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Value America holds despite earnings below expectation

Value America, Inc. (Nasdaq: VUSA) said Monday its accelerated investments in technology and systems were to blame for a net loss of $31.8 million, or 75 cents a share, far below First Call's estimated loss of 63 cents a share.

Micros-to-Mainframes and International FiberCom also reported earnings Monday.

Shares in Value America, an Internet superstore selling technology, office and consumer products were up 1/4 to 14 7/8, well below their 52-week high of 74 1/4.

Revenue for the second quarter ended June 30, 1999 reached $35.8 million, a 600 percent increase over revenue of $5.1 million in the same period a year ago. Net loss was $9.8 million for the second quarter last year. Net loss for the previous quarter was $34.5 million, or $1.45 a share.

Second quarter revenue was also a 28 percent increase over the first quarter ended March 31, 1999. Customer base, which grew 50 percent in the quarter to over 400,000 members was the primary source of growth, said Value America in a press release. The company also said their automated and electronic transactional solution was improved and sales and marketing expenses continued to decrease as a percentage of sales.

The Charlottesville, Virginia-based company also reported a gross margin of 4%, and a gross profit of $1.3 million, an 195 percent increase over the second quarter 1998 gross profit. Value America also said it increased relationships with brand manufacturers by since last quarter, and reported non-technology consumer sales were up more than 400 percent from the previous quarter.

The company's investments include enhancing its core data base and engine to a Unix and RISC Enterprise alternative that also features EMC storage arrays, Oracle data bases and a Cisco-based ATM network.

Two out of 5 analysts covering the stock rate it a "moderate buy" according to Zacks Investment research. Value America missed estimates by a penny last quarter.

  • International FiberCom Inc. (Nasdaq: IFCI) also posted second-quarter earnings Monday, at $2.3 million, or 8 cents a share, on target with First Call's estimate.

    Shares in the company rose 1/4 to 8 1/8 Monday morning. International FiberCom provides engineering, development and maintenance services for fiber-optic, broadband networks, public telephone networks, local and wide area networks and specializes in wireless applications

    Net income compares with $2.0 million, or 8 cents a share on last year's revenue of $24.4 million. Revenue for this year's second quarter rose 67 percent to $40.7 million.

    Though International FiberCom did "experience some continued softness in Equipment Resale,'' said Chairman and Chief Executive Officer Joseph P. Kealy in a company release, its Engineering and Infrastructure Development divisions showed strong quarterly growth.

    Achievements for the quarter include service contracts for the upgrade of cable systems operated by AT&T Broadband and Internet Services. The acquisition of All Star Telecom, an infrastructure development company, and BlueRidge Solutions, a consulting and software development firm, were also announced. International FiberCom hopes to be a ``one-stop shop'' for the telecom, information and cable TV industries.

  • Micros-To-Mainframes, Inc. (Nasdaq: MTMC) announced first-quarter earnings of $73,000 or 2 cents a share, as compared to $207,000 or 5 cents a share in the prior fiscal year. There was no consensus estimate, according to First Call.

    Shares were even at 3 3/16 Monday morning. MTM, based in New York City, provides design and consulting services, communications services and products, Internet/Intranet development services, and network management services. Shares first surged after the little-known company launched e-commerce sites in February.

    Net sales in the first quarter of fiscal 2000 was approximately $18.3 million as compared to approximately $17.0 million in the first quarter of fiscal 1999. This increase of approximately 8 percent was attributed to an increase of $1.3 million in both hardware sales and consulting services. Revenue from services increased by approximately $270,000 or 5 percent.

    The company said an acquisition of Pivot Technologies will improve service revenue in Internet/Intranet development, Internet security, Network Systems Management, diagnostics, and consulting services for fiscal 2000. The company said it also believes it is not valued in the proper sector, and hopes to be recognized as a consulting and services company, not a value added reseller of computer hardware.