- Revenue Grew to $12.4 Million from $8.6 Million, with $5
Million in Gross Profit
- Cash and Cash Equivalents Increased to $13.5 Million from $11.5
Million at Fiscal Year-End
- Company Builds Out European Presence; Signs Two New Agreements
in the Region
Conference Call Scheduled Today at 4:15 p.m. ET
(1:15 p.m. PT)
NetSol Technologies, Inc. (Nasdaq:NTWK), a global provider of IT
and enterprise software solutions, today reported non-GAAP adjusted
diluted earnings per share of $0.09 for the second quarter ended
December 31, 2014, compared with breakeven for the same period last
year. The company reported net revenue of $12.4 million for the
quarter, compared with $8.6 million for the same period last year.
GAAP loss per share for the 2015 fiscal second quarter was reduced
to $0.14 from a loss of $0.18 per share for the same period last
year.
"Our top-line growth for the second quarter reflected strong
maintenance and services revenue, as well as the beginning of
revenue recognition for the $16 million contract announced in
August of last year, further confirming that our resurgence is
real," said Najeeb Ghauri, CEO. "Considering the implementation of
contracts underway, we are fast approaching our fiscal 2013 record
net revenue, a time marked by strong growth prior to our
next-generation product transition period. Further adding to our
optimism are two recent developments in Europe, along with
expanding relationships with clients in North America, and
continued growth in the Asia Pacific region both for NFS AscentTM
and our legacy solutions.
"On the bottom line, increased depreciation and amortization,
reflecting the launch of NFS Ascent, and depreciation for the new
building on the NetSol campus, as well as investment in additional
staff to support our growth objectives, impacted financial results
on a GAAP basis," added Ghauri.
Fiscal 2015 Second Quarter Financial
Results
The following comparison refers to results for the fiscal 2015
second quarter versus the fiscal 2014 second quarter.
Total net revenues improved to $12.4 million from $8.6 million,
with license, maintenance and services revenue all contributing to
the increase.
- License revenue was $2.1 million, versus $456,000 in the same
period last year primarily due to additional license sales for
NFSTM;
- Maintenance revenue increased to $3.3 million from $2.9 million
last year as a result of completed implementations;
- Services revenue improved to $5.6 million from $4.0 million in
the same period last year as a result of incremental increases in
NetSol's day rates for all skill sets, and additional deliveries of
customer change requests;
- Services revenue – related party, reflecting revenue from
NetSol's joint venture with the Innovation Group – was $1.4
million, compared with $1.3 million last year.
Gross profit improved to $5.0 million from $2.9 million last
year.
Total operating expenses amounted to $6.0 million, versus $4.4
million last year. The increase relates to higher selling and
marketing expenses and increased general and administrative costs
as the company continues to invest in Germany, the U.K., Thailand
and China.
Total operating loss was reduced to $1.0 million from $1.5
million last year.
GAAP net loss was $1.4 million for the fiscal 2015 second
quarter, equal to $0.14 per share, compared with a GAAP net loss of
$1.6 million, or $0.18 per share, in the comparable period last
fiscal year.
Adjusted EBITDA (a non-GAAP measure) was $900,000, or $0.09 per
adjusted diluted share, for the fiscal 2015 first quarter, which
removed $2.2 million in depreciation and amortization. This
compares with adjusted EBITDA of $6,479, or breakeven per adjusted
diluted share, last year, which removed $1.6 million in
depreciation and amortization.
The reconciliation of adjusted EBITDA to net income, the most
comparable financial measure based upon GAAP, as well as a further
explanation of adjusted EBITDA, is included in the financial tables
at the end of this press release.
Fiscal 2015 First Half Financial Results
For the first six months of fiscal 2015, total net revenue rose
to $22.6 million compared to $17.5 million for the first six months
of fiscal 2014. The company reported a GAAP net loss of $3.2
million, or $0.34 per share, compared with a GAAP net loss of $2.7
million, or $0.30 per share, in the comparable period last
year.
Adjusted EBITDA (a non-GAAP measure) for the first six months of
fiscal 2015 increased to $1.5 million, or $0.16 per adjusted
diluted share, which removed $4.6 million in depreciation and
amortization. This compares with adjusted EBITDA of $310,000, or
$0.03 per adjusted diluted share, last year, which removed $2.9
million in depreciation and amortization.
At September 30, 2014, cash and cash equivalents grew to $13.5
million from $11.5 million at June 30, 2014.
