Mindspring Enterprises Inc is now showing that it is possible to make profit margins as an internet service provider, having completed its first full year of profitability. And it is about to get a whole lot bigger, once its acquisition of the customer base of Netcom is complete, which is expected to happen next month. Net income in the fourth quarter was boosted by a tax credit, but even without that the company recorded income in line with Wall Street expectations as surveyed by First Call. Mindspring had 693,000 customers at the end of the quarter, up from 455,000 three months earlier and 278,000 at the end of last year. By buying Netcom from ICG Communications, the company hopes to add some 420,000 dial-up, dedicated and hosting customers, which will take it past its rival Earthlink, for now at least. Included in the current Mindspring numbers are 21,000 web hosting customers. Fourth quarter net income was up to $3.7m, or 13 cents a share, from $498,000 last time, on revenues that rose 130% to $39.5m. However, that included a $1.8m tax credit and without that the company turned in seven cents a share. The tax benefit comes from the removal of the company’s deferred tax assets valuation allowance and this year the company will report on a fully-taxed basis. During the quarter the company closed its acquisition of Sprynet customers’ from America Online Inc and it completed a secondary offering of 2.3 million shares. For the year, net income was $10.5m, against losses of $4.1m last time, on revenues up 118.2%. Net earnings per share rose to 13 cents per share in the quarter, from two cents last time. Cash and equivalents stood at $167.7m at the year end.
