PCCW investment in SOFN down 92.6% - SoftNet Systems, Inc. Reports Third Quarter Fiscal 2001 Results
Business Wire - Monday, August 06, 2001
Note: SOFN closed on 8-9-01 @US$1.90.
On 13-Oct-99 PCCW announced a subscription of 5m shares in Nasdaq-listed SoftNet Systems, Inc at US$25.75 per share, for a total of US$128.8m (HK$998m) in cash. The issue was done at market price, and the shares represented 22.5% of the enlarged issued share capital of the company.
As of the today's close, PCCW investment in SoftNet Systems is down 92.6% and worth [on paper] US$9.5m.
SAN FRANCISCO--(BUSINESS WIRE)--August 6, 2001--SoftNet Systems, Inc. (Nasdaq:SOFN), today announced that revenue from continuing operations for its third fiscal quarter ended June 30, 2001 was $0.8 million, compared to $6.0 million in the same quarter of the previous year. Net loss from continuing operations was $8.7 million, compared to a net loss of $7.7 million in the same quarter of the previous year. The net loss in the quarter, including discontinued operations, was $12.8 million, or $.51 per share, compared to a net loss of $26.0 million, or $1.02 per share, in the third quarter of fiscal 2000.
As of June 30, 2001, cash and short-term investments totaled approximately $78.0 million, compared to $172.1 million on September 30, 2000. This decrease was primarily caused by the discontinuance of ISP Channel, Aerzone, and corporate restructuring. These costs primarily included settlement of liabilities, severance and lease termination payments, offset by proceeds from the sale of assets.
"The company continues the process of reducing operations, expenditures and conserving cash, while pursuing other opportunities with the assistance of our investment bankers," said Edward A. Bennett, SoftNet's acting chairman. "Most of the major costs of discontinuing our operations have been paid, and we believe that our cash and short-term investments balance will be in the $70-75 million range at the end of the fiscal year on September 30, 2001. We are working to be in a position to announce a new direction for the company within the next several months."
About SoftNet Systems, Inc.
SoftNet's wholly owned Intellicom subsidiary combines Internet services with sophisticated two-way satellite technology to deliver a turnkey solution for ISPs, schools, corporations and businesses. Intellicom provides two-way satellite Internet access using a proprietary network optimizing technology. The company utilizes state-of-the-art wireless technologies, broadband delivery, data-push and satellite-based Internet access caching products to provide its customers with fast access to information and efficient utilization of existing network capacity. Intellicom operates more than 400 earth stations in the United States, Latin America and the Caribbean as well as a 24-hour-a-day, seven-day-a-week Network Operations Center, Internet Data Center and Customer Support Center. For more information about SoftNet Systems, Inc., please visit www.softnet.com.
This press release contains forward-looking statements concerning SoftNet Systems' anticipated future operating results, future revenues and earnings or adequacy of future cash flow. (These forward-looking statements include, but are not limited to, statements containing the words "hope", "expect", "believe", "will", "may", "should", "project", "estimate", "approximately" and like expressions, and the negative thereof.) These statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements, including the risks attendant to a growing business in a new industry as well as those risks described in SoftNet Systems' Quarterly and Annual Reports.
SOFTNET SYSTEMS, INC AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2001 2000 2001 2000
-------- -------- -------- --------
Net sales $ 811 $ 5,972 $ 3,211 $ 6,644
Cost of sales 1,406 5,350 7,995 6,991
-------- -------- -------- --------
Gross profit
(loss) (595) 622 (4,784) (347)
-------- -------- -------- --------
Operating expenses:
Selling and
marketing 304 1,329 2,148 3,686
Engineering 854 1,531 3,710 2,810
General and
administrative 2,374 3,728 8,748 9,468
Depreciation 286 263 975 662
Amortization -- 575 1,149 1,723
Non-cash
compensation expense
(benefit) related to
stock options 478 3,963 (1,026) 13,017
Provision for
impaired assets 3,684 -- 28,553 --
Restructuring expense 1,290 -- 5,190 --
-------- -------- -------- --------
Total operating expenses 9,270 11,389 49,447 31,366
-------- -------- -------- --------
Loss from
continuing operations
before other income
(expense), income
taxes, discontinued
operations
and extraordinary item (9,865) (10,767) (54,231) (31,713)
Other income (expense):
Interest income 1,230 3,324 5,525 8,887
Interest expense (4) (108) (89) (425)
Equity in net
losses of
investee companies -- (191) (394) (191)
Miscellaneous
(expense), net (42) (1) (207) (36)
-------- -------- -------- --------
Loss from continuing
operations before
income taxes,
discontinued operations
and extraordinary item (8,681) (7,743) (49,396) (23,478)
Provision for
income taxes -- -- -- --
-------- -------- -------- --------
Loss from continuing
operations before
extraordinary item (8,681) (7,743) (49,396) (23,478)
Loss from discontinued
operations, net of tax -- (18,247) -- (45,248)
Loss on disposition
of discontinued
operations,
net of tax (4,100) -- (6,828) --
Extraordinary item -
gain on settlement
of outstanding
obligations,
net of tax -- -- 1,326 --
-------- -------- -------- --------
Net loss $ (12,781)$ (25,990) $ (54,898) $ (68,726)
======== ======== ======== ========
Basic and diluted per
common share:
Loss from
continuing
operations $ (0.35) $ (0.30) $ (1.98) $ (1.03)
Discontinued
operations $ (0.16) $ (0.72) $ (0.27) $ (1.99)
Extraordinary item -- -- 0.05 --
-------- -------- -------- --------
Net loss $ (0.51) $ (1.02) $ (2.20) $ (3.02)
======== ======== ======== ========
Shares used to compute
basic and
diluted per
common share 25,157 25,368 24,974 22,742
======== ======== ======== ========
SOFTNET SYSTEMS, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, September 30,
2001 2000
--------- ---------
ASSETS
Current assets:
Cash and cash
equivalents $ 11,999 $ 44,731
Short-term
investments,
available for sale 65,974 127,403
Accounts receivable, net 2,258 2,558
Notes receivable 1,000 2,100
Inventory, net 1,583 4,128
Other current assets 1,414 1,272
--------- ---------
Total current assets 84,228 182,192
Restricted cash 1,439 1,492
Property and
equipment, net 3,869 4,679
Intangibles, net -- 12,257
Accounts receivable,
non-current portion 2,061 3,409
Long-term equity investments 1,484 7,734
Other assets 244 543
--------- ---------
$ 93,325 $ 212,306
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 366 $ 3,530
Net liabilities
associated
with discontinued
operations 7,884 56,595
Other accrued expenses 4,319 6,002
Current portion of
long-term debt 161 2,161
--------- ---------
Total current liabilities 12,730 68,288
Long-term debt,
net of current portion 1,444 2,104
Business acquisition
liability -- 2,000
--------- ---------
Total liabilities 14,174 72,392
--------- ---------
Commitments and contingencies
Stockholders' equity:
Common stock 275 264
Additional-paid-in
capital 480,255 503,802
Deferred stock
compensation (4,296) (28,577)
Accumulated other
comprehensive loss (448) (696)
Accumulated deficit (387,498) (332,600)
Treasury stock, at cost (9,137) (2,279)
--------- ---------
Total stockholders' equity 79,151 139,914
--------- ---------
$ 93,325 $ 212,306
========= =========
CONTACT: SoftNet Systems, Inc
Nicole Noutsios, 415/365-2325
investors@softnet com
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