SAN MARCOS, Calif., May 17, 2002 (PRIMEZONE) -- Global ePoint, Inc. (the "Company") (Nasdaq:GEPT) today reported on results of operations for the first quarter ended March 31, 2002.
As previously announced, on June 1, 2001, the Company completed the sale of those assets used in its existing lottery business, relating to the manufacture, sale, lease and service of instant lottery ticket vending machines. As a result of the sale, the previous operations related to the lottery assets have been reflected as discontinued operations on the Company's financial statements. The sale was the first major step in the Company's long-term corporate strategy, which is intended to enhance shareholder value by transforming the Company from its then existing business structure into a structure more able to take advantage of new market opportunities.
Revenues from continuing operations for the first quarter of 2002 were approximately $86 thousand versus revenues of approximately $6 thousand in the prior year comparable quarter. The increase in revenues was primarily from interest and investment income resulting from the Company's cash reserves and investments. Total operating expenses from continuing operations for the first quarter of 2002 were approximately $385 thousand versus total operating expenses of $595 thousand for the prior year comparable quarter. Included in operating expenses for 2002 were restructuring costs of $207 thousand that consisted of payroll, facilities costs, refurbishment costs and certain other charges incremental to restructuring operations and preparing for new business activities. Such costs are expected to be completed by the Fall of 2002. Without restructuring costs, the Company's total operating expenses in 2002 would have been $178 thousand, less than half of the prior year's quarter's total operating expenses. As a result of the above, the Company reported a net loss from continuing operations of approximately $299 thousand ($.06 per share) in the first quarter of 2002, versus a net loss from continuing operations of approximately $589 thousand ($.14 per share) for the first quarter of 2001.
During the first quarter of 2001, the Company generated net income from discontinued operations of approximately $294 thousand ($.07 per share). The net income from discontinued operations combined with the net loss from continuing operations generated an overall net loss in the first quarter of 2001 of approximately $295 thousand ($.07 per share). The Company did not have discontinued operations in 2002.
As of March 31, 2002, the Company maintained over $5 million in cash and cash equivalents and net tangible equity of approximately $9 million. The cash funds have been generally placed in short-term, highly liquid investments pending the completion of the Company's strategic initiatives.
Frederick Sandvick, the Company's Chairman and Chief Executive Officer, commented, "As previously reported, we have set forth on a series of actions intended to transform the Company; and to strategically move forward with new market opportunities that can better enhance shareholder value. During the first quarter of 2002 we continued moving forward with our plans to transition into new market opportunities. In that regard, we have been undergoing restructuring costs that primarily relate to readying our existing inventory of card dispensing equipment for redeployment and sale. We anticipate the launch in 2002 of a new division, named Global Telephony, in the high-volume, cash-oriented prepaid telephony market, once our steps necessary for the redeployment of the equipment are complete."
"We also are continuing to review possible merger and acquisition candidates as well as other market opportunities. We remain extremely optimistic that we will be able to accelerate our entry into new market opportunities through a merger or acquisition. Although the Company continues to face considerable changes, opportunities, risks and challenges ahead, we are excited about the future."
About Global ePoint
Global ePoint has provided effective technologies for transaction automation since its formation in 1991. Global ePoint pioneered the development of the instant ticket vending machine for lotteries worldwide and has designed, sold, leased and serviced high-security vending machines both domestically and internationally. Global ePoint sold its lottery business on June 1, 2001, and is now proceeding with plans to enter into new market opportunities.
Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the successful completion of proposed equity raises, which may be necessary for the Company to implement its plans to develop new market opportunities, continued acceptance of the Company's products and services in the marketplace, competitive factors, new products and technological changes, the Company's successful entry into new markets, the Company's ability to increase its customer base, as well as general, political and other uncertainties related to customer purchases and agreements and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission.
Global ePoint, Inc.
Selected Financial Information
(In thousands, except per share data)
Three Months Ended March 31,
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2002 2001
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Revenues $ 86 $ 6
Loss from continuing operations $(299)(A) $(589)
Income from discontinued operations -- $ 294
Net loss $(299)(A) $(295)
Earnings (loss) per share:
Continuing operations $(.06)(A) $(.14)
Discontinued operations -- .07
Net loss $(.06)(A) $(.07)
(A) Includes restructuring costs of $207 thousand