RCG - bought for hold. Looks very promising.
RCG Announces First Quarter Results; Revenues Grow 96% Losses Narrow 94%
CHARLOTTE, N.C., Nov. 15 /PRNewswire-FirstCall/ -- eResource Capital
Group, Inc. (Amex: RCG) ("RCG") today announced a loss of $150,000, or ($.01)
per share, on revenues of $18.8 million, for its first fiscal quarter ended
September 30, 2002. This compares with a loss from operations of $2.3
million, or ($.21) per share, on revenues of $9.6 million for the quarter
ended September 30, 2001. Weighted average shares outstanding increased from
11.0 million to 12.3 million over the period.
"In a breakthrough quarter, RCG grew revenues 96% and reduced losses by
94%," according to President and CEO Mike Pruitt.
The results for the quarter ended September 30, 2002 include a net gain on
investments of $175,000 of which $208,000 relates to the Company's sale to a
private investor of 125,000 restricted common shares of LifeStyle Innovations,
Inc. (OTC Bulletin Board: LFSI), offset partially by a net loss of $33,000
related to non-cash market adjustments of common stock purchase warrants.
This compares to a net loss on investments of $211,000, representing a non-
cash market adjustment of warrants, for the quarter ended September 30, 2001.
The results for the quarter ended September 30, 2002 also include income of
$263,000 in grant proceeds for a government assistance program designed to
provide grants to companies whose businesses were directly impacted by the
events of September 11, 2001, and a gain of $171,000 on the sale of certain
home technology assets to companies that are operating these businesses as
franchises.
"Even these results vastly understate what has happened during the
quarter," Pruitt said. "We would have reported solid profits for this
quarter, if we had not been required to book losses of $509,000 from our 78%
investment in LFSI. Today, we own 15,875,000 shares of LFSI restricted common
stock. As noted above, we sold 125,000 shares during the quarter ended
September 30, 2002. RCG is actively exploring several options that may enable
RCG and its shareholders to maximize the value of its investment in LFSI,"
continued Pruitt. Shares of LFSI stock closed at $5.45 on November 14, 2002.
During the quarter ended September 30, 2002, 97% of revenues came from two
of the Company's operating divisions -- Aviation Travel Services and
Technology Solutions.
For the quarter, Aviation Travel Services recognized revenues of $15.1
million, which was $4.9 million, or 48% higher than the fourth quarter of
fiscal 2002, and $9.0 million, or 149% higher than the first quarter of fiscal
2002. Quarterly operating profits in this division totaled $670,000, which,
as mentioned above, included a grant in the amount of $263,000. The dramatic
improvement in results from Aviation Travel Services was due to the expansion
of a unique turnkey outsourcing service to affiliates of MyTravel Group plc
(FTSE: MT), the largest air inclusive tour operator in the world, as well as
increased charter operations. "With a solid, low-risk revenue platform now in
place, our focus in travel services is leveraging our platform to provide
incremental improvements in profit margins, as well as expanding the number of
services we offer," said Pruitt.
Technology Solutions lost $27,000 during the quarter, on revenues of $3.2
million. This compares with a loss of $548,000 on revenues of $2.8 million for
the first fiscal quarter ended September 30, 2001.
About eResource Capital Group (RCG)
eResource Capital is listed on the American Stock Exchange and trades
under the symbol "RCG." RCG is focused on delivering to shareholders rapidly
growing, relatively low risk revenues, along with steadily increasing
profitability. The majority of RCG's revenues are derived from a highly
specialized travel service organization, flightserv, which delivers a unique
turnkey air service. RCG also has two businesses focused on the technology
services sector, which consist of a wholly-owned software and IT services
division, Logisoft Corp., and home technology services from Lifestyle
Innovations, Inc., which is a separately traded public company (OTC Bulletin
Board: LFSI). RCG owns approximately 16 million shares of LFSI, which
represents an equity ownership of approximately 78% of the company. More
information is available on RCG atwww.eresourcecapital.com. For investor
information, contact Andrew Lauman at 704-553-9330 ext. 27 or
adl@eresourcecapital.
Statements in this news release about anticipated or expected future
revenue or growth or expressions of future goals or objectives, including
statements regarding whether current plans to grow and strengthen the
company's existing network will be implemented or accomplished, are forward-
looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. All forward-looking statements in this
release are based upon information available to the Company on the date of
this release. Any forward-looking statements involve risks and uncertainties,
including the risk that the Company will be unable to grow or strengthen its
network due to a lack of capital or an inability to identify acquisition
candidates, as well as those risks and uncertainties described in the
Company's filings with the Securities and Exchange Commission, that could
cause actual events or results to differ materially from the events or results
described in the forward-looking statements, whether as a result of new
information, future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements.
This statement should be read in conjunction with the Company's Form 10-
QSB filed with the Securities and Exchange Commission on November 14, 2002.
ERESOURCE CAPITAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In Thousands, except share amounts)
Three months ended September 30,
2002 2001
Revenue:
Services $ 15,361 $ 6,675
Product sales 3,467 2,931
Total revenue 18,828 9,606
Cost of revenue:
Services 14,186 7,040
Product sales 3,046 2,468
Total cost of revenue 17,232 9,508
Gross profit 1,596 98
Selling, general and
administrative expenses compensation
related to issuance of stock options
and warrants 33 --
Selling, general and
administrative expenses - other 1,992 2,228
Provision for bad debts 4 459
Depreciation and amortization 107 87
Operating costs and expenses 2,136 2,374
Operating loss (540) (2,276)
Interest expense, net 102 9
(Gain) loss on investments, net (175) 211
(Gain) on sale of assets -- (171)
Other (income) (263) --
Minority interest (54) --
Loss from continuing operations (150) (2,325)
Gain on disposal of
discontinued operations -- 576
Loss before cumulative effect of
change in accounting principle (150) (1,749)
Cumulative effect of change in
accounting principle -- (693)
Net loss $ (150) $ (2,442)
Basic and diluted net loss per share:
Loss from continuing operations $ (0.01) $ (0.21)
Gain on disposal of discontinued
operations $ -- $ 0.05
Cumulative effect of change in
accounting principle -- (0.06)
Net income (loss) $ (0.01) $ (0.22)
Weighted average shares outstanding 12,319,907 10,954,006
Weighted average shares outstanding
assuming dilution 12,319,907 10,954,006
This statement should be read in conjunction with the Company's Form
10-QSB filed with the Securities and Exchange Commission on
November 14, 2002.
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SOURCE eResource Capital Group, Inc.
-0- 11/15/2002
/CONTACT: Andrew Lauman of eResource Capital Group, Inc.,
+1-704-553-9330, ext. 27, or e-mail, adl@eresourcecapital/
/Web site: eresourcecapital.com /
(RCG LFSI) |
