PacificNet.com Reports Results For Fiscal Year 2000

Revenue Increases $4.6 million over 1999, 4th Quarter Revenues Increase 11%

Sequentially



Apr 02, 2001, 01:00 ET from PacificNet.com, Inc.

    HONG KONG, April 2 /PRNewswire/ -- PacificNet.com, Inc. (Nasdaq:   PACT), a
 leading Asian IT Solutions and consulting company, today reported results for
 the year and the quarter ended December 31, 2000.
 
     Year ended - December 31, 2000
     For the year ended December 31, 2000, revenues were $4.7 million compared
 with $49,000 for the period ended December 31, 1999.  The net loss from
 continuing operations for the year ended December 31, 2000 was $(2.2) million
 or $(.33) per share which compares with last year's loss of $(174,000) or
 $(.05) per share.  Including the loss from discontinued operations of $(2.24)
 per share and provision for impairment on investments in affiliated companies
 of $(.33), the Company's net loss was $(2.85) per share for the year ended
 December 31, 2000 compared with a net loss of $(.11) per share in the
 corresponding period a year ago.
     Discontinued operations consisted of the Creative Master die-cast
 manufacturing business, which was acquired by PacificNet in July 2000.
 Purchase accounting rules required the Company to record $8.3 million in
 goodwill associated with this acquisition, which was written off in the third
 quarter as the Creative Master business was sold in a previously-announced
 transaction completed on October 2, 2000.
 
     Quarter ended - December 31, 2000
     Revenues for the fourth quarter were $1.8 million, up 11% sequentially
 when compared with the third quarter of 2000.  The net loss from continuing
 operations for the fourth quarter was $(1.7) million or $(.22) per share which
 compares with last year's fourth quarter net loss of $(140,000) or $(.04) per
 share.  Including the provision for impairment on investments in affiliated
 companies of $(.29) per share, the Company's net loss was $(.50) per share for
 the quarter ended December 31, 2000 compared with a net loss of $(.06) per
 share in the corresponding period a year ago.
     The provision for impairment on investments consisted primarily of $(2.3)
 million related to the Company's investment in shares of APP China common
 stock that the Company received in exchange for 301,736 shares of common stock
 of the Company.  In addition, the Company adopted Staff Accounting Bulletin
 (SAB) 101 "Revenue Recognition in Financial Statements" in the year ended
 December 31, 2000 which resulted in a reduction in revenues recorded by the
 Company of $400,000 in the quarter and the year ended December 31, 2000.
     Tony Tong, CEO of PacificNet.com, stated, ``We are very pleased to report
 a sequential revenue increase in the quarter and we are well-positioned to
 leverage our leadership position and our strong strategic alliances to
 generate profitability and create shareholder value.   We are extremely proud
 of the following accomplishments made since July, 2000 that provide the
 Company with momentum going into fiscal 2001:
 
     * Disposition of business segments that allow PacificNet to focus on its
       core competency of providing integrated e-Business Solutions.
 
     * The establishment of product and distribution channel relationships with
       leading worldwide technology partners including IBM, Sun Microsystems,
       HKNet, AsiaOnline, and China's Ministry of Foreign Trade and Economic
       Cooperation (MOFTEC).
 
     * The creation of three business units (B2B/B2C Application Solutions,
       Customer Care, and Strategic e-Infrastructure) that are currently
       positioned to provide the only end-to-end integrated e-Business
       solutions in Asia.
 
     * The delivery of world-class solutions to customers including Sony
       Corporation, Hong Kong Productivity Council, ChinaChem, Compucon,
       ChinaINFOBANK, China Youth Online (CYOL), and InteriorSearch.com.
 
     * The use of measures to rationalize the performance of existing business
       units and justify resource levels.  Since December 31, 2000, the Company
       has continued this rationalization and reduced its Hong Kong work force
       by an additional 25%.
 
     * As of December 31, we have a current cash position of $4.2 million that
       is adequate to finance planned growth and strategic investments over the
       coming year.  Since December 31, 2000, the Company has further reduced
       its monthly cash burn rate to less than $250,000."
 
