Yet another attempt by Ziasun to mislead and deceive the investment community!! ZiaSun did not release Q2 results separately, but rather in total for the first half of the year. The reasons for this are obvious: ZiaSun had a poor second quarter.
Rather than reporting the Q2 results separately, which undoubtedly would have caused a degree of consternation, the company tried to conceal the poor second quarter results by releasing figures for the first half of 2000 i.e. Q1 and Q2. As any seasoned investor and market participant knows, this is virtually unheard of and highly irregular: Public companies report quarter by quarter, no matter how bad the news is.
Here is a more appropriate headline that ZiaSun should have used in its August 11 press release. The analysis and discussion backing this up follow:
ZiaSun reports lackluster sales growth, rapid gross margin erosion, a sharp profit decline and a deteriorating cash position.
Based on the company's press release of August 11 and the Q1 10Q, it appears that ZSUN had lackluster sales growth in Q2. According to the press release, Net Sales for the first half of 2000 (i.e. cumulatively through June) were $29,970,952. Reported Q1 Net Sales, according to the 10Q were $14,498,361. This means that Net Sales for Q2 were 15,472,591. This translates into a sequential sales growth rate of only 6.7%, sharply off the reported growth rates of 54.4% for Q1 2000 and 18.4% for Q4 1999, and significantly at variance with the company's assertion that it is 'rapidly growing'.
But perhaps of more significance is the rapid Gross Profit erosion. Per the press release, Gross Profit cumulatively through June was $11,877,461. Q1 Gross Profit, according to the 10Q was $7,023,947. This means that the Gross Profit for Q2 was only $4,853,514 or 31.4%, down from 48.5% in Q1.
In terms of Profit Before Tax, the picture is also far from rosy. According to the press release, Income Before Taxes for the first half of 2000 was $7,425,401. Deducting the Q1 reported amount of $4,244,450 yields an Income Before Tax figure for Q2 of $3,180,951, or a 25% decline versus the previous quarter.
ZSUN also seems to be burning cash at a fast rate. Per the press release the company had $10,735,929 in cash and receivables. At the end of the first quarter ZSUN reported that cash and receivables amounted to $16,801,667. This means that cash and receivables decreased by $6,065,738 in Q2.
In net, ZiaSun is experiencing decelerating sales growth, rapid margin erosion and deterioration in its financial condition. Moreover, it should also be recognized that the company has very little in the form of tangible assets. The bulk of the $134,426,398 reported as total assets is comprised of Goodwill associated with the acquisition of OIA.
Why did ZSUN not report Q2 results separately, i.e. for the second quarter only as all other public companies do, but rather chose to report results for the first half of 2000 i.e. Q1 plus Q2? Draw your own conclusions!
With a view to assisting current and potential investors in their investment decisions, a complete research report will be issued and published on The Truthseeker.com once ZiaSun files its Form 10Q with the SEC.
ZiaSun Reports Continued Record Sales and Profits ForThe Six-Month Period Ending June 30, 2000
Record Sales of $29.9 Million in First-Half-2000 with $7.4 Million in Pre-Tax Profit and $0.39 EPS EBITDA. First-Half 2000 Sales Increased More Than 300%
Over First-Half 1999
SOLANA BEACH, Calif., Aug. 11 /PRNewswire/ -- ZiaSun Technologies, Inc. (OTC Bulletin Board: ZSUN) (www.ziasun.com), a multi-faceted and rapidly-growing holding company, which has also recently acquired equity stakes in several new e-commerce ventures, today reported exceptional operating results for the first-half ended June 31, 2000.
ZiaSun's net sales for the first-half 2000 increased 303% to $29,970,952 from $9,899,191 in first-half 1999. First-half gross profit increased 291% year-over-year to $11,877,461 with a solid 40% gross margin. First-half fiscal results were very profitable with income before taxes of $7,425,401, or $0.39 EPS EBITDA, compared to $0.10 EPS EBITDA in first-half 1999. The large increase in first-half 2000 net sales over first-half 1999 net sales is due primarily to the continued global growth of OIA, which was not a subsidiary of the Company in Q1-1999.
