NetSol Technologies Reports Fiscal 2012 First-Quarter Financial Results
| Copyright: | 2011 GlobeNewswire, Inc. |
| Source: | GlobeNewswire |
| Wordcount: | 2210 |
Total revenue was
License revenue totaled
"Macroeconomic uncertainty continued to delay contracts, which affected licensing revenues in the first quarter," said
Operating expenses for the fiscal 2012 first quarter were
Operating loss for the first quarter of fiscal 2012 was
Net loss for the first quarter of fiscal 2012 was
At
Following is a breakdown of recent growth initiatives:
- Established an e-commerce division,
Vroozi Inc. , which provides a dedicated sales and delivery channel forNetSol's smartOCI product line. Signed several new customers, including a Fortune 500 aerospace defense contractor and one of the leading chipmakers to implement the software;
- Began dedicated marketing of LeasePak-SaaS, a cloud-delivered leasing and finance solution, which operates under a recurring revenue model;
- Augmented
Bangkok andChina staff with 10 additional employees to support recent contract wins and to advance the company's regional realignment efforts;
- Successfully implemented NFS for a large European auto finance captive in
India from theBangkok office;
- Completed the formation of
NetSol's wholly owned foreign subsidiary inChina to develop regional business;
- Expanded services in
Australia with the introduction of NetSol Innovation services;
- Acquired
United Kingdom -basedVirtual Lease Services, Ltd. , together withInvestec Asset Finance Plc ., broadeningNetSol's suite of services to include the asset finance and leasing business process outsourcing industry;
- Expanded marketing of smartOCI throughout
Europe with a visible and robust pipeline;
- Began initial marketing efforts for the company's NFS solution in
Brazil together with joint venture partnerBrazilinvest Group .
Share Repurchase Program
"The decision to implement a stock repurchase plan reflects our continued confidence in
Under the stock repurchase program, the company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions and block trades in accordance with federal securities laws, including Rule 10b-18 promulgated under the Securities Exchange Act of 1934 as amended.
The number of shares repurchased by the company will depend entirely upon the levels of cash available, the attractiveness of alternate investment and business opportunities either at hand or on the horizon, and Management's perception of value relative to market price, as well as other legal and regulatory requirements. The repurchase program does not obligate
Financial Outlook
Conference Call and Webcast Information
Additionally, a telephone playback of the conference call will also be available until
About
The
Investors can receive news releases and invitations to special events by accessing our online signup form at http://bit.ly/NetSol_Investor_Signup_Form.
Forward-Looking Statements
This press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "expects," "anticipates," variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.
(Tables Follow)
| |
||
| Condensed Consolidated Balance Sheets | ||
| As of September 30, | As of June 30, | |
| ASSETS | 2011 | 2011 |
| Current assets: | ||
| Cash and cash equivalents | $ 3,123,686 | $ 4,172,802 |
| Restricted Cash | 2,700,000 | 5,700,000 |
| Accounts receivable, net | 13,864,226 | 15,062,503 |
| Revenues in excess of billings | 7,038,291 | 7,601,230 |
| Other current assets | 2,081,864 | 2,053,904 |
| Total current assets | 28,808,066 | 34,590,439 |
| Property and equipment, net | 16,469,748 | 16,014,461 |
| Intangibles: | ||
