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I/NET Reports Sharply Higher Fourth-Quarter Earnings
Net income rises 127% on increased e-commerce revenues
KALAMAZOO, Mich., Feb. 8 /PRNewswire/ -- I/NET, Inc. (OTC Bulletin Board: INNI) today announced its 12th consecutive quarter of profitability, highlighted by continued growth in e-commerce consulting revenues and improved operating efficiency.
The Kalamazoo, Mich.-based software and solutions provider for the mid- range computing market said net earnings more than doubled to $107,204 on net revenues of $411,007 in the fourth quarter ended Dec. 31, 1999, compared with net earnings of $47,273 on net revenues of $424,523 in the same period of 1998. The figures represent a 127 percent increase in net earnings compared with the prior-year fourth quarter.
Gross profit rose 40 percent versus the year-ago fourth quarter, reflecting increased e-commerce consulting revenues and decreasing costs associated with production of these revenues. Earnings from operations grew 88 percent compared with the fourth quarter last year, reflecting improved margins and continued cost management efforts by the Company.
For the full year ended Dec. 31, 1999, I/NET reported net earnings of $354,520, or $0.01 per share, on net revenues of $1,792,881, compared with net earnings of $287,896, or $0.01 per share, on net revenues of $1,768,379 in the same period last year. Net earnings grew 23 percent compared to last year, reflecting improved margins and lower interest costs.
"I am pleased with our performance, particularly the strong results we posted in the fourth quarter," I/NET President and Chief Executive Officer Stephen J. Markee said. "As expected, we showed steady growth in e-commerce consulting revenues, which increased 33 percent over the third quarter, reflecting our heightened focus on this emerging opportunity. We are determined to build on our expertise in Internet security and create e-business solutions for IBM AS/400 users, which represent an attractive niche for our consulting and software businesses."
Markee continued: "Sales of our software products for the mid-range computing market were soft in the fourth quarter, as some chief information officers delayed purchases in anticipation of Y2K issues at their companies. With the millennium issue behind us, our software sales are off to a strong start in 2000, particularly in Japan and Europe."
I/NET said sales of its software products for the AS/400 market have almost doubled in January 2000 versus the year-ago period. The Company attributed the strength primarily to sales of its web-enabling software products, several of which were upgraded in late 1999, as well as its new distributor relationship with General Business Services Co., Ltd., which last fall began selling I/NET software in Japan.
In recent weeks, I/NET has also begun to activate new users of its new Net Print/400 software, a server-based package that allows AS/400 users to view, download and print files at workstations over intranets, extranets and the Internet. A 30-day trial version of Net Print/400 can be downloaded from the I/NET website (www.inetmi.com ).
"Net Print/400 has been well-received by our customer base, and has re- energized sales of our Webulator, Commerce Server and Merchant web-enabling software," Markee said. "Our products continue to win accolades and interest among the trade media, AS/400 users and potential distributors of our products."
Last week, I/NET attended Partner World 2000, a gathering of approximately 3,000 distributors who sell IBM hardware and software. I/NET's Merchant/400 software recently earned a "Powered by AS/400e Award" from IBM for the second half of 1999. The awards are given to solutions developers who have demonstrated an ongoing commitment to creating new business opportunities for IBM AS/400 users. Merchant/400 is an I/NET software program that provides back-end functionality for processing credit card payments in real-time over the Internet.
The Company also reported on its involvement in the Cayman Islands-based SEGOES project, which represents the first and only Internet-based securities trading system designed for the offshore market. I/NET Founder and Chairman James C. Knapp said: "Though SEGOES continues to grow, it did not contribute to revenues in the fourth quarter, as previously anticipated. We have been negotiating to increase our participation in SEGOES in the coming year in order to accelerate the ramp-up of this unique offshore trading system. While we expect SEGOES will contribute to revenues in the coming year, we are confident that our equity stake in this offshore trading system represents significant long-term value for all shareholders."
Established in 1982 as a contract software development firm, I/NET has been a pioneer in the areas of digital imaging, voice recognition and multimedia. The Company currently develops Internet computer systems and software for the IBM AS/400 midrange computers. The Company also provides web site consulting as well as services to deliver secure financial transactions over the Internet.
This news release contains forward-looking statements that are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, and actual results may differ substantially from these statements. For a more complete disclosure of these risk factors, please refer to our quarterly Form 10-Q and Form 10-K filings with the Securities and Exchange Commission.
I/NET, INC.
Consolidated Statements of Earnings
Quarter Ended
12/31/99 12/31/98
Revenues $411,007 $424,523
Cost of revenues $162,399 $246,866
Gross profit $248,608 $177,657
Selling, general & administrative $129,659 $114,473
Earnings from operations $118,949 $63,184
Interest expense $11,745 $15,911
Net earnings $107,204 $47,273
Earnings per share $0.00 $0.00
Weighted average shares outstanding 31,037,652 31,037,652
Year Ended,
12/31/99 12/31/98
Revenues $1,792,881 $1,768,379
Cost of revenues $797,587 $899,606
Gross profit $995,294 $868,773
Selling, general & administrative $588,474 $506,270
Earnings from operations $406,820 $362,503
Interest expense $52,300 $74,607
Net earnings $354,520 $287,896
Earnings per share $0.01 $0.01
Weighted average shares outstanding 31,037,652 31,037,652
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SOURCE: I/NET, Inc.
CONTACT: Stephen J. Markee of I/NET, Inc., 616-344-3017, ext. 104, smarkee@inetmi.com; or Brian Edwards or Jeff Lambert of Lambert, Edwards & Associates, Inc., 616-233-0500, mail@lambert-edwards.com, for I/NET, Inc.
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