FORT LAUDERDALE, Fla., June 15, 2005 (PRIMEZONE) -- Weida Communications, Inc. (Pink Sheets:WDAC), a U.S. managed telecommunications operator in China commented on financial results for the third quarter fiscal 2005 and nine months ending March 31, 2005 and has provided positive updates on its China business activities. Recent Third Quarter Highlights:
-- Revenues were $104,519
-- Total assets increased to $16 million compared to $10.2 million
on December 31, 2004
-- Cash and cash equivalents totaled $1.5 million
-- Weida signed multiple contracts in the power industry to lease 46
terminals
-- China Telecom relationship moves to second phase; estimated to
lease over 10 terminals
Weida reported revenues for the third quarter fiscal 2005 of $104,519. Net loss for the third quarter fiscal 2005 was $1.5 million, or $0.02 per basic and diluted share, compared with a loss of $663,485 or $0.01 per basic and diluted share in the third quarter fiscal 2004. Weighted average shares outstanding for the third quarter fiscal 2005 and the third quarter fiscal 2004 were 75.3 million and 68.9 million, respectively.
Operating expenses for the third quarter fiscal 2005 totaled $1.4 million, compared to $682,630 for the same period a year ago.
Revenues for the first nine months of fiscal 2005 amounted to $299,354. Net loss for the first nine months of fiscal 2005 was $6.73 million, or $0.09 per basic and diluted share, compared to $1.67 million, or $0.02 per basic and diluted share, for the same period in fiscal 2004. Weighted average shares outstanding for nine months of fiscal 2005 and 2004 were 73.8 million and 68.9 million, respectively.
The Company's total assets increased to $15.97 million at the end of the third quarter fiscal 2005 up $5.6 million from the fiscal year ending June 30, 2004. Increases in total assets reflect sales growth and the acquisition of Weida PRC. As of March 31, 2005, Weida had cash and cash equivalents of $1.5 million compared to the three months ending December 31, 2004 where cash was $2.3 million. Net cash in operating and investing activities during the nine months ended March 31, 2005 was $1.5 million.
"We are pleased with the progression of Weida and our revenue growth to date," said Mitchell Sepaniak, CEO, president and chairman of Weida. "There has been positive activity in China and we are seeing an increasing sales trend. With the recent additions to our management team, high-value products and increased leased terminals, Weida is poised to capitalize on the lucrative market for VSAT technology in China. We are continuing to pursue alternative means of obtaining additional private financing, which may take form of secured or unsecured debt or preferred equity financing."
China Operations Update
Weida has signed contracts for 46 terminals with Xinjiang Electric Power Bureau, Guangxi Liuzhou Electric Power Bureau and Heibei Langfang Electric Power Bureau, which represent a significant increase compared with the same period last year.
Weida plans to expand its service offering to include state-of-the-art GPS tracking for the oil and gas industry as well as government agencies in China. Furthermore, Weida will transition its satellites from AsiaSat 3 to AsiaSat 4, providing more extensive coverage especially in the Northwestern and Northeastern regions of China where the market demands for satellite communications are the greatest. The company also plans to carry out a large-scale upgrade to Suzhou hub station, which will expand its bandwidth and speed as well as continue to demonstrate Weida's leadership in satellite communication services and technology in China.
Additionally, in the fourth quarter fiscal 2005, the cooperation with China Telecom will be carried out into phase II. Based on the success of the first phase of China Petrol's Project of Natural Gas Transportation from West to East, which leased 14 terminals, ChinaPetro is planning the second phase project that is projected to lease over 10 terminals.
"Our efforts to build and grow our business are moving ahead as planned," said Chris Lennon, chief operating officer of Weida Communications. "During the second half of 2005 we anticipate strong sales momentum. More than half the deals in our sales pipeline are in Emergency communications. This is one of our more lucrative sales channels. We are creating high value-added products, like the vehicle-loaded satellite communications system, to meet market demands. We believe these initiatives and investments will greatly enhance Weida's position and result in greater long-term revenue."
About Weida Communications, Inc.
Weida Communications is a U.S.-managed company that provides data communication services via satellite to businesses and government agencies throughout China. The company participates in the fast-growing China telecom market through its majority profit sharing interest in and control of the only public company in China holding a license for bi-directional VSAT (Very Small Aperture Terminal) satellite communications services. VSAT is an attractive telecommunications solution in China with its exploding demand for telecommunications, dense urban areas, and extensive mountainous terrain. For more information, visit the Weida Communications, Inc. Web site at http://www.weida.com.