     Business Outlook
     For the full year 2001, PacificNet expects revenues to be
 $7.8-$8.2 million.  In the first quarter of 2001, PacificNet expects revenues
 between $1.7 and $2.0 million, which reflects a continuation of current
 general economic conditions.
     For the full year 2001, PacificNet expects EBITDA margins to be between 0%
 percent and 1% percent.  Based on these assumptions and its strategic growth
 initiatives, the company expects a loss per share of ($0.03) to ($0.07) for
 the full year 2001. Loss per share for the first quarter 2001 is expected to
 be in the range of ($.06) to ($.10).
     These figures do not include the consolidated results of the pending
 acquisition of Lawsons, which was announced on February 16, 2001.  In the
 event that PacificNet makes additional acquisitions of companies during 2001,
 among other factors, expected amortization charges and the effect on the
 expected loss per share could change significantly.
     These business outlook statements are based on current expectations as of
 today only.  Due to economic and market variables, among other factors, actual
 results could be above or below the stated outlook.  PacificNet makes these
 statements as of today and undertakes no obligation to update these
 statements.  It is currently expected that these business outlook statements
 will not be updated until the release of PacificNet's next quarterly earnings
 announcement.
     The company reserves the right to update the outlook for any reason during
 the quarter, including the occurrence of material events.
     All references to earnings per share set forth in this press release are
 diluted earnings per share as defined within Statement of Financial Accounting
 Standards No. 128.
 
     About PacificNet.com
     PacificNet.com is an Asian IT solutions and consulting company that
 develops and implements full-service IT solutions.  PacificNet.com has
 developed a suite of e-business software applications, and offers services
 such as hardware support, CRM, ERP, logistics and supply chain management.
 PacificNet.com is headquartered in Hong Kong SAR, with offices in the United
 States, Malaysia, and China. For more information, see
 http://www.PacificNet.com
 
     Forward Looking Statements
     Statements in this press release that are not historical facts, including
 those statements that refer to PacificNet's plans, prospects, expectations,
 financial projections, strategies, intentions, and beliefs, are forward-
 looking statements.  These forward-looking statements are based on information
 available to PacificNet today, and PacificNet assumes no obligation to update
 these statements as circumstances change.  There are risks and uncertainties
 that could cause actual results to differ materially from the forward-looking
 statements, including, without limitation, risks that could cause the closing
 of the proposed acquisitions to be delayed or not to occur, market acceptance
 of e-business solutions and other risk factors that are described in more
 details in PacificNet's filings with the Securities and Exchange Commission.
 
                     PACIFICNET.COM, INC. AND SUBSIDIARIES
 
                     Consolidated Statements of Operations
       (In thousands of United States dollars, except per share amounts)
 
                           Three Months Ended Dec. 31       Year Ended Dec. 31
                              2000         1999              2000       1999
                           (unaudited)  (unaudited)
 
     Revenues:
     Services Rendered        $160          $47            $1,849        $49
     Sales of Products
      and Systems            1,635            0             2,850          0
                             1,795           47             4,699         49
 
     Cost of Revenues:
     Services Rendered         390           19               855         31
     Sales of Products
      and Systems            1,503            0             2,623          0
                             1,893           19             3,478         31
     Gross Margin              (98)          28             1,221         18
     Selling, general
      and administrative
       expenses              1,618          168             3,470        192
     Loss from Operations   (1,716)        (140)           (2,249)      (174)
     Share of losses of
      Affiliated Companies     (10)           0               (35)         0
     Provision for
      impairment of Affiliated
       Companies            (2,300)           0            (2,300)         0
     Interest Income           106           28               367         28
 
     Loss before income taxes,
      minority interests
       and discontinued
        operations          (3,920)        (112)           (4,217)      (146)
     Provision for income
      taxes                      0            0                 0          0
     Minority Interest          15            0                 8          0
     Loss before discontinued
      operations            (3,905)        (112)           (4,209)      (146)
 
     Creative Master business:
      Loss on disposition        0            0           (12,952)         0
      Net loss from operations   0            0              (489)         0
 
     International Trading
      business                   0         (109)           (2,013)      (237)
 
