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CITY OF INDUSTRY, Calif. — (BUSINESS WIRE) — May 24, 2005 — Global ePoint, Inc. (NASDAQ: GEPT – News), a developer of innovative security solutions for the aviation, homeland security and law enforcement markets, announced today first quarter results for the period ended March 31, 2005. The financial results include operations from the Company’s Digital Technology, Aviation and Contract Manufacturing operations.
Global ePoint reported revenue of $5.5 million for the period ended March 31, 2005, compared to $4.4 million for the same period in fiscal 2004. The Company’s results were positively impacted by revenue generated from its Digital Technology and Aviation operations, and higher sales of consumer PCs in its Contract Manufacturing business.
The Company had revenue from the Aviation division of $442,000 for the fiscal 2005 first quarter, compared to no revenue from that operation in the fiscal 2004 period. Global ePoint had $370,000 in revenue from its Digital Technology operation in fiscal 2005, compared to $31,000 in fiscal 2004. Contract Manufacturing sales increased to $4.7 million in fiscal 2005 compared to $4.4 million in fiscal 2004.
The Company’s continued investment in research and development and sales, marketing and infrastructure costs related to the recently launched Perpetual Digital product line and the Aviation division resulted in a net loss of $1.7 million in fiscal 2005, compared to a net loss of $362,000 in the year–earlier period. After accounting for a preferred stock divided of $492,000 in 2005, Global ePoint had a net loss applicable to common stockholders of $2.2 million or $(0.17) per share, compared to a net loss applicable to common stockholders of $362,000 or $(0.03) per share for the same period in 2004.
"We continue to make the transition from lower margin contract manufacturing sales to higher margin state–of–the–art security products." said Toresa Lou, Global ePoint’s Chief Executive Officer. "After several quarters of developing the infrastructure to support our AirWorks and Perpetual business units, we now believe that the company is well positioned to generate strong growth from each of these operations. AirWorks continues to capitalize on opportunities in the German market, where recent regulations that went into effect on April 30th require the crew of large aircraft to have the ability to observe any party attempting to gain access to the cockpit area and to provide surveillance of the forward area of the aircraft. This has led to strong demand for our Cockpit Door Surveillance System (CDSS). We believe that these regulations could shortly go into effect in the rest of Europe and ultimately in the United States. We have also been encouraged that our mobile video-based surveillance and communication systems have performed well in several early test implementations by police departments around the country. Finally,our investments in research and development are yielding exciting new products, as we introduced the next–generation of our propriety digital surveillance technology solutions, further expanding our Perpetual Digital(TM) product line."
Some of the highlights of the first quarter included:
Orders from high–profile customers for the CDSS. GE Capital Aviation Service, the world’s most experienced aircraft leasing company, ordered the AirWorks Cockpit Door Surveillance System (CDSS) to be installed on eight AirBus A320 aircraft.
$5 million order for Company’s Contract Manufacturing Division. The purchase orders, for conventional x–ray security systems, represents orders for computer control equipment from the two largest U.S. makers of conventional x–ray security scanning devices.
Successful test of Digital Technology Division’s mobile video–based surveillance and communication systems. The Sequent Ranger(TM) systems have so far received high marks from its evaluating police departments, in a range of test that have demonstrated the technology functionality.
"We believe that during the second half of the year we will begin to see strong revenue growth and profitability as a result of our expanding portfolio of security products," added Ms. Lou. "We will continue to invest in those businesses, as well as to look for a acquisitions that will further enhance our position as a provider of innovative security solutions."