| Product licenses, renewals, enhancements, copyrights, trademarks, and tradenames, net | 26,364,728 | 25,437,479 |
| Customer lists, net | 147,067 | 164,715 |
| Goodwill | 9,439,285 | 9,439,285 |
| Total intangibles | 35,951,080 | 35,041,480 |
| Total assets | $ 81,228,895 | $ 85,646,380 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 4,069,230 | $ 4,730,027 |
| Current portion of loans and obligations under capitalized leases | 4,092,747 | 7,062,535 |
| Other payables - acquisitions | 103,226 | 103,226 |
| Unearned revenues | 2,475,387 | 2,653,460 |
| Convertible notes payable , current portion | -- | 2,745,524 |
| Loans payable, bank | 2,269,632 | 2,319,378 |
| Common stock to be issued | 206,625 | 400,700 |
| Total current liabilities | 13,216,848 | 20,014,850 |
| Obligations under capitalized leases, less current maturities | 257,711 | 285,472 |
| Convertible notes payable less current maturities | 3,587,464 | -- |
| Long term loans; less current maturities | 425,556 | 434,884 |
| Total liabilities | 17,487,579 | 20,735,206 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Common stock, |
56,077 | 55,532 |
| Additional paid-in-capital | 98,844,487 | 97,886,492 |
| Treasury stock | (396,008) | (396,008) |
| Accumulated deficit | (35,589,651) | (34,130,944) |
| Stock subscription receivable | (2,031,210) | (2,198,460) |
| Other comprehensive loss | (9,362,762) | (8,805,922) |
| Total |
51,520,932 | 52,410,690 |
| Non-controlling interest | 12,220,383 | 12,500,484 |
| Total stockholders' equity | 63,741,315 | 64,911,174 |
| Total liabilities and stockholders' equity | $ 81,228,895 | $ 85,646,380 |
| |
||
| Condensed Consolidated Statement of Operations | ||
| For the Three Months | ||
| Ended September 30, | ||
| 2011 | 2010 | |
| Net Revenues: | ||
| License fees | $ 1,075,850 | $ 3,477,793 |
| Maintenance fees | 2,037,206 | 1,669,919 |
| Services | 3,115,651 | 3,255,360 |
| Total revenues | 6,228,708 | 8,403,071 |
| Cost of revenues: | ||
| Salaries and consultants | 2,383,411 | 1,986,888 |
| Travel | 285,673 | 231,612 |
| Repairs and maintenance | 74,194 | 57,058 |
| Insurance | 35,868 | 30,992 |
| Depreciation and amortization | 789,105 | 630,941 |
| Other | 516,409 | 243,138 |
| Total cost of revenues | 4,084,660 | 3,180,629 |
| Gross profit | 2,144,048 | 5,222,442 |
| Operating expenses: | ||
| Selling and marketing | 700,281 | 483,970 |
| Depreciation and amortization | 191,674 | 266,443 |
| Bad debt expense | 192,250 | 254,632 |
| Salaries and wages | 806,564 | 920,264 |
| Professional services, including non-cash compensation | 186,749 | 139,085 |
| General and administrative | 892,972 | 1,132,519 |
| Total operating expenses | 2,970,490 | 3,196,913 |
| Income (loss) from operations | (826,442) | 2,025,530 |
| Other income and (expenses) | (1,641) | (14,794) |
| Interest expense | (260,207) | (315,644) |
| Interest income | 32,805 | 84,461 |
| Gain (loss) on foreign currency exchange transactions | (120,906) | 1,073,894 |
| Share of net loss from equity investment | (100,000) | (70,438) |
| Beneficial conversion feature | (12,806) | (177,411) |
| Other expense | (7,718) | (55,554) |
| Total other income (expenses) | (470,474) | 524,515 |
| Net income (loss) before income taxes | (1,296,916) | 2,550,045 |
| Income taxes | (24,534) | (8,556) |
| Net income (loss) after tax | (1,321,450) | 2,541,489 |
| Non-controlling interest | (137,258) | (974,508) |
| Net income (loss) attributable to |
(1,458,707) | 1,566,980 |
| Other comprehensive loss: | ||
| Translation adjustment | (974,199) | (475,902) |
| Comprehensive income (loss) | (2,432,907) | 1,091,078 |
| Comprehensive loss attributable to non controlling interest | (417,360) | (206,888) |
