Attached files
| file | filename |
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| 8-K - NETSOL TECHNOLOGIES INC | v210747_8k.htm |
EXHIBIT
99.1
NEWS
RELEASE DATED FEBRUARY 10, 2011
 |
Investor Relations Contact:
RedChip
Companies, Inc.
Dave
Gentry
800-733-2447,
Ext. 104
407-644-4256,
Ext. 104
info@redchip.com
http://www.redchip.com
|
NetSol
Technologies Announces Second Quarter Fiscal 2011 Financial Results
-
Revenues were $10.4M, up 9.5% from $9.5M in 2QFY10
-
Net Income was $1.9M, up from a $0.4M net loss in 2QFY10
-
Gross margin was 66.5%, up from 62.2% in 2QFY10
CALABASAS,
Calif., February 10, 2011 – (GLOBE NEWSWIRE) — NetSol Technologies, Inc.
(“NetSol” or the “Company”) (Nasdaq: NTWK) (Nasdaq Dubai: NTWK), a U.S.
corporation providing global business services and enterprise application
solutions to private and public sector organizations worldwide, today announced
its financial results for the second fiscal quarter ended December 31, 2010. The
Company posted revenues of $10.4 million and quarterly net income of $1.9
million, or $0.04 per diluted share. These results compare to revenue of $9.5
million and a quarterly net loss of $0.4 million, or $0.01 per diluted share,
for the same period last year. Summary financial data is provided
below:
Second
Quarter Fiscal 2011 Financial Highlights
|
·
|
Revenues
for the second quarter of fiscal year 2011 increased by 9.5%
year-over-year to $10.4 million, up from $9.5 million in the second
quarter of fiscal 2010.
|
|
|
o
|
License
fees totaled $3.1 million or 30.0% of total
revenues.
|
|
o
|
Maintenance
fees totaled $2.0 million or 19.4% of total
revenues.
|
|
o
|
Service
fees totaled $5.3 million or 50.6% of total
revenues.
|
|
·
|
Net
income attributable to NetSol for the second quarter increased to $1.9
million, compared with a net loss of $0.4 million for the second quarter
of fiscal 2010.
|
|
·
|
Gross
margin for the second quarter was 66.5% based on gross profit of $6.9
million, compared with a 62.2% margin and gross profit of $5.9 million in
the same period last year.
|
|
·
|
Operating
income and operating margin for the second quarter were $3.9 million and
37.4%, respectively, compared to $1.7 million and 17.8%, respectively, in
the second quarter of fiscal 2010.
|
|
·
|
EBITDA
totaled $3.2 million or $0.06 per diluted share, versus EBITDA of $0.9
million, or $0.03 per diluted share, in the year-ago
period.
|
|
·
|
Earnings
per diluted share were $0.04 for the quarter, compared with a loss per
share of $0.01 in the same period a year
ago.
|
Six
Months Financial Highlights
|
·
|
Revenue
for the six months ended December 31, 2010 increased by 9.8%
year-over-year to $18.8 million, up from $17.1 million for the six months
ended December 31, 2009.
|
|
·
|
Net
income attributable to NetSol for the first half of fiscal 2011 increased
to $3.5 million, compared with a net loss of $0.7 million for the six
months ended December 31, 2009.
|
|
·
|
Gross
margin for the six months ended December 31, 2010 was 64.5% based on gross
profit of $12.2 million, up from a 58.2% margin and gross profit of $10.0
million in the same period last
year.
|
|
·
|
Operating
income and operating margin for the six months ended December 31, 2010
were $5.9 million and 31.5%, respectively, compared to operating income of
$2.8 million and a 16.6% operating margin for the same period last
year.
|
|
·
|
EBITDA
totaled $6.0 million or $0.13 per diluted share, versus EBITDA of $2.2
million, or $0.06 per diluted share, in the year-ago
period.
|
|
·
|
Earnings
per diluted share were $0.08 for the six-month period, compared with a
loss per diluted share of $0.02 in the same period a year
ago.
|
EBITDA is
defined as earnings before interest, taxes, depreciation and amortization. The
Company uses EBITDA as a measure of the Company's operating trends. Investors
are cautioned that EBITDA is not a measure of liquidity or of financial
performance under Generally Accepted Accounting Principles (GAAP). The EBITDA
numbers presented may not be comparable to similarly titled measures reported by
other companies. EBITDA, while providing useful information, should not be
considered in isolation or as an alternative to net income or cash flows as
determined under GAAP. Consistent with the SEC’s Regulation G, the non-GAAP
measures in this press release have been reconciled to the nearest GAAP measure,
and this reconciliation is located under the financial table heading
"Reconciliation to GAAP."