     Net Loss              ($3,905)       ($221)         ($19,663)     ($383)
 
 
     Per basic and diluted common share:
     Net loss from continuing
      operations            ($0.22)      ($0.04)           ($0.33)    ($0.05)
     Net loss before
      discontinued
       operations           ($0.50)      ($0.03)           ($0.61)    ($0.04)
     Net loss from
      discontinued
       operations            $0.00       ($0.03)           ($2.24)    ($0.07)
     Net loss               ($0.50)      ($0.06)           ($2.85)    ($0.11)
 
     Average number of
      shares outstanding     7,838        3,414             6,898      3,414
 
 
 
                     PACIFICNET.COM, INC. AND SUBSIDIARIES
 
                          Consolidated Balance Sheets
                    (In thousands of United States dollars)
 
 
 
                                                  December 31,   December 31,
                                                         2000           1999
                                     ASSETS
 
     Current Assets:
     Cash                                              $4,197         $4,061
     Trade Receivable, net                                344             34
     Inventories, net                                     365              0
     Other Current Assets                                 404             60
     Total Current Assets                               5,310          4,155
 
     Property and Equipment, net                          692            109
     Capitalized Software Development Costs               302              0
     Investments in Affiliated Companies                1,241              0
     Goodwill                                              89              0
 
     Total Assets                                      $7,634         $4,264
 
 
            LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
     Accounts Payable                                    $331            $86
 
     Accrued Expenses                                     185            156
     Net Liabilities of Discontinued Operations           438              0
     Total Current Liabilities                            954            242
 
     Minority Interest in
     Consolidated Subsidiary                              179              0
 
     Stockholders' Equity:
     Common Stock, par value $0.0001:
      Authorized - 125,000,000 shares
      Outstanding - 7,937,342 shares                        1              1
 
     Additional Paid-In Capital                        26,560          4,403
     Cumulative Other Comprehensive
      (Loss)/ Income                                      (14)             1
 
     Accumulated Deficit                              (20,046)           383
     Total Stockholders' Equity                         6,501          4,022
 
     Total Liabilities, Minority
     Interest and Stockholders' Equity                 $7,634         $4,264
 
 
 

SOURCE PacificNet.com, Inc.
    HONG KONG, April 2 /PRNewswire/ -- PacificNet.com, Inc. (Nasdaq:   PACT), a
 leading Asian IT Solutions and consulting company, today reported results for
 the year and the quarter ended December 31, 2000.
 
     Year ended - December 31, 2000
     For the year ended December 31, 2000, revenues were $4.7 million compared
 with $49,000 for the period ended December 31, 1999.  The net loss from
 continuing operations for the year ended December 31, 2000 was $(2.2) million
 or $(.33) per share which compares with last year's loss of $(174,000) or
 $(.05) per share.  Including the loss from discontinued operations of $(2.24)
 per share and provision for impairment on investments in affiliated companies
 of $(.33), the Company's net loss was $(2.85) per share for the year ended
 December 31, 2000 compared with a net loss of $(.11) per share in the
 corresponding period a year ago.
     Discontinued operations consisted of the Creative Master die-cast
 manufacturing business, which was acquired by PacificNet in July 2000.
 Purchase accounting rules required the Company to record $8.3 million in
 goodwill associated with this acquisition, which was written off in the third
 quarter as the Creative Master business was sold in a previously-announced
 transaction completed on October 2, 2000.
 
     Quarter ended - December 31, 2000
     Revenues for the fourth quarter were $1.8 million, up 11% sequentially
 when compared with the third quarter of 2000.  The net loss from continuing
 operations for the fourth quarter was $(1.7) million or $(.22) per share which
 compares with last year's fourth quarter net loss of $(140,000) or $(.04) per
 share.  Including the provision for impairment on investments in affiliated
 companies of $(.29) per share, the Company's net loss was $(.50) per share for
 the quarter ended December 31, 2000 compared with a net loss of $(.06) per
 share in the corresponding period a year ago.
     The provision for impairment on investments consisted primarily of $(2.3)
 million related to the Company's investment in shares of APP China common
 stock that the Company received in exchange for 301,736 shares of common stock
 of the Company.  In addition, the Company adopted Staff Accounting Bulletin
 (SAB) 101 "Revenue Recognition in Financial Statements" in the year ended
 December 31, 2000 which resulted in a reduction in revenues recorded by the
 Company of $400,000 in the quarter and the year ended December 31, 2000.
     Tony Tong, CEO of PacificNet.com, stated, ``We are very pleased to report
 a sequential revenue increase in the quarter and we are well-positioned to
 leverage our leadership position and our strong strategic alliances to
 generate profitability and create shareholder value.   We are extremely proud
 of the following accomplishments made since July, 2000 that provide the
 Company with momentum going into fiscal 2001:
 
