PacificNet's 3Q Results
November 30, 2007
PacificNet, a CRM vendor and seller of gambling technology in China, has reported un-audited results for the third quarter ended September 30, 2007.
Quarterly revenue was $9,802,000, approximately 7 percent less than the same period last year (2006Q3: $10,525,000) due to lower non-core (low margin) mobile telecom products distribution business in China. Revenues from its multiplayer electronic gambling machine product line to casino operators reached approximately $1 million for the third quarter, an increase of 99 percent as compared to Q2 2007.
The Quarterly gross profit was $2,374,000, of which 37 percent was gambling product related, representing an increase of 115 percent as compared to $1,107,000 for Q3 2006.
The Quarterly operating income was $137,000, a turnaround compared to Operating Loss of $618,000 for Q3 2006. Operating Income margin increased to 2 percent from (6) percent in Q3 2006, as the company continued to gain traction on the high margin gaming technology business.
The Quarterly net loss of ($220,000), or EPS of ($0.02) basic/diluted loss per share, represents a quarter-over-quarter increase of 80 percent as compared to a loss of ($1,115,000), or EPS of ($0.09) basic/diluted loss per share for the same quarter of 2006.
Total revenues for the first nine months of 2007 were $28,090,000, representing a decrease of 13 percent as compared to $32,332,000 for the same period of 2006. The gross profit for the first nine months of FY2007 was $7,274,000, an increase of 57 percent, as compared to $4,622,000 for the same period of 2006.
The net loss for the first nine months of this year was ($639,000) or EPS of ($0.06) per basic/diluted loss per share, as compared to net income of $604,000, or $0.02 per basic/diluted earnings per share for the same period of prior year.
"Due to the dynamic nature of the rapidly evolving gaming market in Macau and Asia," PacificNet officials say, "the company will not be providing detailed revenue and profit projections at this time."
Last month PacificNet announced it had filed the amended Annual Reports on Form 10-K/A with the SEC containing re-audited financial statements with respect to fiscal years 2004 and 2005.
As previously announced, the company's prior independent public accountants have withdrawn their audit reports regarding the company's financial statements for the years 2004 and 2005 resulting in the Nasdaq Listing Qualification Panel's decision to commence delisting proceedings with respect to PacificNet's common stock.
The Nasdaq Listing Qualifications Panel had granted, however, the company's request for continued listing on the Nasdaq Stock Market, subject to the condition that on or before September 27, 2007 the company re-file the above years form 10K or face a determination by the Nasdaq Listing Qualifications Panel whether or not to grant continued listing.
On March 30, 2007, PacificNet received a letter from the Nasdaq Stock Market indicating that the company's common stock was subject to delisting pursuant to Nasdaq Marketplace Rule 4310(c)(14) which requires, among other things, that annual reports filed with Nasdaq contain audited financial statements.
David Sims is a contributing editor for ContactCenterSolutions. To see more of his articles, please visit his columnist page.