Najeeb
Ghauri, Chairman and CEO of NetSol Technologies, commented, “Demand from both
new and repeat customers remained high during the second quarter, and our bottom
line also improved as we continued to implement cost-management measures and
streamline our business processes. Key projects are being delivered on time and
on budget, quality initiatives are succeeding, and our delivery capabilities are
stronger than ever. ”
Mr.
Ghauri continued, “For the remainder of fiscal 2011, our primary focus will be
to build upon our strong foundation in the Chinese market. We are working toward
forming a wholly owned subsidiary in China, which will boost our local presence
and enable our participation in the growing banking, big ticket leasing, and
equipment rental sectors. We anticipate further penetration by NetSol into
China’s burgeoning captive leasing and finance market, where we currently have a
large majority of the IT market share. Additionally, we see numerous
opportunities in other parts of the world, including Thailand, the U.S., Saudi
Arabia and Latin America. Our successful track record and global footprint in
China, Thailand, the U.S., the UK, Australia, the Middle East and Pakistan gives
us a clear market advantage in every corner of the globe. We enter the second
half of fiscal 2011 tremendously optimistic about the growth opportunities that
lie ahead.”
Second
Quarter Fiscal 2011 Results of Operations
Revenues
Revenues
for the three months ended December 31, 2010 were $10.4 million as compared to
$9.5 million for the three months ended December 31, 2009. The increase of $0.9
million, or 9.5%, was primarily due to enhancement of services from both repeat
and new customers. Net revenues from license fees decreased 5.7% year-over-year
to $3.1 million as compared to $3.3 million for the same period a year ago.
Revenues generated from maintenance fees were $2.0 million, up 13.7% from $1.8
million for the second quarter of fiscal 2010. Revenues generated from services
totaled $5.3 million, up 19.3% from $4.4 million for the same period a year
ago.
Gross
Profit
Gross
profit for the three months ended December 31, 2010 increased 17.0%
year-over-year to $6.9 million, up from $5.9 million for the three months ended
December 31, 2009. Costs of sales for the three-month period were $3.5 million
as compared to $3.6 million for the same period a year ago. The Company’s gross
margin was 66.5% and 62.2% for the three months ended December 31, 2010 and
2009, respectively. The increase in gross margin was primarily due to the
increase in sales as well as enhanced cost efficiencies and optimum streamlining
of the Company’s global delivery and implementation model.
Income
from Operations
Operating
income for the three months ended December 31, 2010 amounted to $3.9 million as
compared to $1.7 million for the three months ended December 31, 2009. The
increase of $2.2 million was primarily due to much improved gross margins and
revenues. Operating expenses for the three-month period totaled $3.0 million as
compared to $4.2 million for the same period a year ago.
Net
Income
Net
income attributable to NetSol for the three months ended December 31, 2010 was
$1.9 million as compared to a net loss of $0.4 million for the three months
ended December 31, 2009, due to improved margins and sales. Earnings per basic
and diluted share were $0.04 for the quarter, compared with a loss per share of
$0.01 for the same period a year ago.
Results
of Operations for the Six Months Ended December 31, 2010
Revenues
Revenues
for the six months ended December 31, 2010 were $18.8 million as compared to
$17.1 million for the six months ended December 31, 2009. The increase of $1.7
million, or 9.8%, was primarily due to new licenses and incremental maintenance
fees. Net revenues from license fees increased 12.5% year-over-year to $6.6
million as compared to $5.9 million for the same period a year ago. Revenues
generated from maintenance fees were $3.7 million, up 2.9% from $3.6 million for
the first half of fiscal 2010. Revenues generated from services totaled $8.5
million, up 11.0% from $7.7 million for the same period a year
ago.
