CALABASAS, Calif., Oct. 9, 2003 (PRIMEZONE) -- NetSol Technologies, Inc. (Nasdaq:NTWK), a developer of proprietary software applications, today reported revenues for its fourth fiscal quarter ended June 30, 2003, of $1.2 million, an increase of 67 percent when compared to revenues of $736,364 for the fourth quarter of fiscal 2002.
Fourth Quarter Highlights:
-- DaimlerChrysler Leasing Thailand selected NetSol's LeaseSoft.CAP
leasing solution
-- DaimlerChrysler Leasing New Zealand selected NetSol's
LeaseSoft.CAP leasing solution
-- UMF Leasing Singapore successfully implemented LeaseSoft.CAP
-- One of the world's largest financial institutions selected NetSol
to provide IT services
-- Knowledge Base Management Systems from Altvia, NetSol's new U.S.
subsidiary, were installed in the Center for International Private
Enterprise
-- NetSol achieved SEI CMM Level 3 rating -- only a few companies in
the world have achieved this rating
-- Joint venture signed with Hyundai Information Technology
The company reported a net loss for the fourth quarter ended June 30, 2003, of $416,274, or a loss per weighted average share of ($0.02), a significant improvement when compared to a loss of $1,643,991, or a loss per weighted average share of ($0.11), for the prior year's fourth quarter. According to NetSol's Chairman and CFO Najeeb U. Ghauri, increases in productivity and software license sales with greater margins produced gross profits of $484,789 or 39 percent gross margins. This compares to gross profits of $82,314 or 11 percent gross margins for the comparable quarter -- a significant improvement. "Results for the fourth quarter exceeded the company's expectations," commented Ghauri.
Revenues for fiscal 2003 ended June 30, 2003, were $3.7 million with a net loss of $2.1 million, or a loss per weighted average share of ($0.09) compared to revenues of $3.6 million with a net loss of $6.0 million, or a loss per weighted average share of ($0.40) for fiscal 2002. Losses for fiscal 2003 were reduced approximately $3.9 million when compared to fiscal 2002.
"Our gross profit margins improved considerably during fiscal 2003, up 52 percent when compared to gross profit margins of 20 percent for fiscal 2002," continued Ghauri. "The improved margins are due in part to information technology services generating approximately 82 percent of total revenues. In addition to lowering cost of sales through product mix and increased productivity, we have reduced key operating expenses for fiscal 2003 by 32 percent when compared to fiscal 2002. This included a reduction of approximately 37 percent in salaries and associated costs, along with a 72 percent reduction of expenses for professional services and non-cash compensation. We will continue to monitor and reduce operational costs where applicable."
It is important to note that NetSol's EBITDA for the fourth quarter, earnings before interest, tax, deprecation and amortization and a fundamental way to value a company's performance, was a negative $180,223. But, without a one-time settlement expense and a very conservative allowance for bad debts, EBITDA for the quarter was a positive $270,187. For the year NetSol reported a negative EDITDA of $560,616. Without the one-time settlement expense and a conservative allowance for bad debts, EBITDA was $57,527. "This is a significant accomplishment for NetSol and greatly improves our fundamentals," commented Ghauri.
"We have an impressive pipeline of new business opportunities within our Asia Pacific, U.S. and European markets and, as usual, expect the bulk of our revenue to be generated in the company's third and fourth quarters," said NetSol CEO Naeem Ghauri. "Historically, we have experienced some seasonality during the first and second quarter due to vacations and multiple regional holidays."
Ghauri went on to note that in addition to identified business for fiscal 2004, NetSol expects its partnership with Hyundai to begin generating revenue in the second half of the year. "We expect to be bidding with Hyundai on a number of infrastructure-related projects within Pakistan," added Ghauri.
"Software companies that are positioned for success are those with viable business models, mature products and services, strong partnerships and the ability to provide a diversity of products and services," continued Ghauri. "NetSol is partnering with three strong companies: Hyundai, Intel Pakistan and Akhter Group PLC, the oldest computer company in the United Kingdom. These partnerships provide the means to target new industries and expand our telecommunications subsidiary from a regional company into a national provider of wireless and broadband services."
"We are strategically positioned to benefit from improved economic trends within the business community and expect our revenue to grow 60 to 70 percent during fiscal 2004. Our goal and focus is to become a profitable company," added Ghauri.
"While our new relationship with Intel did not occur during the fourth quarter," commented Ghauri, "we are pleased to participate in Intel's Solution Blueprint program. Our LeaseSoft product met Intel's stringent selection criteria, validating its cutting edge design based on the latest technologies. Our LeaseSoft product is optimized for Intel's 32 bit environment and we have already begun the enhancements allowing LeaseSoft to be available on Intel's 64-bit platform."
About NetSol Technologies, Inc.
NetSol Technologies is an end-to-end solution provider for the lease and finance industry. Headquartered in Calabasas, CA, NetSol Technologies, Inc. operates on a global basis with locations in the U.S., Europe, East Asia and Asia Pacific. NetSol helps its clients identify, evaluate and implement technology solutions to meet their most critical business challenges and maximize their bottom line. By utilizing its worldwide resources, NetSol has been delivering high quality, cost effective IT services ranging from consulting and application development to systems integration and outsourcing for years. Their commitment to quality is demonstrated by achieving both ISO 9001 and SEI (Software Engineering Institute) CMM (Capability Maturity Model) Level 3 assessment.
Securities Exchange Act of 1934
This release is comprised of inter-related information that must be interpreted in the context of all the information provided; accordingly, care should be exercised not to consider portions of this release out of context. This release is provided in compliance with Commission Regulation FD and contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumption or future events or performance, are not statements of historical fact and may be "forward-looking statements". Such statements reflect the current views of NetSol Technologies with respect to future events and are subject to certain assumptions, including those described in this release. Should one or more of the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed or expected. NetSol Technologies does not intend to update these forward-looking statements prior to announcement of quarterly or annual results.
NETSOL TECHNOLOGIES, INC.
SELECTED FINANCIAL DATA
FOURTH QUARTER ENDED JUNE 30
Three Months Ended June 30
2003 2002
Sales $1,232,472 $ 736,364
Cost Of Sales 746,683 654,050
Gross Profit 485,789 82,314
GP % 39% 11%
General Administrative
And Selling Expenses 215,000 654,000
Non-recurring Charges 202,759 160,000
Provisions for Bad Debt 247,651 0
EBITDA (180,223) (791,761)
Net Loss Per Share ($0.02) ($0.10)