     * Disposition of business segments that allow PacificNet to focus on its
       core competency of providing integrated e-Business Solutions.
 
     * The establishment of product and distribution channel relationships with
       leading worldwide technology partners including IBM, Sun Microsystems,
       HKNet, AsiaOnline, and China's Ministry of Foreign Trade and Economic
       Cooperation (MOFTEC).
 
     * The creation of three business units (B2B/B2C Application Solutions,
       Customer Care, and Strategic e-Infrastructure) that are currently
       positioned to provide the only end-to-end integrated e-Business
       solutions in Asia.
 
     * The delivery of world-class solutions to customers including Sony
       Corporation, Hong Kong Productivity Council, ChinaChem, Compucon,
       ChinaINFOBANK, China Youth Online (CYOL), and InteriorSearch.com.
 
     * The use of measures to rationalize the performance of existing business
       units and justify resource levels.  Since December 31, 2000, the Company
       has continued this rationalization and reduced its Hong Kong work force
       by an additional 25%.
 
     * As of December 31, we have a current cash position of $4.2 million that
       is adequate to finance planned growth and strategic investments over the
       coming year.  Since December 31, 2000, the Company has further reduced
       its monthly cash burn rate to less than $250,000."
 
     Business Outlook
     For the full year 2001, PacificNet expects revenues to be
 $7.8-$8.2 million.  In the first quarter of 2001, PacificNet expects revenues
 between $1.7 and $2.0 million, which reflects a continuation of current
 general economic conditions.
     For the full year 2001, PacificNet expects EBITDA margins to be between 0%
 percent and 1% percent.  Based on these assumptions and its strategic growth
 initiatives, the company expects a loss per share of ($0.03) to ($0.07) for
 the full year 2001. Loss per share for the first quarter 2001 is expected to
 be in the range of ($.06) to ($.10).
     These figures do not include the consolidated results of the pending
 acquisition of Lawsons, which was announced on February 16, 2001.  In the
 event that PacificNet makes additional acquisitions of companies during 2001,
 among other factors, expected amortization charges and the effect on the
 expected loss per share could change significantly.
     These business outlook statements are based on current expectations as of
 today only.  Due to economic and market variables, among other factors, actual
 results could be above or below the stated outlook.  PacificNet makes these
 statements as of today and undertakes no obligation to update these
 statements.  It is currently expected that these business outlook statements
 will not be updated until the release of PacificNet's next quarterly earnings
 announcement.
     The company reserves the right to update the outlook for any reason during
 the quarter, including the occurrence of material events.
     All references to earnings per share set forth in this press release are
 diluted earnings per share as defined within Statement of Financial Accounting
 Standards No. 128.
 
     About PacificNet.com
     PacificNet.com is an Asian IT solutions and consulting company that
 develops and implements full-service IT solutions.  PacificNet.com has
 developed a suite of e-business software applications, and offers services
 such as hardware support, CRM, ERP, logistics and supply chain management.
 PacificNet.com is headquartered in Hong Kong SAR, with offices in the United
 States, Malaysia, and China. For more information, see
 http://www.PacificNet.com
 
     Forward Looking Statements
     Statements in this press release that are not historical facts, including
 those statements that refer to PacificNet's plans, prospects, expectations,
 financial projections, strategies, intentions, and beliefs, are forward-
 looking statements.  These forward-looking statements are based on information
 available to PacificNet today, and PacificNet assumes no obligation to update
 these statements as circumstances change.  There are risks and uncertainties
 that could cause actual results to differ materially from the forward-looking
 statements, including, without limitation, risks that could cause the closing
 of the proposed acquisitions to be delayed or not to occur, market acceptance
 of e-business solutions and other risk factors that are described in more
 details in PacificNet's filings with the Securities and Exchange Commission.
 
