Sitestar Announces Annual Results
Revenues Grew by 765% to $1.93 million from FY99 Sales
ENCINO, Calif.--(BUSINESS WIRE)--April 18, 2001--Sitestar Corp. (OTCBB:SYTE - news), a technology investment company, today reported results for the quarter and year ended Dec. 31, 2000.
``We are pleased with our performance over the past year and look forward to building on our strong foundation,'' commented Clinton J. Sallee, president and chief executive officer of Sitestar.
``Our business model is fundamentally sound and offers ample long-term growth opportunities. We have established a profitable footprint within the mid-Atlantic region, allowing us to realize multiple economies of scale. We are cash flow positive and have a strong balance sheet. We have only begun to tap into our vast potential and will continue to execute our growth strategy
Sitestar's Fiscal Year 2000 actual audited revenues of $1,934,637 were slightly lower than the earlier estimate announced in the company's Feb. 15, 2001, press release of $2.04 million.
Financial Summary
Revenues for the quarter ended Dec. 31, 2000, increased 214% to $643,863 from $205,065 for the same period of 1999. The increase in revenues is primarily attributable to the acquisitions completed at the end of 1999 and during the second half of 2000, combined with internal growth.
Net loss for the quarter ended Dec. 31, 2000, was $3,902,064, or $0.16 per share, as compared with a net loss of $1,116,558, or $0.06 per share, for the quarter ended Dec. 31, 1999. The fourth quarter of 2000 includes a variety of non-cash related charges of $1.86 million for goodwill impairment, $471,294 for depreciation and amortization, $990,110 in stock-based compensation and $604,889 in stock-based financing charges which represent $0.16 per share of the fourth quarter loss.
The net loss for both periods includes depreciation and amortization of goodwill associated with the acquisitions. Excluding these non-cash related charges, the adjusted EBITDA income for the quarter ended Dec. 31, 2000, was $24,611, as compared with an Adjusted EBITDA loss of $454,907 for the same period in 1999.
Revenues for the year ended Dec. 31, 2000, increased 765% to $1,934,637 from $223,749 during 1999. The increase in revenues is primarily attributable to the acquisitions the company completed at the end of 1999 and during the second half of 2000, combined with internal growth.
Net loss for the year ended Dec. 31, 2000, was $5,241,487, or $0.20 per share, as compared with a net loss of $3,371,689, or $0.18 per share, for the year ended Dec. 31, 1999. The net loss for the year ending 2000 includes a one-time non-cash gain of $363,831 in relation to the disposal of certain discontinued operations. In addition, the net loss for year ending 2000 also includes a variety of non-cash related charges of $1.86 million for goodwill impairment, $1,618,376 for depreciation and amortization, $1,214,423 in stock-based compensation and $857,919 in stock-based financing charges. These non-cash gains and charges represent $0.20 per share.
The net loss for both periods includes depreciation and amortization of goodwill associated with the acquisitions. The company essentially broke-even for the year ended 2000 on an adjusted EBITDA basis. Excluding these non-cash related gains and charges, the adjusted EBITDA loss for the year ended Dec. 31, 2000, was $12,367, as compared with an Adjusted EBITDA loss of $450,340 for the same period in 1999.
Operations Highlights
One of the significant events in the company's quarter ended Dec. 31, 2000, was its write down of the recorded goodwill related to its acquisitions by $1.86 million. The company took this action as a result of a number of indicators, including analyzing the expected cash flows from its acquisitions, evaluating the current market values for companies in the company's industry sector and analyzing multiples of revenue which the company would pay for these acquisitions today, compared with the revenue multiple paid at the date of acquisition. Based on this evaluation, the company concluded that the full recovery of the value of the goodwill through future cash flows or through a transaction was not likely.
About Sitestar
Sitestar is a publicly held investment company that acquires and invests in emerging technology-based enterprises. Its primary focus is the acquisition of small independent Internet Service Providers in the rural and secondary markets of the mid-Atlantic region of the United States. Sitestar's wholly owned subsidiaries provide narrow and broadband Internet access, electronic infrastructure development, Web-hosting and design services and other technology-related solutions to residential and business users.
Sitestar's primary objective is to create a mix of technology-based operating companies and technology-related portfolio investments to create a broad and diverse set of core products and services that will complement and enhance the value of its existing product and service offerings.
Sitestar's wholly owned subsidiaries include Sitestar.net, Lynchburg.net, Computers By Design, Neocom Microspecialists, Soccersite.com, Greattools.com, Holland-American.com, and the company has a minority equity investment in Qliq-On Corp.
Sitestar corporate headquarters are located at 16133 Ventura Blvd., Suite 635, Encino, Calif. 91436; telephone: 818/981-4519; and facsimile: 818/981-2658. Additional information is available on the company's Web site at sitestar.com.
Statements regarding financial matters in this news release other than historical facts are ``forward-looking statements,'' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The company intends that such statements about the company's future expectations, including future revenues and earnings, the anticipated stock dividends and all other forward-looking statements, be subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results.
SITESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTERS AND YEARS ENDED DEC. 31, 2000 AND 1999
Quarter Ended Year Ended
Dec. 31 Dec. 31
2000 1999 2000 1999
REVENUES
Internet Access
and Services 643,863 205,065 1,934,637 223,749
Total Revenues 643,863 205,065 1,934,637 223,749
OPERATING EXPENSES
Cost of Goods Sold 316,125 102,119 955,592 124,859
General and Administrative 318,241 358,986 1,037,223 549,230
Stock based compensation 990,110 549,242 1,214,423 2,549,242
Write down of Goodwill 1,860,000 -- 1,860,000 --
Loss from Discontinued
Operations -- 198,867 42,233 239,653
Depreciation
and Amortization 471,294 110,502 1,618,376 118,775
Total Operating
Expenses 3,955,770 1,319,716 6,727,847 3,581,759
LOSS FROM OPERATIONS (3,311,907)(1,114,651)(4,793,210)(3,358,010)
OTHER EXPENSES/(INCOME)
Interest Expense 382 1,907 104,238 13,679
Stock based Financing
Charges 604,889 -- 753,681 --
Gain on Sale of Asset -- -- (363,831) --
Increase in value of
marketable securities (15,114) -- (45,811) --
Total Other Expenses/
(Income) 590,157 1,907 448,277 13,679
LOSS BEFORE INCOME
TAXES (3,902,064)(1,116,558)(5,241,487)(3,371,689)
PROVISIONS FOR
INCOME TAXES -- -- -- --
NET LOSS (3,902,064)(1,116,558)(5,241,487)(3,371,689)
NET LOSS PER SHARE $ (0.16) $ (0.06) $ (0.20) $ (0.18)
Weighted Average Shares
Outstanding
Basic and Diluted 24,507,376 18,600,036 26,526,529 18,932,268
SUPPLEMENTAL FINANCIAL DATA
Stock Based Compensation
(Non-cash) 990,110 549,242 1,214,423 2,549,242
Int. & Stock Based
Financing (incl non-cash) 605,271 1,907 857,919 13,679
Write down on Goodwill
(non-cash) 1,860,000 -- 1,860,000 --
Depreciation &
Amortization (non-cash) 471,294 110,502 1,618,376 118,775
Loss/(Gain) From
Discontinued Oper.
(non-cash) -- -- 42,233 239,653
Gain on Sale of Assets
(non-cash) -- -- (363,831) --
TOTAL NON-CASH
EXPENSES/(INCOME) 3,926,675 661,651 5,229,120 2,921,349
ADJUSTED EBITDA $ 24,611 $(454,907) $ (12,367) $(450,340)
Note: Represents earnings/(loss) before depreciation and amortization,
interest income and expense, income tax expense (benefit), equity in
profit/(loss) of unconsolidated affiliates, impairment in value of
goodwill, stock based compensation, gain/(loss) on assets and
extraordinary items.
Adjusted EBITDA is presented because the company believes it is an
acceptable financial indicator of the company's ability to meet future
debt service, capital expenditure and working capital requirements.
Adjusted EBITDA is not determined in accordance with generally
accepted accounting principles. It should not be considered in
isolation or as an alternative to net income as an indicator of
operating performance or as an alternative to cash flow as a measure
of liquidity. In addition, the company's adjusted EBITDA is not
comparable to those of other companies, which may determine adjusted
EBITDA differently.
SITESTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 289,294
Marketable securities at market 563,811
Accounts receivable, less allowance for
doubtful accounts of $284,800 183,855
Inventory 92,863
Other current assets 100,859
Total current assets 1,230,682
PROPERTY AND EQUIPMENT, net 508,009
CUSTOMER LIST, net of accumulated amortization
of $943,470 1,193,530
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS
ACQUIRED, net of accumulated amortization of
$640,601 2,185,457
OTHER ASSETS 317,315
TOTAL ASSETS $5,434,993
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 409,629
Deferred revenue 222,041
Income taxes payable 92,000
Convertible debentures 756,500
Note payable - stockholders, current portion 136,874
Notes payable, current portion 49,124
Capital lease obligations, current portion 27,809
Total current liabilities 1,693,977
NOTES PAYABLE - STOCKHOLDERS, less current portion 51,308
NOTES PAYABLE, less current portion 427,696
CAPITAL LEASE OBLIGATIONS, less current portion 23,842
TOTAL LIABILITIES 2,196,823
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value, 10,000,000 shares
authorized, 0 shares issued and outstanding --
Common Stock, $0.001 par value, 75,000,000 shares
authorized, 62,175,638 shares issued and outstanding 62,176
Additional paid-in capital 12,467,733
Accumulated deficit (9,291,739)
Total stockholders' equity 3,238,170
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,434,993
--------------------------------------------------------------------------------
Contact:
Sitestar Corp., Encino
Clinton J. Sallee, 818/981-4519
csallee@sitestar.com |
