DSTR news, more financials:
(BSNS WIRE) DualStar Reports Third Quarter Operating Results; Acquires Para
DualStar Reports Third Quarter Operating Results; Acquires ParaComm, a Private
Cable TV Operator Serving Florida, Texas & Colorado
Business Editors
NEW YORK--(BUSINESS WIRE)--May 17, 2000--DualStar Technologies
Corporation (Nasdaq: DSTR) announced operating results for the third
quarter of fiscal year 2000, which ended March 31, 2000. In addition,
DualStar announced the acquisition of ParaComm, Inc., a private cable
operator providing video entertainment services to approximately 2,700
subscribers and passing approximately 18,000 multi-dwelling units,
primarily in Florida, Texas and Colorado. The total purchase price
consideration consisted of 775,000 shares of DualStar common stock and
warrants to purchase an aggregate of 25,000 shares of DualStar common
stock at an exercise price of $15.00 per share.
DualStar continues to shift its focus from construction-related
businesses to becoming principally an access provider of broadband
telecommunications services to residential and commercial properties.
Due to the proposed sale of DualStar's electrical and HVAC contracting
subsidiaries, the electrical and HVAC contracting operations are
treated as discontinued operations for all periods discussed.
Accordingly, they are not included in continuing operations. Revenues
from continuing operations decreased 43.2% in the three months ended
March 31, 2000 to $0.8 million, down $0.6 million from the comparable
period in 1999. Revenues from continuing operations decreased 23.9% in
the nine months ended March 31, 2000 to $3.7 million, down $1.2
million from the comparable period in 1999. The decreases in revenues
were attributable primarily to DualStar's decision to close out a
small electrical contracting subsidiary at the beginning of the
current fiscal year, and to a $0.2 million adjustment to the accounts
receivable of DualStar's telecommunications business.
For the three months ended March 31, 2000, DualStar's continuing
operations had a gross loss of ($0.3) million and a gross loss margin
of (31.8%) compared to a gross profit of $0.3 million and a gross
profit margin of 21.6% for the three months ended March 31, 1999. For
the nine months ended March 31, 2000, gross profit decreased $1.1
million to $0.1 million from the comparable period in 1999. The gross
profit margins were 3.8% and 26.3% for the nine months ended March 31,
2000 and 1999, respectively. These results were attributable primarily
to the decrease in revenues and increases in fixed costs, such as
depreciation and amortization, and in direct labor costs.
As part of its plan to expand its telecommunications services
business, DualStar increased its general and administrative expenses
by $1.9 million in the three months ended March 31, 2000 to $2.5
million from the comparable period in 1999. General and administrative
expenses increased $2.6 million in the nine months ended March 31,
2000 to $4.5 million from the comparable period in 1999. The increases
in these expenses were primarily due to charges related to stock
options granted to certain employees hired in March 2000 and to
increases in professional fees, payroll costs and interest expense.
DualStar reported a net loss of $6,241,000 for the nine-month
period ended March 31, 2000, compared with net income of $848,000 for
the same period last year.
ParaComm Acquisition
DualStar also announced that, with the consent of Blackacre
Capital Management, L.L.C. obtained in connection with the proposed
$46.2 million investment by Blackacre and its affiliates, it has
acquired ParaComm, Inc., pursuant to an agreement and plan of merger
dated and effective as of May 11, 2000. DualStar issued an aggregate
of 775,000 shares of DualStar common stock and warrants to purchase an
aggregate of 25,000 shares of DualStar common stock as purchase price
consideration for ParaComm, which is now a wholly owned subsidiary of
DualStar. The warrants are exercisable at $15.00 per share and expire
five years after issuance.ParaComm is a private cable operator
providing video and communications products and services to
multi-dwelling unit communities primarily in Texas, Florida and
Colorado. Based in Clermont, Florida, ParaComm provides digital and
analog video services and direct broadcast satellite programming
packages to approximately 2,700 subscribers and passes approximately
18,000 units.About DualStar
DualStar Technologies Corp., through its subsidiaries, designs and
installs infrastructure systems and provides services that control and
enhance the environment in buildings. These systems and services
include: enhanced local, regional and long distance telephony as a
Competitive Local Exchange Carrier (CLEC); direct broadcast satellite
(DBS) and cable television as a System Operator; high-speed Internet
access as an Internet Service Provider (ISP); building and energy
management (BMS); heating, ventilation and air conditioning (HVAC);
electrical; and security and safety. DualStar created and owns many
innovative trademarked concepts, including the CyberBuilding(R),
CyberCierge(R), Building Area Network(R) (BAN), Home Area Network
(HAN), Community Area Network (CAN), InfoStructure, InfoStructors,
CyberView(R), CyberBuilders(R), DualStar(R), DualStar
Communications(R) and DualStar Technologies(R). For more information,
visit the company's web site at dualstar.com, e-mail
info@dualstar.com, or call (718) 340-6655. DualStar's common stock is
traded on The Nasdaq National Market under the symbol DSTR.