Recent Highlights:
- Expanded presence in Europe with two new senior executives—
Paul Stevens in the newly created position of chief information
officer – Europe, and Tim O'Sullivan as head of sales –
Europe;
- Signed two new agreements in Europe, one with a major U.S. auto
captive finance company, and the other with a major U.K-based asset
finance company;
- Added 50 LeasePak license seats with a major U.S.-based auto
captive leasing company; and
- Attended the Equipment Leasing and Finance Association and Auto
Finance Summit conferences to demo NetSol's next-generation
financing and leasing solution, NFS Ascent and NFS MobilityTM.
Fiscal 2015 Second Quarter Conference Call
When: |
|
Wednesday, February 11 |
Time: |
|
4:15 p.m. Eastern Time |
Phone: |
|
1-888-505-4369
(domestic) |
|
|
1-719-325-2455
(international) |
A live Webcast will be available online within the investor
relations section of NetSol's website at http://www.netsoltech.com,
where it will be archived for 90 days.
About NetSol Technologies
NetSol Technologies, Inc. (Nasdaq:NTWK) is a worldwide provider
of IT and enterprise software solutions primarily serving the
global leasing and financing industry. The Company's suite of
applications are backed by 40 years of domain expertise and
supported by a committed team of more than 1000 professionals
placed in eight strategically located support and delivery centers
throughout the world.
To learn more about NetSol, visit www.netsoltech.com or watch
the corporate video at
https://www.youtube.com/user/netsolwebmaster.
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)
NetSol Technologies,
Inc. and Subsidiaries |
Consolidated Balance
Sheets |
|
|
|
|
As of December 31,
2014 |
As of June 30, 2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 13,486,526 |
$ 11,462,695 |
Restricted cash |
90,000 |
2,528,844 |
Accounts receivable, net of
allowance of $1,058,214 and $1,088,172 |
7,706,162 |
5,403,165 |
Accounts receivable, net -
related party |
2,123,567 |
2,232,610 |
Revenues in excess of
billings |
3,098,226 |
2,377,367 |
Other current assets |
2,564,116 |
2,857,879 |
Total current assets |
29,068,597 |
26,862,560 |
Property and equipment, net |
27,543,489 |
29,721,128 |
Intangible assets, net |
26,030,664 |
28,803,018 |
Goodwill |
9,516,568 |
9,516,568 |
Total
assets |
$ 92,159,318 |
$ 94,903,274 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 4,971,101 |
$ 5,234,887 |
Current portion of loans and
obligations under capitalized leases |
3,217,397 |
5,791,258 |
Unearned revenues |
8,141,083 |
3,239,852 |
Common stock to be issued |
721,592 |
347,518 |
Total current liabilities |
17,051,173 |
14,613,515 |
Long term loans and obligations under
capitalized leases; less current maturities |
1,082,310 |
1,532,080 |
Total
liabilities |
18,133,483 |
16,145,595 |
Commitments and
contingencies |
|
|
Stockholders' equity: |
|
|
Preferred stock, $.01 par
value; 500,000 shares authorized; |
-- |
-- |
Common stock, $.01 par value;
14,500,000 shares authorized; 9,743,850 and 9,150,889
issued and outstanding as of December 31, 2014 and June 30,
2014 |
97,439 |
91,509 |
Additional paid-in-capital |
117,834,686 |
115,394,097 |
Treasury stock |
(415,425) |
(415,425) |
Accumulated deficit |
(38,382,498) |
(35,177,303) |
Stock subscription
receivable |
(2,280,488) |
(2,280,488) |
Other comprehensive loss |
(16,208,648) |
(14,979,223) |
Total NetSol stockholders'
equity |
60,645,066 |
62,633,167 |
Non-controlling interest |
13,380,769 |
16,124,512 |
Total stockholders'
equity |
74,025,835 |
78,757,679 |
Total liabilities and
stockholders' equity |
$ 92,159,318 |
$ 94,903,274 |
|
NetSol Technologies,
Inc. and Subsidiaries |
Consolidated Statement
of Operations |
|
|
|
|
|
|
For the Three
Months Ended December 31, |
For the Six Months
Ended December 31, |
|
2014 |
2013 |
