Business Services Industry
Starnet Reports 26% Increase in Revenues in Fiscal Second Quarter
Business Wire, Dec 15, 2000
Starnet Communications International Inc.
Consolidated Balance Sheets
As at October 31, 2000 and April 30, 2000
(in thousands of US dollars)
(Unaudited)
October 31 April 30
2000 2000
----------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 3,937 5,984
Reserves and deposits with
credit card processors 3,639 3,857
Accounts receivable 2,889 2,022
Prepaid expenses and deposits 641 616
Current portion of long-term receivable 37 514
Other current assets 761 1,349
----------------------------------------------------------------------
Total current assets 11,904 14,342
----------------------------------------------------------------------
Restricted cash 7,556 7,234
Capital assets (net) 6,122 4,868
Long-term receivable 1,534 1,539
----------------------------------------------------------------------
27,116 27,983
----------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities 3,594 5,223
Funds held on deposit 4,159 2,118
Deferred revenue 133 287
Current portion of capital lease obligations 687 476
----------------------------------------------------------------------
Total current liabilities 8,573 8,104
----------------------------------------------------------------------
Non-current portion of
capital lease obligations 906 503
Long-term note payable 1,500 0
----------------------------------------------------------------------
Total liabilities 10,979 8,607
----------------------------------------------------------------------
Shareholders' equity
Capital stock 22,335 22,143
Subscription receivable (366) (381)
Retained earnings (deficit) (5,484) (2,371)
Accumulated other comprehensive loss (348) (15)
----------------------------------------------------------------------
Total shareholders' equity 16,137 19,376
----------------------------------------------------------------------
27,116 27,983
----------------------------------------------------------------------
Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
October 31 October 31
2000 1999 2000 1999
----------------------------------------------------------------------
REVENUE
Sales
Royalties and fees 4,730 3,430 8,354 5,794
Licensing 746 912 1,151 2,163
----------------------------------------------------------------------
Total sales 5,476 4,342 9,505 7,957
Cost of sales 1,604 930 2,900 1,797
----------------------------------------------------------------------
Gross profit 3,872 3,412 6,605 6,160
----------------------------------------------------------------------
EXPENSES
Sales 177 127 297 295
Marketing 743 609 1,498 853
Development 863 455 1,709 823
Operations 1,087 (66) 2,168 292
General and
administrative 1,409 1,347 2,623 1,991
Provision for bad debts 0 0 0 250
Legal 217 152 290 189
Depreciation and
amortization 763 378 1,315 646
----------------------------------------------------------------------
Total operating expenses 5,259 3,002 9,900 5,339
----------------------------------------------------------------------
Income (loss)
from operations (1,387) 410 (3,295) 821
----------------------------------------------------------------------
Other income (expenses) 96 51 182 80
----------------------------------------------------------------------
Income (loss) from
continuing operations
before income taxes (1,291) 461 (3,113) 901
----------------------------------------------------------------------
Income tax
expense (recovery)
Current 0 53 0 53
Deferred 0 0 0 0
----------------------------------------------------------------------
Income taxes 0 53 0 53
----------------------------------------------------------------------
Income (loss) from
continuing operations (1,291) 408 (3,113) 848
Income (loss) from
discontinued
operations of the
on-line interactive
media division
(less applicable
income taxes) 0 (67) 0 106
----------------------------------------------------------------------
Net income (loss)
for the period (1,291) 341 (3,113) 954
Retained earnings
(deficit), beginning
of period (4,193) 1,497 (2,371) 884
----------------------------------------------------------------------
Retained earnings
(deficit), end of
period (5,484) 1,838 (5,484) 1,838
----------------------------------------------------------------------
Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
October 31 October 31
2000 1999 2000 1999
----------------------------------------------------------------------
Basic earnings (loss)
per share from
continuing operations $(0.04) $0.01 $(0.10) $0.03
Basic earnings
(loss) per share $(0.04) $0.01 $(0.10) $0.03
Weighted average number
of common shares
Outstanding 32,176,665 30,483,604 32,141,634 29,054,349
Diluted earnings per
share from
continuing operations n/a $0.01 n/a $0.03
Diluted earnings per share n/a $0.01 n/a $0.03
Weighted average number
of common shares
outstanding for
diluted earnings
per share n/a 33,259,232 n/a 33,174,185
Cash flows from
operating activities
Net income (loss) (1,291) 341 (3,113) 954
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 763 384 1,315 646
Amortization of
deferred website costs 0 70 0 105
Amortization of
software development
costs 0 69 0 138
Changes in current
assets and liabilities:
Decrease (increase)
in reserves and
deposits with credit
card processors 433 (439) 218 (493)
Increase in
accounts receivable (720) (1,861) (852) (3,968)
Decrease (increase)
in prepaid expenses
and deposits 3 (168) (25) (339)
Decrease (increase)
in other assets 282 8 588 (727)
Increase (decrease)
in accounts payable
and accrued
liabilities (738) 2,266 (1,629) 2,886
Increase in income
taxes payable 0 14 0 58
Increase (decrease)
in funds held
on deposit 2,268 1,701 2,041 2,137
Decrease in
deferred revenue (239) (128) (154) (134)
----------------------------------------------------------------------
Net cash provided by
(used in) operating
activities 761 2,257 (1,611) 1,263
----------------------------------------------------------------------
Cash flows from
investing activities
Purchase of
capital assets (590) (1,411) (1,771) (1,939)
Transfer to
restricted cash (280) (6,856) (322) (6,856)
----------------------------------------------------------------------
Net cash provided by
(used in) investing
activities (870) (8,267) (2,093) (8,795)
----------------------------------------------------------------------
Starnet Communications International Inc.
Consolidated Statements of Operations
For the Periods Ending October 31
(in thousands of US dollars except per share information)
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
October 31 October 31
2000 1999 2000 1999
----------------------------------------------------------------------
Cash flows from
financing activities
Payments received on
long-term receivable 12 0 482 0
Proceeds from loan 1,000 0 1,500 0
Proceeds from
issuance of shares 130 3,133 192 12,027
Principal repayments
under capital
lease obligations (152) (38) (300) (189)
----------------------------------------------------------------------
Net cash provided
by financing activities 990 3,095 1,874 11,838
----------------------------------------------------------------------
Effect of exchange
rate changes on cash (179) (142) (217) (79)
----------------------------------------------------------------------
Net increase (decrease)
in cash during
the period 702 (3,057) (2,047) 4,227
Cash, beginning
of period 3,235 13,150 5,984 5,866
----------------------------------------------------------------------
Cash, end of period 3,937 10,093 3,937 10,093
----------------------------------------------------------------------
Other non-cash transactions
Leased assets acquired 472 282 959 282
Supplemental cash
flow information
Interest paid 13 10 30 10
Income tax paid 0 0 0 29
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