Gross
Profit
Gross
profit for the first half of fiscal 2011 was $12.2 million as compared to $10.0
million for the first half of fiscal 2010, a year-over-year increase of $2.2
million or 21.7%. Costs of sales were $6.7 million for the six-month period as
compared to $7.2 million in the same period a year ago. The Company’s gross
margin was 64.5% for the six months ended December 31, 2010, up from 58.2% for
the six months ended December 31, 2009. The increase was primarily due to the
same factors affecting gross margin for the three months ended December 31,
2010.
Income
from Operations
Operating
income for the six months ended December 31, 2010 amounted to $5.9 million as
compared to $2.8 million for the six months ended December 31, 2009. The
year-over-year increase of 108.8% was primarily due to overall cost
rationalization as well as improved gross margins and sales. Operating expenses
for the six months ended December 31, 2010 totaled $6.2 million as compared to
$7.1 million in the same period a year ago.
Net
Income
Net
income attributable to NetSol for the six months ended December 31, 2010 was
$3.5 million as compared to a net loss of $0.7 million for the six months ended
December 31, 2009, due to improved margins and sales. Earnings per diluted share
were $0.08 for the six months ended December 31, 2010, compared with a net loss
per diluted share of $0.02 for the same period a year ago.
Liquidity
and Capital Resources
As of
December 31, 2010, the Company had current assets of $39.4 million and current
liabilities of $21.7 million. Cash and cash equivalents totaled $5.9 million as
of December 31, 2010. The Company’s shareholders’ equity at December 31, 2010
was $57.9 million. The Company generated $5.3 million in cash from operating
activities during the six months ended December 31, 2010, as compared to $4.4
million for the six months ended December 31, 2009. The Company used $6.0
million in cash for investing activities during the six months ended December
31, 2010, as compared to $4.0 million for the same period in 2009. The Company
generated $2.6 million in cash from financing activities for the six months
ended December 31, 2010, as compared to $554,399 for the same period in
2009.
Recent
Business Highlights
— NetSol
achieved ISO 20000 certification, the foremost IT services management standard
in the world. NetSol is Pakistan’s first and only ISO 20000-certified
company.
— NetSol
successfully completed beta testing of its smartOCI™ search engine with Fortune
500 SAP clients and received the highest level of SAP certification for
smartOCI™. NetSol also announced its participation in the SAP® EcoHub solution
marketplace, a community-powered solution marketplace that makes it easier for
customers to discover, evaluate and buy partner solutions, including smartOCI™,
that complement SAP applications.
— NetSol
completed the delivery of a management information system to the Punjab Rural
Support Program to facilitate management of the microfinance operations of this
government program in Punjab, Pakistan.
— NetSol
signed a strategic understanding with SANY Auto Finance Co., Ltd., one of the
top 20 machinery equipment manufacturers in the world, for enhanced financial
solutions and IT services.
— NetSol
received two prestigious Teradata National IT Excellence Awards: the Excellence
in Software Export Award and the CIO of the Year Award.
— NetSol
participated in an event with its Middle East partner, Atheeb Group Ltd., to
officially launch their Atheeb NetSol Saudi Company Ltd. ("Atheeb NetSol") joint
venture. The event showcased Atheeb NetSol's product offerings to an audience
including executives from Saudi Arabia's financial, telecommunications and
defense industries.
— NetSol
signed a contract worth $2 million with the captive finance arm of a major auto
company in China to implement its entire NetSol Financial Suite (NFS) ™
solution. The client company, which is a joint venture between two major Asian
auto manufacturers, selected the NFS™ platform
to manage all of its finance operations.
— NetSol
sold additional LeasePak services to two Fortune 500 clients in North America:
the finance arm of a large automotive manufacturing company in the United
States, and the financing subsidiary of one of the largest IT network equipment
manufacturers in the world.
— NetSol
provided LeaseSoft upgrades to BNP Paribas BV, the largest bank in the euro zone
by deposits, and UK-based Aldermore Bank.