2014 |
2013 |
Net Revenues: |
|
|
|
|
License fees |
$ 2,100,715 |
$ 455,616 |
$ 3,685,268 |
$ 2,708,183 |
Maintenance fees |
3,329,587 |
2,867,195 |
6,178,228 |
5,247,604 |
Services |
5,567,826 |
3,974,591 |
9,965,783 |
7,294,814 |
Services - related party |
1,354,476 |
1,256,899 |
2,750,476 |
2,224,442 |
Total net revenues |
12,352,604 |
8,554,301 |
22,579,755 |
17,475,043 |
|
|
|
|
|
Cost of revenues: |
|
|
|
|
Salaries and
consultants |
4,298,900 |
3,160,760 |
8,415,117 |
6,420,551 |
Travel |
590,353 |
347,670 |
1,012,224 |
736,255 |
Depreciation and
amortization |
1,800,753 |
1,120,363 |
3,602,320 |
2,046,678 |
Other |
662,046 |
1,006,465 |
1,336,909 |
1,695,009 |
Total cost of revenues |
7,352,052 |
5,635,258 |
14,366,570 |
10,898,493 |
|
|
|
|
|
Gross profit |
5,000,552 |
2,919,043 |
8,213,185 |
6,576,550 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Selling and marketing |
1,574,955 |
893,781 |
2,707,315 |
1,948,922 |
Depreciation and
amortization |
438,003 |
430,947 |
1,018,776 |
857,564 |
General and administrative |
3,911,754 |
2,997,431 |
7,587,510 |
6,404,431 |
Research and development
cost |
80,437 |
55,114 |
146,702 |
113,802 |
Total operating expenses |
6,005,149 |
4,377,273 |
11,460,303 |
9,324,719 |
|
|
|
|
|
Loss from operations |
(1,004,597) |
(1,458,230) |
(3,247,118) |
(2,748,169) |
|
|
|
|
|
Other income and
(expenses) |
|
|
|
|
Loss on sale of assets |
(69,543) |
(175,237) |
(80,595) |
(189,032) |
Interest expense |
(47,265) |
(92,738) |
(120,358) |
(161,955) |
Interest income |
106,078 |
39,931 |
163,997 |
72,785 |
Gain (loss) on foreign currency
exchange transactions |
(421,082) |
96,039 |
(341,862) |
1,207,462 |
Other income |
18,162 |
59 |
18,539 |
665 |
Total other income
(expenses) |
(413,650) |
(307,786) |
(360,279) |
763,277 |
|
|
|
|
|
Net loss before income
taxes |
(1,418,247) |
(1,766,016) |
(3,607,397) |
(1,984,892) |
Income tax provision |
(87,683) |
(29,270) |
(127,759) |
(40,401) |
Net loss from continuing
operations |
(1,505,930) |
(1,795,286) |
(3,735,156) |
(2,025,293) |
Loss from discontinued
operations |
-- |
(145,527) |
-- |
(378,468) |
Net loss |
(1,505,930) |
(1,940,813) |
(3,735,156) |
(2,403,761) |
Non-controlling
interest |
138,764 |
313,905 |
529,961 |
(320,262) |
Net loss attributable to
NetSol |
$ (1,367,166) |
$ (1,626,908) |
$ (3,205,195) |
$ (2,724,023) |
|
|
|
|
|
|
|
|
|
|
Amount attributable to NetSol common
shareholders: |
|
|
|
|
Loss from continuing
operations |
$ (1,367,166) |
$ (1,481,381) |
$ (3,205,195) |
$ (2,345,555) |
Loss from discontinued
operations |
-- |
(145,527) |
-- |
(378,468) |
Net loss |
$ (1,367,166) |
$ (1,626,908) |
$ (3,205,195) |
$ (2,724,023) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Net loss per share from
continuing operations: |
|
|
|
|
Basic |
$ (0.14) |
$ (0.16) |
$ (0.34) |
$ (0.26) |
Diluted |
$ (0.14) |
$ (0.16) |
$ (0.34) |
$ (0.26) |
|
|
|
|
|
Net loss per share from
discontinued operations: |
|
|
|
|
Basic |
$ -- |
$ (0.02) |
$ -- |
$ (0.04) |
Diluted |
$ -- |
$ (0.02) |
$ -- |
$ (0.04) |
|
|
|
|
|
Net loss per common share |
|
|
|
|
Basic |
$ (0.14) |
$ (0.18) |
$ (0.34) |
$ (0.30) |
Diluted |
$ (0.14) |
$ (0.18) |
$ (0.34) |
$ (0.30) |
|
|
|
|
|
Weighted average number of shares
outstanding |
|
|
|
|
Basic |
9,654,334 |
9,056,024 |
9,433,829 |
9,006,015 |
Diluted |
9,654,334 |
9,056,024 |
9,433,829 |
9,006,015 |
|
NetSol Technologies,
Inc. and Subsidiaries |
Consolidated Statement
of Cash Flows |
|
For the Six Months
Ended December 31, |
|
2014 |
2013 |
Cash flows from operating
activities: |
|
|
Net loss |
$ (3,735,156) |
$ (2,403,761) |
Adjustments to reconcile
net loss to net cash provided by operating
activities: |
|
|
Depreciation and
amortization |
4,621,096 |
3,144,948 |
Provision for bad
debts |
-- |
259,306 |
Share of net loss from