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations of the management of Weida Communications, Inc. (the Company) only, and are subject to a number of risk factors and uncertainties, including but not limited to the outcome of ongoing governmental and independent investigations, our need for additional financing, limited operating history, Weida Communications' historical and likely future losses, uncertain regulatory landscape in the People's Republic of China, fluctuations in quarterly operating results, the Company's reliance on the provision of VSAT-based communications services for the majority of its revenues, changes in technology and market requirements, decline in demand for the Company's products, inability to timely develop and introduce new technologies, products and applications, difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel, loss of market share, and pressure on pricing resulting from competition, which could cause the actual results or performance of the Company to differ materially from those described therein. We undertake no obligation to update these forward-looking statements. For a more detailed description of the risk factors and uncertainties affecting the Company, refer to the Company's reports filed from time to time with the Securities and Exchange Commission, including the information about risk factors provided in Item 1, "Business," in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2004, filed with the SEC on October 12, 2004.
Weida Communications, Inc. and Subsidiary
Condensed Consolidated Statement of Operations
(Unaudited)
For The Three and Nine Months Ended March 31, 2005 and March 31, 2004
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------ ------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenue
Sales of VSAT
equipment $ 69,758 $ -- $ 171,549 $ --
Transponder
utilization
revenue 34,761 -- 127,805 --
----------- ----------- ----------- -----------
104,519 -- 299,354 --
----------- ----------- ----------- -----------
Costs and
expenses
Cost of sales 442,839 -- 910,205 --
Selling,
general, and
administrative
costs 968,889 682,630 5,951,717 1,725,863
----------- ----------- ----------- -----------
1,411,728 682,630 6,861,922 1,725,863
----------- ----------- ----------- -----------
Operating loss (1,307,209) (682,630) (6,562,568) (1,725,863)
Other income
(expenses)
Interest expense (34,821) -- (83,316) --
Interest income (158,895) 19,145 (80,890) 51,053
----------- ----------- ----------- -----------
(193,716) 19,145 (164,206) 51,053
----------- ----------- ----------- -----------
Net loss $(1,500,925) $ (663,485) $(6,726,774) $(1,674,810)
=========== =========== =========== ===========
Basic and
diluted net
loss per
common share $ (0.02) $ (0.01) $ (0.09) $ (0.02)
Weighted average
shares
outstanding 75,274,922 68,962,275 73,817,796 68,962,975
Weida Communications, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
At March 31, 2005 and June 30, 2004
March 31, June 30,
2005 2004
------------ ------------
(Unaudited)
ASSETS
Current Assets:
Cash $ 1,468,112 $ 1,617,845
Accounts receivable, net 70,783 --
Interest receivable -- 80,968
Advances 15,605 --
Related party receivable -- 438,640
Inventories 1,460,863 --
Prepaid expenses - current 230,164 173,750
------------ ------------
Total Current Assets 3,245,527 2,311,203
Property, Plant, & Equipment 1,515,686 18,121
Other Assets:
Notes receivable 2,200,000 2,200,000
Goodwill 9,000,662 --
Deferred acquisition costs -- 5,704,004
Prepaid expenses - non-current
portion -- 62,500
Other assets 3,880 3,880
------------ ------------
Total Other Assets 11,204,542 7,970,384
------------ ------------
Total Assets $ 15,965,755 $ 10,299,708
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank loan $ 2,416,451 $ --
Short term borrowing 32,599 --
Accounts payable 876,616 1,360,703
Accrued expenses and other
payables 410,373 158,100
Claim settlement payable -
current portion 250,833 --
Amounts due to shareholders 229,994 --
Amounts due to related parties 1,348,339 756,386
------------ ------------
Total Current Liabilities 5,565,205 2,275,189
Long term liabilities:
Claim settlement payable -
net of current portion 174,167 --
Long term loan 270,000 270,000
------------ ------------
Total Liabilities 6,009,372 2,545,189
------------ ------------
Shareholders' equity:
Preferred stock, $0 par value,
10,000,000 shares authorized,
none issued at March 31, 2005 -- --
Common stock, $0 par value,
400,000,000 shares
authorized, 75,842,073 and
72,334,486 issued and
outstanding at March 31, 2005
and June 30, 2004,
respectively, 1,225,000 and
538,332 shares to be issued
at March 31, 2005 and June
30, 2004, respectively 19,579,051 9,408,958
Common stock to be issued 134,500 1,375,955
Accumulated deficit (9,757,168) (3,030,394)
------------ ------------
Total shareholders' equity 9,956,383 7,754,519
------------ ------------
Total Liabilities and
Shareholders' Equity $ 15,965,755 $ 10,299,708
============ ============