Financial
Outlook for Fiscal Year 2011
The
Company reaffirms its previously stated guidance for its fiscal year 2011
financial results, projecting revenues of $40 million to $44 million and diluted
EPS of $0.15 to $0.20 for the fiscal year ending June 30, 2011.
Conference
Call and Webcast Information
NetSol
will host a conference call today, February 10, 2011, at 11:00 a.m. EST (8:00
a.m. Pacific) to review the Company’s quarterly financial and operational
performance. Najeeb Ghauri, Chairman and Chief Executive Officer of NetSol
Technologies, will host the call.
To
participate in the call please dial (877) 941-2068, or (480) 629-9712 for
international calls, approximately 10 minutes prior to the scheduled start time.
Interested parties can also listen via a live Internet webcast, which can be
found at the Company's website at http://www.netsoltech.com.
A replay
of the call will be available for two weeks from 2:00 p.m. EST on February 10,
2011 until 11:59 p.m. EST on February 24, 2011. The number for the replay is
(877) 870-5176, or (858) 384-5517 for international calls; the passcode for the
replay is 4407497. In addition, a recording of the call will be available via
the Company's website at http://www.netsoltech.com
for one year.
About
NetSol Technologies, Inc.
NetSol
Technologies, Inc. (NasdaqCM: NTWK) (Nasdaq Dubai: NTWK) is a worldwide provider
of global IT and enterprise application solutions. Since its inception in 1995,
NetSol has used its BestShoring™ practices and highly experienced resources in
analysis, development, quality assurance, and implementation to deliver
high-quality, cost-effective solutions. Specialized by industry, these product
and services offerings include credit and finance portfolio management systems,
SAP consulting and services, custom development, systems integration, and
technical services for the global Financial, Leasing, Insurance, Energy, and
Technology markets. NetSol’s commitment to quality is demonstrated by its
achievement of the ISO 9001, ISO 20000, ISO 27001, and SEI (Software Engineering
Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a
distinction shared by 178 companies worldwide. NetSol Technologies’ clients
include Fortune 500 manufacturers, global automakers, financial institutions,
utilities, technology providers, and government agencies. Headquartered in
Calabasas, California, NetSol Technologies has operations and offices in
Alameda, Adelaide, Bangkok, Beijing, Karachi, Lahore, London, and
Riyadh.
To learn
more about NetSol, visit www.netsoltech.com.
NetSol
Technologies, Inc. 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 "believe," "expect," "anticipate," "intend," 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.
NETSOL
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
|
As of December 31,
|
As of June 30,
|
|||||||
|
|
2010
|
2010
|
||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 5,856,152 | $ | 4,075,546 | ||||
|
Restricted
Cash
|
5,700,000 | 5,700,000 | ||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
15,059,935 | 12,280,331 | ||||||
|
Revenues
in excess of billings
|
11,001,000 | 9,477,278 | ||||||
|
Other
current assets
|
1,762,098 | 1,821,661 | ||||||
|
Total
current assets
|
39,379,185 | 33,354,816 | ||||||
|
Investment
under equity method
|
58,269 | 200,506 | ||||||
|