This press release and the materials referred to hereby contain
forward-looking statements regarding DualStar's business and future
plans of operations. When used herein, the words "intends," "expects,"
"plans," "estimates," "projects," "believes," "anticipates,"
"contemplates," "represents" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
involve known and unknown risks and uncertainties. These and other
important factors, including those set forth in DualStar's Annual and
Quarterly Reports on Form 10-K and Form 10-Q (available to the public
at www.sec.gov), may cause the actual results and performance to
differ materially from the future results expressed in or implied by
such forward-looking statements. The forward-looking statements
contained in this press release speak only as of the date hereof and
DualStar disclaims any obligation to provide public updates, revisions
or amendments to any forward-looking statements made herein to reflect
changes in DualStar's expectations or future events.
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DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2000 1999
-------------- -------------
(unaudited)
ASSETS
Current assets:
Cash $16,478,080 $ 110,003
Accounts receivable, net 1,414,344 1,156,312
Deferred tax asset - current 178,000 178,000
Prepaid expenses and sundry
receivable 387,880 244,744
Net assets of discontinued
operations 10,964,832 5,882,529
----------- -----------
Total current assets 29,423,136 7,571,588
Property and equipment, net 2,417,769 2,416,334
Other assets:
Deferred tax asset -
long-term 1,574,000 1,574,000
Other 1,616,171 1,570,486
----------- -----------
Total assets $35,031,076 $13,132,408
=========== ===========
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2000 1999
------------ -----------
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,124,952 $ 1,314,780
Promissory note payable 7,000,000 --
Subordinated note payable -- 1,000,000
Accrued expenses and other
liabilities 684,259 697,963
------------ ------------
Total current liabilities 8,809,211 3,012,743
Mortgage payable - long-term 1,728,269 723,750
Other liabilities 124,916 206,498
Subordinated convertible note -- 2,500,000
------------ ------------
Total liabilities 10,662,396 6,442,991
------------ ------------
Contingencies
Shareholders' equity:
Common stock 157,016 90,000
Additional paid-in capital 41,038,308 14,995,836
Accumulated deficit (14,637,394) (8,396,419)
Deferred compensation (2,189,250) --
------------ ------------
Total shareholders' equity 24,368,680 6,689,417
------------ ------------
Total liabilities and
shareholders' equity $ 35,031,076 $ 13,132,408
============ ============
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months For the Nine Months
Ended March 31, Ended March 31,
----------------------- ---------------------------
2000 1999 2000 1999
----------- ---------- ---------- ---------
Revenues $ 845,446 $ 1,487,608 $ 3,689,423 $ 4,848,730
Cost of revenues 1,114,468 1,166,664 3,547,723 3,571,805
------------ ------------ ------------ -----------
Gross (loss)
profit (269,022) 320,944 141,700 1,276,925
General and
administrative
expenses 2,462,930 604,325 4,469,965 1,900,815
------------ ------------ ------------ -----------
Loss from
continuing
operations
before income
taxes (2,731,952) (283,381) (4,328,265) (623,890)
Provision for
income taxes 40,000 -- 40,000 --
------------ ------------ ------------ -----------
Loss from
continuing
operations (2,771,952) (283,381) (4,368,265) (623,890)
Income (loss)
from dis-
continued
operations 56,517 1,363,342 (1,872,710) 1,472,023
------------ ------------ ------------ -----------
Net (loss)
income $ (2,715,435) $ 1,079,961 $ (6,240,975) $ 848,133
============ ============ ============ ===========
Basic and diluted
(loss) income
per share:
Continuing
operations $ (0.20) $ (0.03)$ (0.38) $ (0.07)
Discontinued
operations 0.00 0.15 (0.16) 0.16
------------ ------------ ------------ -----------
Total $ (0.20) $ 0.12 $ (0.54) $ 0.09
============ ============ ============ ===========
Weighted average
shares
outstanding 13,246,285 9,000,000 11,609,429 9,000,000
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
(UNAUDITED)
2000 1999
------------ ------------
Cash used in operating
activities of continuing
operations $ (3,815,678) $ (1,222,630)
------------ ------------
Cash used in operating
activities of discontinued
operations (6,726,183) (1,925,505)
------------ ------------
Cash flows from investing
activities:
Acquisition of property
and equipment (633,113) (250,989)
------------ ------------
Net cash used in investing
activities (633,113) (250,989)
------------ ------------
Cash flows from financing activities:
Exercise of class A warrants
and underwriter purchase option 20,352,285 --
(Repayment of) Proceeds from
subordinated note payable (1,000,000) 1,000,000
Proceeds from promissory note 7,000,000 --
Proceeds from subordinated
convertible note -- 2,500,000
Principal payments on capital
lease obligations (77,435) (118,703)
Proceeds from refinancing of
mortgage loan 996,250 --
Principal payments on mortgage
loan (21,731) (37,500)
------------ ------------
Net cash provided by
financing activities 27,249,369 3,343,797
------------ ------------
Net increase (decrease) in cash 16,074,395 (55,327)
Cash - beginning of period 583,995 1,356,228
------------ ------------
Cash - end of period $ 16,658,390 $ 1,300,901
============ ============
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CONTACT: DualStar Technologies Corporation
Robert Birnbach, 718/340-6655
Fax: 212/616-6254
e-mail: info@dualstar.com |