| Comprehensive income (loss) attributable to |
$ (2,015,547) | $ 1,297,966 |
| Net income (loss) per share: | ||
| Basic | $ (0.03) | $ 0.04 |
| Diluted | $ (0.03) | $ 0.04 |
| Weighted average number of shares outstanding | ||
| Basic | 55,883,268 | 39,544,096 |
| Diluted | 55,883,268 | 43,251,519 |
| Amounts attributable to |
||
| Net income (loss) | $ (1,458,707) | $ 1,566,980 |
| |
|||||
| Condensed Statement of Cash Flows | |||||
| For the Three Months | |||||
| Ended September 30, | |||||
| 2011 | 2010 | ||||
| Cash flows from operating activities: | |||||
| Net (loss) income | $ (1,321,451) | $ 2,541,489 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation and amortization | 980,778 | 897,383 | |||
| Provision for bad debts | 192,250 | 254,632 | |||
| Share of net loss from investment under equity method | 100,000 | 70,438 | |||
| Loss on sale of assets | 1,641 | 14,794 | |||
| Stock issued for interest on notes payable | -- | 14,419 | |||
| Stock issued for services | 118,300 | 383,950 | |||
| Fair market value of warrants and stock options granted | 59,852 | 53,594 | |||
| Beneficial conversion feature | 21,583 | 177,411 | |||
| Changes in operating assets and liabilities: | |||||
| Increase/ decrease in accounts receivable | 1,658,236 | (2,708,406) | |||
| Increase/ decrease in other current assets | 169,558 | (1,453,577) | |||
| Increase/ decrease in accounts payable and accrued expenses | (1,096,849) | (359,946) | Net cash provided by (used in) operating activities | 883,900 | (113,820) |
| Cash flows from investing activities: | |||||
| Purchases of property and equipment | (1,427,884) | (682,676) | |||
| Sales of property and equipment | 2,591 | 4,550 | |||
| Purchase of non-controlling interest in subsidiary | -- | (180,000) | |||
| Short-term investments held for sale | -- | (254,632) | |||
| Investment under equity method | (100,000) | -- | |||
| Increase in intangible assets | (1,768,681) | (1,574,143) | |||
| Net cash used in investing activities | (3,293,974) | (2,686,900) | |||
| Cash flows from financing activities: | |||||
| Proceeds from sale of common stock | -- | 2,021,139 | |||
| Proceeds from the exercise of stock options and warrants | 140,000 | 186,875 | |||
| Proceeds from convertible notes payable | 4,000,000 | -- | |||
| Payments on convertible notes payable | (2,758,330) | -- | |||
| Restricted cash | 3,000,000 | -- | |||
| Bank overdraft | 40,201 | 90,944 | |||
| Proceeds from bank loans | 1,731,634 | 1,064,554 | |||
| Payments on bank loans | 141,852 | (45,427) | |||
| Payments on capital lease obligations & loans - net | (4,885,224) | (2,365,852) | |||
| Net cash provided by financing activities | 1,410,133 | 952,233 | |||
| Effect of exchange rate changes in cash | (49,174) | (72,246) | |||
| Net increase in cash and cash equivalents | (1,049,115) | (1,920,733) | |||
| Cash and cash equivalents, beginning of year | 4,172,802 | 4,075,546 | |||
| Cash and cash equivalents, end of year | $ 3,123,686 | $ 2,154,813 | |||
| |
||
| Reconciliation to GAAP | ||
| Three Months | Three Months | |
| Ended | Ended | |
| |
|
|
| Net Income (loss) before preferred dividend, per GAAP | $ (1,458,708) | $ 1,566,980 |
| Income Taxes | 24,534 | 8,556 |
| Depreciation and amortization | 980,779 | 897,384 |
| Interest expense | 251,430 | 315,644 |
| Interest (income) | (32,805) | (84,461) |
| EBITDA | $ (234,769) | $ 2,704,103 |
| Weighted Average number of shares outstanding | ||
| Basic | 55,883,268 | 39,544,096 |
| Diluted | 55,883,268 | 43,251,519 |
| Basic EBITDA | $ (0.004) | $ 0.07 |
| Diluted EBITDA | $ (0.004) | $ 0.06 |
CONTACT:
[email protected]
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