GLOBAL EPOINT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF March 31, 2005
(Thousands of dollars, except per share amounts) |
| Assets |
| ——————— |
CURRENT ASSETS:
Account receivable, net |
$ |
2,728 |
| Accounts receivable - related parties |
4,303 |
| Inventory |
3,589 |
| Other current assets |
386 |
|
——————— |
| Total current assets |
11,006 |
|
——————— |
|
| Property, plant and equipment, net |
828 |
| Card dispensing equipment and related parts |
885 |
| Goodwill |
6,328 |
| Other intangibles |
1,341 |
| Deposits and other assets |
868 |
|
——————— |
| Total other assets |
10,250 |
|
——————— |
| Total assets |
$ |
21,256 |
|
========= |
|
| Liabilities and Stockholders' equity |
| ————————————————————— |
| Current Liabilities: |
| Bank Overdraft |
|
259 |
| Accounts payable |
$ |
2,321 |
| Accounts payable - related parties |
|
6,883 |
| Accrued expenses |
|
594 |
| Customer deposits |
|
101 |
| Due to stockholder |
|
145 |
| Loan payable |
|
1,442 |
|
——————— |
| Total current liabilities |
|
11,745 |
|
——————— |
|
| STOCKHOLDERS’ EQUITY: |
Preferred stock, no par value, 2,000,000 shares authorized,
44,000 shares outstanding aggregate preference $5,500,000 |
1,886 |
Common stock, $.03 per value, 50,000,000
shares authorized and 12,465,885 shares issued and outstanding
|
374 |
|
Paid-in capital |
13,427 |
|
Accumulated deficit |
(6,176) |
|
——————— |
|
Total stockholders' equity |
9,511 |
|
——————— |
| Total liabilities and stockholders' equity |
$ |
21,256 |
|
========= |
GLOBAL EPOINT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
|
| (UNAUDITED) |
| (Thousands of dollars, except per share amounts) |
|
For the three months ended |
|
|
——————————— |
|
|
March 31, 2005 |
|
March 31, 2004 |
|
|
————— |
|
————— |
| Net sales |
|
$ |
5,476 |
|
$ |
4,430 |
| Cost of sales |
|
4,312 |
|
3,355 |
|
|
————— |
|
————— |
| Gross profit |
|
1,164 |
|
1,075 |
|
|
————— |
|
————— |
| Operating Expenses: |
|
|
|
|
| Selling and marketing |
|
874 |
|
420 |
| General and administrative |
|
1,566 |
|
902 |
| Research and development |
|
278 |
|
251 |
| Depreciation and amortization |
|
97 |
|
16 |
|
|
————— |
|
————— |
| Total operating expenses |
|
2,815 |
|
1,589 |
|
|
————— |
|
————— |
| Loss from operations |
|
(1,651) |
|
(514) |
| Other income (expense) |
|
(8) |
|
152 |
|
|
————— |
|
————— |
| Loss before income tax provision |
|
(1,659) |
|
(362) |
| Income tax provision |
|
- |
|
- |
|
|
————— |
|
————— |
| Net Loss |
|
(1,659) |
|
(362) |
| Preferred stock dividend |
|
(492) |
|
- |
|
|
————— |
|
————— |
| Net Loss applicable to common stockholders |
|
$ |
(2,151) |
|
$ |
(362) |
|
|
===== |
|
===== |
| Loss per share - basic |
|
$ |
(0.17) |
|
$ |
(0.03) |
|
|
===== |
|
===== |
| Loss per share- fully diluted |
|
$ |
(0.17) |
|
$ |
(0.03) |
|
|
===== |
|
===== |
| Weighted average shares and share equivalents |
|
|
12,234 |
|
|
10,840 |
|
|
===== |
|
===== |
|
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Global ePoint’s growth catalyst, through its wholly-owned subsidiaries, is the design, manufacturing, sales and distribution of digital video surveillance systems for the law enforcement, military, aviation and homeland security markets. On the cutting edge of digital technology and seeking to expand its product line, Global ePoint is developing new compression technologies and next–generation, secure network digital video systems and servers for a wide range of new markets, concentrating primarily on security and homeland defense applications. As a solid recurring revenue stream, the Company also manufactures customized computing systems for industrial, business and consumer markets, as well as other specialized electronic products and systems. Complete vertical integration — from design and manufacturing to sales and distribution — allows the Company to capture efficiencies and maintain cost advantages in these growing markets, particularly homeland security. For more information, please visit www.globalepoint.com.
This news release contains forward–looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward–looking statements. Factors that could cause or contribute to differences include, but are not limited to, risks related to the integration of the Company’s recently acquired operations; market acceptance of the Company’s products; delays in the introduction of new products; production and/or quality control problems; further approvals of regulatory authorities and the denial, suspension or revocation of certifications and licenses by governmental authorities; and the Company’s ability to obtain capital as and when needed. For a discussion of these and other factors which may cause actual events or results to differ from those projected, please refer to the Company’s most recent annual report on Form 10–KSB and quarterly reports on Form 10–QSB, as well as other subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur. |
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