As of June 30, 2000, the Company had $10,735,929 in cash and receivables, total current assets of $12,140,965 and $134,426,398 in total assets. The increase in current assets at June 30, 2000, compared to June 30, 1999, is primarily due to the increase in cash from $5,483,031 to $9,312,769, an increase of $3,829,738 or 170%. ZiaSun also reported no long-term debt and $128,125,421 in total stockholders' equity at the close of first-half 2000.
These numbers include Momentum Internet Inc. (MII), which management expects to sell in exchange for 725,000 shares of ZiaSun's common stock during the third quarter of 2000. MII had net sales of $737,603 during the six months ended June 30, 2000.
"ZiaSun remains focused on selective investments in e-commerce businesses, along with a growth strategy, which we believe to be in the best interest of our shareholders. The fact that ZiaSun's revenues for the first six months of 2000 exceed its total revenues for the fiscal year 1999, is a clear indicator that we are accomplishing our ongoing growth objectives while maintaining profitability," stated D. Scott Elder, ZiaSun's Chairman. "ZiaSun is particularly focused on lucrative e-finance and education sector businesses that either demonstrate an existing or relatively short 'Path-to-Profits' business model," Elder further commented.
In recent months, the pace of ZiaSun's global expansion efforts have quickened. Along with balancing its international holdings to better meet its growth and profitability objectives, the Company recently finalized a key alliance with The McKenna Group. This relationship is expected to play a major role in presenting the Company with choice, early-stage investment opportunities in unique, new companies providing market-leading Internet technology applications. Additionally, this provides an extra business dimension to ZiaSun that is simply not present in most other companies of its size and relatively new presence in its business sector.
About ZiaSun Technologies, Inc.
ZiaSun Technologies, Inc. is a multi-faceted Internet technology holding company focused on international e-finance and investor education, along with selective e-commerce opportunities. It specializes in online support services within North America, Asia and other international markets. The Company's portfolio *currently includes: Online Investors Advantage (www.i-advantage.com), Momentum Asia, Inc. (www.momentumasia.com), ServiceLive (www.servicelive.com), Momentum Internet, Inc. (www.momentumplus.com), PINmail (www.pinmail.com), MEDIAhits (www.mediahits.com), Swiftrade (www.swiftrade.com), AsiaEnet Ltd. (www.asiaenet.com), Tigertooth (www.tigertooth.com), Search Dragon (www.searchdragon.com), M Finance (www.mfinance.com -- a top-100 financial Web site), and a 19 percent equity position in Asia4Sale (www.asia4sale.com).
*NOTE: It is anticipated that certain holdings will soon be sold back to Vulcan as announced in a prior Press Release.
About The McKenna Group
The McKenna Group, in a team effort with its clients, helps them build new business ventures and reinvent existing businesses for the new, customer-driven economy. Its broad spectrum of clients, from Global 100 firms to start-ups, includes some of the most exciting firms transforming the commercial landscape through innovation in new value propositions, business designs and enabling technologies.
The McKenna Group has been headquartered in Silicon Valley, home to many of the core technologies shaping the new economy, for more than twenty years. During that period, they have worked with most of the Valley's technology and business leaders. In total, they have a network of six offices in North America, five in Europe (through an equity partner) and Tokyo.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this news release that my be considered forward-looking statements could be subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. These include uncertainties in the market, competition, legal, success of marketing efforts and other risks detailed from time to time in the company's SEC reports. The company assumes no obligation to update the information in this release.
Contact Michelle Cutting, Shareholder Services of ZiaSun Technologies Inc., 858-350-4060, mcutting@pinmail.com.
SOURCE ZiaSun Technologies, Inc.
CO: ZiaSun Technologies, Inc.; Momentum Internet Inc.; McKenna Group
ST: California
IN: CPR
SU: ERN
08/11/2000 07:30 EDT prnewswire.com |
