PacificNet, which sells gambling technology as well as Customer Relationship Management (CRM) in China, has announced completion of the acquisition Octavian International, a worldwide supplier of gambling technology, products and systems.
Following the signing of an agreement with Octavian on December 7, due diligence was completed within four weeks and the acquisition was consummated January 15.
As part of the closing, PacificNet issued 2,330,000 restricted shares of PACT representing approximately 19.5 percent of PacificNet's outstanding shares. According to Octavian's financial reports as audited by Grant Thornton UK under UK GAAP, Octavian had revenue of approximately $64.6 million, gross profit of approximately $18.4 million, EBITDA of approximately $6.2 million, and pre-tax profit of approximately $5.5 million, for the fiscal year ending Dec 31, 2006.
In November PacificNet reported unaudited 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.
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David Sims is a contributing editor for ContactCenterSolutions. To see more of his articles, please visit his columnist page.
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