (Nasdaq: FLAS), while providing an
update on the ISP services industry. FlashNet provides nationwide
Internet-access services.
"FlashNet announced second-quarter 1999 earnings that highlight the
transformation within the ISP market," said Juarez. "The company reported
mixed results with revenues of $9.5 million, in-line with our projections, and
an earnings-per-share of ($0.45), $0.20 below our ($0.25) expectation.
"In our view, the earnings-per-share disappointment was largely driven by
the changes in the ISP market as evidenced by:
1. new market entrants and competition,
2. irrational business models, e.g. free ISP service and
3. increased customer acquisition costs, e.g. free personal computers,"
said Juarez.
"We believe these factors will lead to increased-pricing pressures and
greater-overall costs," said Juarez. "Although these models will cause
disruption in the near-term, we believe subscription based ISP models such as
FlashNet will be favored. Access to capital and strategic alliances may
become the deciding factors in determining the ultimate winners and losers.
"FlashNet has moved to counter these challenges by rapidly implementing
its own free PC and PC rebate offers, while ramping up its network marketing
programs," said Juarez. "Our analysis indicates that these new offerings will
help the company remain competitive and assist it in raising its
overall-average revenue-per-unit from $14 to $16-18.
"We are maintaining our revenue estimates, but revising our 1999 and
2000 earnings-per-share estimates for FlashNet from ($1.27) to ($1.59) and
from ($0.50) to ($0.77), respectively, reflecting increased customer
acquisition cost and competition," said Juarez. "We believe the stock will
likely factor in second-quarter results and as such, maintain our Buy rating
based on valuation."
Clients interested in receiving more information, such as the
Virtual Bricks(TM) report dated 4/21/99, should contact their salesperson at
415-781-9700.
BancBoston Robertson Stephens, the section 20 subsidiary of BankBoston
(NYSE: BKB), is a leading international investment bank focused on growth
companies in the technology, life sciences and healthcare, information and
business services, retail and consumer products, real estate, media,
telecommunications, broadcasting, and gaming and lodging sectors. The firm's
45 equity research analysts cover more than 600 companies. Since its founding
in 1978, BancBoston Robertson Stephens has raised over $52 billion in initial
public offerings, follow-ons and convertible offerings. The firm has also
assisted in over 400 mergers and acquisitions transactions valued at more than
$77 billion. BancBoston Robertson Stephens began its high yield securities
business in February 1997 and since that time has completed 69 transactions,
including 15 lead transactions, raising more than $12.6 billion. BancBoston
Robertson Stephens has offices in San Francisco, New York, Menlo Park, Boston,
Chicago, London and Tel Aviv.
The following synopsis is qualified in its entirety by the more detailed
information contained in the full research report, including the discussion of
certain risks associated with an investment in this security contained in
"Investment Risks."
The information contained herein is not a complete analysis of every
material fact respecting any company, industry or security. Although opinions
and estimates expressed herein reflect the current judgment of BancBoston
Robertson Stephens, the information upon which such opinions and estimates are
based is not necessarily updated on a regular basis; when it is, the date of
the change in estimate will be noted. In addition, opinions and estimates are
subject to change without notice. This Report contains forward-looking
statements, which involve risks and uncertainties. Actual results may differ
significantly from the results described in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in "Investment Risks." BancBoston Robertson Stephens from
time to time performs corporate finance or other services for some companies
described herein and may occasionally possess material, nonpublic information
regarding such companies. This information is not used in the preparation of
the opinions and estimates herein. While the information contained in this
Report and the opinions contained herein are based on sources believed to be
reliable, BancBoston Robertson Stephens has not independently verified the
facts, assumptions and estimates contained in this Report. Accordingly, no
representation or warranty, expressed or implied, is made as to, and no
reliance should be placed on, the fairness, accuracy, completeness or
correctness of the information and opinions contained in this Report.
BancBoston Robertson Stephens, its managing directors, its affiliates, and/or
its employees may have an interest in the securities of the issue(s) described
and may make purchases or sales while this report is in circulation.
BancBoston Robertson Stephens International Ltd. is regulated by the
Securities and Futures Authority in the United Kingdom. This publication is
not meant for private customers. The securities discussed herein are not FDIC
insured, are not deposits or other obligations or guarantees of BankBoston
N.A., and are subject to investment risk, including possible loss of any
principal amount invested.
SOURCE BancBoston Robertson Stephens
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