Property and equipment,
net of accumulated depreciation
|
10,950,969 | 9,472,917 | ||||||
|
Intangibles:
|
||||||||
|
Product
licenses, renewals, enhancements, copyrights, trademarks, and trade names,
net
|
21,320,814 | 19,002,081 | ||||||
|
Customer
lists, net
|
415,645 | 666,575 | ||||||
|
Goodwill
|
9,439,285 | 9,439,285 | ||||||
|
Total
intangibles
|
31,175,745 | 29,107,941 | ||||||
|
Total
assets
|
$ | 81,564,168 | $ | 72,136,180 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 4,752,181 | $ | 4,890,921 | ||||
|
Due
to officers
|
- | 10,911 | ||||||
|
Current
portion of loans and obligations under capitalized leases
|
6,509,412 | 7,285,773 | ||||||
|
Other
payables – acquisitions
|
103,226 | 103,226 | ||||||
|
Unearned
revenues
|
3,616,186 | 2,545,314 | ||||||
|
Deferred
liability
|
32,066 | 47,066 | ||||||
|
Convertible
notes payable , current portion
|
4,087,109 | 3,017,096 | ||||||
|
Loans
payable, bank
|
2,321,047 | 2,327,476 | ||||||
|
Common
stock to be issued
|
263,825 | 239,525 | ||||||
|
Total
current liabilities
|
21,685,053 | 20,467,308 | ||||||
|
Obligations under capitalized
leases, less current maturities
|
483,221 | 204,620 | ||||||
|
Convertible
notes payable less current maturities
|
- | 4,066,109 | ||||||
|
Long term loans; less
current maturities
|
580,262 | 727,336 | ||||||
|
Lease
abandonment liability; long term
|
867,583 | 867,583 | ||||||
|
Total
liabilities
|
23,616,118 | 26,332,956 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders'
equity:
|
||||||||
|
Common stock, $.001 par value;
95,000,000 shares authorized; 49,685,342 37,103,396 issued and
outstanding
|
49,686 | 37,104 | ||||||
|
Additional
paid-in-capital
|
93,244,355 | 86,002,648 | ||||||
|
Treasury
stock
|
(396,008 | ) | (396,008 | ) | ||||
|
Accumulated
deficit
|
(36,356,313 | ) | (39,859,030 | ) | ||||
|
Stock
subscription receivable
|
(2,105,960 | ) | (2,007,960 | ) | ||||
|
Other
comprehensive loss
|
(7,880,946 | ) | (8,396,086 | ) | ||||
|
Non-controlling
interest
|
11,393,236 | 10,422,557 | ||||||
|
Total
stockholders' equity
|
57,948,049 | 45,803,224 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 81,564,168 | $ | 72,136,180 | ||||
NETSOL
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENT OF OPERATIONS
|
For the Three Months
|
For the Six Months
|
|||||||||||||||
|
Ended December 31,
|
Ended December 31,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net
Revenues:
|
||||||||||||||||
|
License
fees
|
$ | 3,129,063 | $ | 3,318,936 | $ | 6,606,856 | $ | 5,870,529 | ||||||||
|
Maintenance
fees
|
2,023,509 | 1,780,336 | 3,693,428 | 3,588,053 | ||||||||||||
|
Services
|
5,272,675 | 4,420,535 | 8,528,035 | 7,683,299 | ||||||||||||
|
Total
revenues
|
10,425,247 | 9,519,808 | 18,828,319 | 17,141,881 | ||||||||||||
|
Cost
of revenues:
|
||||||||||||||||
|
Salaries
and consultants
|
2,127,280 | 2,005,845 | 4,114,168 | 4,019,598 | ||||||||||||
|
Travel
|
238,776 | 329,007 | 470,388 | 389,207 | ||||||||||||
|
Repairs
and maintenance
|
71,459 | 69,112 | 128,517 | 136,723 | ||||||||||||
|
Insurance
|
31,087 | 36,030 | 62,079 | 72,709 | ||||||||||||
|
Depreciation
and amortization
|
679,284 | 573,268 | 1,310,225 | 1,071,772 | ||||||||||||
|
Other
|
348,859 | 585,157 | 591,997 | 1,467,495 | ||||||||||||
|
Total
cost of revenues
|
3,496,745 | 3,598,418 | 6,677,374 | 7,157,503 | ||||||||||||
