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Prodigy Communications Corporation
44 South Broadway, White Plains, NY 10601 * (914) 448-8000
Business Description The company is a leading nationwide Internet service provider that provides fast and reliable Internet access and related value-added services.
Offering
Information

Company has
gone public

Trading As  PRGY (NASNTL) Industry  Internet (SIC 7375)
Type of Stock Offered  Common Shares Filing Date  09/25/1998
Domestic Shares Offered  8,000,000 Offer Date  02/10/1999
Foreign Shares Offered  0 Filing Range  $12.00 - $15.00
Company Shares  8,000,000 Offer Price  $15.00
Selling Shrhldrs Shares  0 Gross Spread  $1.013
Gross Proceeds  $120,000,000 Selling  $0.610
Expenses  - - Reallowance  $0.100
Post-IPO Shares  - - Employees  304
Primary
Underwriting
Group
Underwriter NameParticipationUnderwriter Phone
Bear, Stearns & Co. Inc. Lead Manager (212) 272-4850
BancBoston Robertson Stephens Co-manager (415) 989-8500
Volpe Brown Whelan & Company Co-manager (415) 274-4463
Wit Capital Corporation Co-manager (212) 253-4400
Income
Statement
and
Cash Flow
Summary
  Prior
Audited
Income
Latest
Unaudited
Income
  Full Year Audited Figures 6 Months Ending
Figures in U.S. millions except per share data     12/31/1995 12/31/1996 12/31/1997 06/30/1997 06/30/1998
Revenues   - - 0.000 98.900 134.200 69.500 67.300
Income from Oper.   - - - - - - -
Net Income   - - -3.100 -114.100 -129.200 -52.800 -31.900
E.P.S   - - -0.090 -2.750 -1.860 -1.070 -0.230
Revenue Growth (%)      - - - 35.693   -3.17
Net Income Growth (%)      - - - -   -
Oper. Profit Margin (%)    - - - - - - -
Net Profit Margin (%)    - - - - - - -
Cash Flow - Oper.     -114.04 -56.42 -34.84
Cash Flow - Inv.     -15.25 -8.49 -0.01
Cash Flow - Fin.     120.38 56.01 32.09
Balance Sheet
Summary
and
Financial
Ratios
Balance sheet as of: 06/30/1998 Financial Ratios
Total Assets    123.40 Current Assets    12.34 Current Ratio    0.22
Total Liab.    81.70 Current Liab.    55.31 Debt Ratio    66.21%
Total Equity    41.70 Working Cap.    -42.97 Debt to Equity Ratio    1.96
Cash    9.61    Return on Assets   -
Use Of
Proceeds
The proceeds from the proposed offering will be used to expand Prodigy's consumer business, introduce new business services, enter new markets and for general corporate purposes.
Legal Counsel
Registrar
Auditor
Issuer's Law Firm  Hale and Dorr
Bank's Law Firm  O'Sullivan Graev & Karaball, L.LP
Registrar/Transfer Agent  American Stock Transfer & Trust Co
Auditor  Pricewaterhouse Coopers LLC
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Industry
Competition
The industry in which the Company competes is intensely competitive and includes a number of significant participants, including ISPs, proprietary online service providers and major international telecommunications companies, as well as Internet-search services and various other telecommunications companies. Moreover, the Company faces competition from companies that provide broadband connections to households, including local and long-distance telephone companies, cable television companies and electric utility companies. Broadband technologies offer significantly faster Internet access than conventional modems, and such companies could include Internet access in their basic service packages, could offer access for a nominal additional charge or could prevent the Company from delivering Internet access through the cable or wire connections that such companies own. The Telecommunications Act of 1996 (the "Telecommunications Act") contains certain provisions that remove, or establish procedures for removing, restrictions on the regional Bell operating companies Internet access business. The Telecommunications Act also makes it easier for national long-distance carriers, such as AT&T;, to offer local telephone service, which would permit such carriers to offer direct local Internet access. Competition from these companies could have a material adverse effect on the Company. The Company cannot predict the extent to which the Telecommunications Act, or strategic alliances or consolidation among ISPs, may result in additional competitive pressures on the Company. Among the larger providers of ISP services are EarthLink Network, Inc. (which has a strategic relationship with Sprint Corporation), MindSpring Enterprises, Inc., Microsoft Network, AT&T; WorldNet, MCI Internet, IBM Internet Connection, PSINet Inc., GTE Internetworking (which includes the former ISP business of BBN Corporation), Netcom On-Line Communications Services, Inc. (owned by ICG Communications, Inc.) and Concentric Network Corporation.

Last updated: 09/29/1999 3:52:14 AM
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