                     PACIFICNET.COM, INC. AND SUBSIDIARIES
 
                     Consolidated Statements of Operations
       (In thousands of United States dollars, except per share amounts)
 
                           Three Months Ended Dec. 31       Year Ended Dec. 31
                              2000         1999              2000       1999
                           (unaudited)  (unaudited)
 
     Revenues:
     Services Rendered        $160          $47            $1,849        $49
     Sales of Products
      and Systems            1,635            0             2,850          0
                             1,795           47             4,699         49
 
     Cost of Revenues:
     Services Rendered         390           19               855         31
     Sales of Products
      and Systems            1,503            0             2,623          0
                             1,893           19             3,478         31
     Gross Margin              (98)          28             1,221         18
     Selling, general
      and administrative
       expenses              1,618          168             3,470        192
     Loss from Operations   (1,716)        (140)           (2,249)      (174)
     Share of losses of
      Affiliated Companies     (10)           0               (35)         0
     Provision for
      impairment of Affiliated
       Companies            (2,300)           0            (2,300)         0
     Interest Income           106           28               367         28
 
     Loss before income taxes,
      minority interests
       and discontinued
        operations          (3,920)        (112)           (4,217)      (146)
     Provision for income
      taxes                      0            0                 0          0
     Minority Interest          15            0                 8          0
     Loss before discontinued
      operations            (3,905)        (112)           (4,209)      (146)
 
     Creative Master business:
      Loss on disposition        0            0           (12,952)         0
      Net loss from operations   0            0              (489)         0
 
     International Trading
      business                   0         (109)           (2,013)      (237)
 
     Net Loss              ($3,905)       ($221)         ($19,663)     ($383)
 
 
     Per basic and diluted common share:
     Net loss from continuing
      operations            ($0.22)      ($0.04)           ($0.33)    ($0.05)
     Net loss before
      discontinued
       operations           ($0.50)      ($0.03)           ($0.61)    ($0.04)
     Net loss from
      discontinued
       operations            $0.00       ($0.03)           ($2.24)    ($0.07)
     Net loss               ($0.50)      ($0.06)           ($2.85)    ($0.11)
 
     Average number of
      shares outstanding     7,838        3,414             6,898      3,414
 
 
 
                     PACIFICNET.COM, INC. AND SUBSIDIARIES
 
                          Consolidated Balance Sheets
                    (In thousands of United States dollars)
 
 
 
                                                  December 31,   December 31,
                                                         2000           1999
                                     ASSETS
 
     Current Assets:
     Cash                                              $4,197         $4,061
     Trade Receivable, net                                344             34
     Inventories, net                                     365              0
     Other Current Assets                                 404             60
     Total Current Assets                               5,310          4,155
 
     Property and Equipment, net                          692            109
     Capitalized Software Development Costs               302              0
     Investments in Affiliated Companies                1,241              0
     Goodwill                                              89              0
 
     Total Assets                                      $7,634         $4,264
 
 
            LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
     Accounts Payable                                    $331            $86
 
     Accrued Expenses                                     185            156
     Net Liabilities of Discontinued Operations           438              0
     Total Current Liabilities                            954            242
 
     Minority Interest in
     Consolidated Subsidiary                              179              0
 
     Stockholders' Equity:
     Common Stock, par value $0.0001:
      Authorized - 125,000,000 shares
      Outstanding - 7,937,342 shares                        1              1
 
     Additional Paid-In Capital                        26,560          4,403
     Cumulative Other Comprehensive
      (Loss)/ Income                                      (14)             1
 
     Accumulated Deficit                              (20,046)           383
     Total Stockholders' Equity                         6,501          4,022
 
     Total Liabilities, Minority
     Interest and Stockholders' Equity                 $7,634         $4,264
 
 
 SOURCE  PacificNet.com, Inc.