|
Gross
profit
|
6,928,503 | 5,921,390 | 12,150,945 | 9,984,378 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
Selling
and marketing
|
1,002,877 | 526,751 | 1,486,847 | 1,020,381 | ||||||||||||
|
Depreciation
and amortization
|
267,861 | 418,023 | 534,303 | 930,384 | ||||||||||||
|
Bad
debt expense
|
(353 | ) | 212,840 | 254,279 | 212,840 | |||||||||||
|
Salaries
and wages
|
736,898 | 743,970 | 1,657,162 | 1,468,665 | ||||||||||||
|
Professional
services, including non-cash compensation
|
151,276 | 210,795 | 290,361 | 306,901 | ||||||||||||
|
Lease
abandonment charges
|
- | 1,076,347 | - | 1,076,347 | ||||||||||||
|
General
and administrative
|
873,569 | 1,042,172 | 2,006,088 | 2,132,183 | ||||||||||||
|
Total
operating expenses
|
3,032,128 | 4,230,898 | 6,229,041 | 7,147,701 | ||||||||||||
|
Income
(loss) from operations
|
3,896,375 | 1,690,492 | 5,921,904 | 2,836,677 | ||||||||||||
|
Other
income and (expenses)
|
||||||||||||||||
|
Loss
on sale of assets
|
(792 | ) | (89,119 | ) | (15,586 | ) | (89,101 | ) | ||||||||
|
Interest
expense
|
(291,475 | ) | (372,273 | ) | (607,119 | ) | (840,887 | ) | ||||||||
|
Interest
income
|
9,958 | 33,752 | 94,419 | 151,562 | ||||||||||||
|
Gain
(loss) on foreign currency exchange transactions
|
(400,658 | ) | (3,247 | ) | 673,236 | 380,577 | ||||||||||
|
Share
of net loss from equity investment
|
(71,799 | ) | - | (142,236 | ) | - | ||||||||||
|
Beneficial
conversion feature
|
(118,163 | ) | (595,215 | ) | (295,574 | ) | (893,214 | ) | ||||||||
|
Other
income (expense)
|
(1,748 | ) | (50,825 | ) | (57,301 | ) | (81,975 | ) | ||||||||
|
Total
other income (expenses)
|
(874,677 | ) | (1,076,927 | ) | (350,162 | ) | (1,373,038 | ) | ||||||||
|
Net
income (loss) before non-controlling interest in subsidiary and income
taxes
|
3,021,698 | 613,565 | 5,571,742 | 1,463,639 | ||||||||||||
|
Income
taxes
|
(3,168 | ) | (32,526 | ) | (11,724 | ) | (37,543 | ) | ||||||||
|
Non-controlling
interest
|
(1,082,792 | ) | (1,028,917 | ) | (2,057,301 | ) | (2,137,892 | ) | ||||||||
|
Net
income (loss) attributable to NetSol
|
1,935,737 | (447,878 | ) | 3,502,718 | (711,796 | ) | ||||||||||
|
Other
comprehensive income (loss):
|
||||||||||||||||
|
Translation
adjustment
|
784,153 | (538,141 | ) | 515,139 | (854,005 | ) | ||||||||||
|
Comprehensive
income (loss)
|
$ | 2,719,890 | $ | (986,019 | ) | $ | 4,017,857 | $ | (1,565,801 | ) | ||||||
|
Net
income (loss) per share:
|
||||||||||||||||
|
Basic
|
$ | 0.04 | $ | (0.01 | ) | $ | 0.08 | $ | (0.02 | ) | ||||||
|
Diluted
|
$ | 0.04 | $ | (0.01 | ) | $ | 0.08 | $ | (0.02 | ) | ||||||
|
Weighted
average number of shares outstanding
|
||||||||||||||||
|
Basic
|
48,366,323 | 34,447,142 | 43,955,210 | 33,041,760 | ||||||||||||
|
Diluted
|
51,058,140 | 34,447,142 | 46,647,027 | 33,041,760 | ||||||||||||
NETSOL
TECHNOLOGIES, INC. AND SUBSIDIARIES
STATEMENTS
OF CASH FLOWS
|
For the Six Months
|
||||||||
|
Ended December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income (loss)
|
$ | 5,560,019 | $ | 1,426,096 | ||||
|
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and amortization
|
1,844,528 | 2,002,157 | ||||||
|
Provision
for bad debts
|
254,279 | 212,840 | ||||||
|
Loss
on foreign currency exchange transaction
|
- | 19,582 | ||||||
|
Share
of net loss from investment under equity method
