FOR IMMEDIATE RELEASE
GLOBAL EPOINT REPORTS ON RESULTS FOR
THE FIRST QUARTER
Company Continues Moving Forward with Strategic Transitioning to New Market
Opportunities
San Marcos, California, May 16, 2002 – GLOBAL EPOINT, INC. (the “Company”)
(NASDAQ/NMS: GEPT) today reported on results of operations for the first quarter
ended March 31, 2002.
As previously announced, on June 1, 2001, the Company completed the sale of
those assets used in its existing lottery business, relating to the manufacture,
sale, lease and service of instant lottery ticket vending machines. As a result
of the sale, the previous operations related to the lottery assets have been
reflected as discontinued operations on the Company’s financial statements. The
sale was the first major step in the Company’s long-term corporate strategy,
which is intended to enhance shareholder value by transforming the Company from
its then existing business structure into a structure more able to take
advantage of new market opportunities.
Revenues from continuing operations for the first quarter of 2002 were
approximately $86 thousand versus revenues of approximately $6 thousand in the
prior year comparable quarter. The increase in revenues was primarily from
interest and investment income resulting from the Company’s cash reserves and
investments. Total operating expenses from continuing operations for the first
quarter of 2002 were approximately $385 thousand versus total operating expenses
of $595 thousand for the prior year comparable quarter. Included in operating
expenses for 2002 were restructuring costs of $207 thousand that consisted of
payroll, facilities costs, refurbishment costs and certain other charges
incremental to restructuring operations and preparing for new business
activities. Such costs are expected to be completed by the Fall of 2002. Without
restructuring costs, the Company’s total operating expenses in 2002 would have
been $178 thousand, less than half of the prior year’s quarters total operating
expenses. As a result of the above, the Company reported a net loss from
continuing operations of approximately $299 thousand ($.06 per share) in the
first quarter of 2002, versus a net loss from continuing operations of
approximately $589 thousand ($.14 per share) for the first quarter of 2001.
During the first quarter of 2001, the Company generated net income from
discontinued operations of approximately $294 thousand ($.07 per share). The net
income from discontinued operations combined with the net loss from continuing
operations generated an overall net loss in the first quarter of 2001 of
approximately $295 thousand ($.07 per share). The Company did not have
discontinued operations in 2002.
As of March 31, 2002, the Company maintained over $5 million in cash and cash
equivalents and net tangible equity of approximately $9 million. The cash funds
have been generally placed in short-term, highly-liquid investments pending the
completion of the Company’s strategic initiatives.
Frederick Sandvick, the Company’s Chairman and Chief Executive Officer,
commented, “As previously reported, we have set forth on a series of actions
intended to transform the Company; and to strategically move forward with new
market opportunities that can better enhance shareholder value. During the first
quarter of 2002 we continued moving forward with our plans to transition into
new market opportunities. In that regard, we have been undergoing restructuring
costs that primarily relate to readying our existing inventory of card
dispensing equipment for redeployment and sale. We anticipate the launch in 2002
of a new division, named Global Telephony, in the high-volume, cash-oriented
prepaid telephony market, once our steps necessary for the redeployment of the
equipment are complete.”
“We also are continuing to review possible merger and acquisition candidates as
well as other market opportunities. We remain extremely optimistic that we will
be able to accelerate our entry into new market opportunities through a merger
or acquisition. Although the Company continues to face considerable changes,
opportunities, risks and challenges ahead, we are excited about the future.”
About Global ePoint
Global ePoint has provided effective technologies for transaction automation
since its formation in 1991. Global ePoint pioneered the development of the
instant ticket vending machine for lotteries worldwide and has designed sold,
leased and serviced high-security vending machines both domestically and
internationally. Global ePoint sold its lottery business on June 1, 2001, and is
now proceeding with plans to enter into new market opportunities.
Any forward-looking statements in this release are made pursuant to the “safe
harbor” provisions of the Private Securities Litigation Act of 1995. Investors
are cautioned that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties including, but not limited to, the successful completion of
proposed equity raises, which may be necessary for the Company to implement its
plans to develop new market opportunities, continued acceptance of the Company’s
products and services in the marketplace, competitive factors, new products and
technological changes, the Company’s successful entry into new markets, the
Company’s ability to increase its customer base, as well as general, political
and other uncertainties related to customer purchases and agreements and other
risks detailed in the Company’s periodic filings with the Securities and
Exchange Commission.
Global ePoint, Inc.
Selected Financial Information
(In thousands, except per share data)
Three Months Ended March 31,
2002 2001
Revenues $ 86 $ 6
Loss from continuing operations $ (299)(A) $ (589)
Income from discontinued operations - $ 294
Net loss $ (299)(A) $ (295)
Earnings (loss) per share:
Continuing operations $ (.06)(A) $ (.14)
Discontinued operations - .07
Net loss $ (.06)(A) $ (.07)
(A) Includes restructuring costs of $207 thousand
For More Information Contact:
Frederick Sandvick, Chief Executive Officer
Global
ePoint,
Inc.
1370 West San Marcos Blvd. Suite 100
San Marcos, CA 92069
Tel: 760-510-4900
FAX: 760-510-4949
Internet: [email protected]