investment under equity method |
-- |
166,648 |
Loss on sale of
assets |
80,595 |
189,032 |
Stock issued for
services |
606,536 |
640,247 |
Fair market value of
warrants and stock options granted |
311,244 |
158,783 |
Changes in
operating assets and liabilities: |
|
|
Accounts
receivable |
(2,279,774) |
(1,246,995) |
Accounts receivable -
related party |
40,907 |
(842,503) |
Revenues in excess of
billing |
(765,672) |
8,612,283 |
Other current
assets |
286,838 |
367,741 |
Accounts payable and
accrued expenses |
59 |
1,388,473 |
Unearned
revenue |
4,857,469 |
2,228,992 |
Net cash provided
by operating activities |
4,024,142 |
12,663,194 |
|
|
|
Cash flows from investing
activities: |
|
|
Purchases of property and
equipment |
(1,772,866) |
(6,059,596) |
Sales of property and
equipment |
179,904 |
78,678 |
Purchase of
non-controlling interest in subsidiaries |
(577,222) |
(17,853) |
Increase in intangible
assets |
-- |
(2,312,919) |
Net cash used in
investing activities |
(2,170,184) |
(8,311,690) |
|
|
|
Cash flows from financing
activities: |
|
|
Proceeds from sale of
common stock |
1,610,000 |
-- |
Proceeds from the
exercise of stock options and warrants |
116,400 |
560,500 |
Proceeds from exercise of
subsidiary options |
-- |
311,709 |
Restricted
cash |
2,438,844 |
(660,672) |
Dividend paid by
subsidiary to Non controlling interest |
(780,106) |
(266,343) |
Proceeds from bank
loans |
57,405 |
1,276,505 |
Payments on capital lease
obligations and loans - net |
(2,867,974) |
(781,756) |
Net cash provided
by financing activities |
574,569 |
439,943 |
Effect of exchange rate
changes |
(404,696) |
(1,084,723) |
Net increase in cash and cash
equivalents |
2,023,831 |
3,706,724 |
Cash and cash equivalents, beginning of
the period |
11,462,695 |
7,874,318 |
Cash and cash equivalents, end
of period |
$ 13,486,526 |
$ 11,581,042 |
|
NetSol Technologies,
Inc. and Subsidiaries |
Reconciliation to
GAAP |
|
|
|
|
|
|
Three Months Ended December 31,
2014 |
Three Months Ended December 31,
2013 |
Six Months Ended December 31,
2014 |
Six Months Ended December 31,
2013 |
|
|
|
|
|
Net Income (loss) before preferred dividend,
per GAAP |
$ (1,367,166) |
$ (1,626,908) |
$ (3,205,195) |
$ (2,724,023) |
Income Taxes |
87,683 |
29,270 |
127,759 |
40,401 |
Depreciation and
amortization |
2,238,756 |
1,551,310 |
4,621,096 |
2,904,242 |
Interest expense |
47,265 |
92,738 |
120,358 |
161,955 |
Interest (income) |
(106,078) |
(39,931) |
(163,997) |
(72,785) |
EBITDA |
$ 900,460 |
$ 6,479 |
$ 1,500,021 |
$ 309,790 |
|
|
|
|
|
Weighted Average number of shares
outstanding |
|
|
|
|
Basic |
9,654,334 |
9,056,024 |
9,433,829 |
9,006,015 |
Diluted |
9,654,334 |
9,089,846 |
9,433,829 |
9,039,838 |
|
|
|
|
|
Basic EBITDA |
$ 0.09 |
$ 0.00 |
$ 0.16 |
$ 0.03 |
Diluted EBITDA |
$ 0.09 |
$ 0.00 |
$ 0.16 |
$ 0.03 |
Although the net EBITDA income is a non-GAAP measure of
performance, we are providing it because we believe it to be an
important supplemental measure of our performance that is commonly
used by securities analysts, investors, and other interested
parties in the evaluation of companies in our industry. It
should not be considered as an alternative to net income, operating
income or any other financial measures calculated and presented,
nor as an alternative to cash flow from operating activities as a
measure of our liquidity. It may not be indicative of the
Company's historical operating results nor is it intended to be
predictive of potential future results.
Investor Contacts:
PondelWilkinson Roger Pondel | Matt
Sheldon investors@netsoltech.com (310) 279-5980
Media Contacts:
PondelWilkinson George Medici |
gmedici@pondel.com (310) 279-5968
NetSol Technologies (NASDAQ:NTWK)
Historical Stock Chart
From Mar 2024 to Apr 2024
NetSol Technologies (NASDAQ:NTWK)
Historical Stock Chart
From Apr 2023 to Apr 2024