|
142,236 | - | ||||||
|
Loss
on sale of assets
|
15,586 | 89,101 | ||||||
|
Stock
issued for notes payable and related interest
|
35,808 | 27,825 | ||||||
|
Stock
issued for services
|
577,943 | 300,329 | ||||||
|
Fair
market value of warrants and stock options granted
|
175,341 | 651,018 | ||||||
|
Beneficial
conversion feature
|
295,574 | 893,214 | ||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Increase/
decrease in accounts receivable
|
(1,863,668 | ) | 237,431 | |||||
|
Increase/
decrease in other current assets
|
(1,377,332 | ) | (1,632,327 | ) | ||||
|
Increase/
decrease in accounts payable and accrued expenses
|
(353,493 | ) | 147,556 | |||||
|
Net
cash provided by operating activities
|
5,306,822 | 4,374,821 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment
|
(2,450,222 | ) | (1,085,787 | ) | ||||
|
Sales
of property and equipment
|
19,988 | 227,773 | ||||||
|
Purchase
of non-controlling interest in subsidiary
|
(180,000 | ) | - | |||||
|
Short-term
investments held for sale
|
(256,706 | ) | - | |||||
|
Increase
in intangible assets
|
(3,127,234 | ) | (3,118,094 | ) | ||||
|
Net
cash used in investing activities
|
(5,994,175 | ) | (3,976,108 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from sale of common stock
|
2,566,750 | 514,539 | ||||||
|
Proceeds
from the exercise of stock options and warrants
|
667,300 | 33,750 | ||||||
|
Proceeds
from convertible notes payable
|
- | 2,000,000 | ||||||
|
Redemption
of preferred stock
|
- | (1,920,000 | ) | |||||
|
Dividend
Paid
|
- | (44,090 | ) | |||||
|
Bank
overdraft
|
(156,849 | ) | (221,382 | ) | ||||
|
Proceeds
from bank loans
|
2,588,773 | 2,727,657 | ||||||
|
Payments
on bank loans
|
(44,455 | ) | (352,887 | ) | ||||
|
Payments
on capital lease obligations & loans - net
|
(3,035,240 | ) | (2,183,189 | ) | ||||
|
Net
cash provided by financing activities
|
2,586,278 | 554,399 | ||||||
|
Effect
of exchange rate changes in cash
|
(118,318 | ) | (145,201 | ) | ||||
|
Net
increase in cash and cash equivalents
|
1,780,607 | 807,911 | ||||||
|
Cash
and cash equivalents, beginning of year
|
4,075,546 | 4,403,762 | ||||||
|
Cash
and cash equivalents, end of year
|
$ | 5,856,152 | $ | 5,211,674 | ||||
NETSOL
TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION
TO GAAP
|
Three Months
|
Three Months
|
Year
|
Year
|
|||||||||||||
|
Ended
|
Ended
|
To date
|
To date
|
|||||||||||||
|
December 31,
2010
|
December 31,
2009
|
December 31,
2010
|
December 31,
2009
|
|||||||||||||
|
Net
Income (loss) before preferred dividend, per GAAP
|
$ | 1,935,737 | $ | (447,878 | ) | $ | 3,502,718 | $ | (711,795 | ) | ||||||
|
Income
Taxes
|
3,168 | 32,526 | 11,724 | 37,543 | ||||||||||||
|
Depreciation
and amortization
|
947,145 | 991,291 | 1,844,528 | 2,002,156 | ||||||||||||
|
Interest
expense
|
291,475 | 372,273 | 607,119 | 840,887 | ||||||||||||
|
EBITDA
|
$ | 3,177,525 | $ | 948,211 | $ | 5,966,090 | $ | 2,168,792 | ||||||||
|
Weighted
Average number of shares outstanding
|
||||||||||||||||
|
Basic
|
48,366,323 | 34,447,142 | 43,955,210 | 33,041,760 | ||||||||||||
|
Diluted
|
51,058,140 | 35,833,351 | 46,647,027 | 34,427,969 | ||||||||||||
|
Basic
EBITDA
|
$ | 0.07 | $ | 0.03 | $ | 0.14 | $ | 0.07 | ||||||||
|
Diluted
EBITDA
|
$ | 0.06 | $ | 0.03 | $ | 0.13 | $ | 0.06 | ||||||||
###
Source :
NetSol Technologies, Inc.