BELL TECHNOLOGY GROUP LTD. BELL TECHNOLOGY GROUP LTD. ANNOUNCES SECOND QUARTER RESULTS
May 14, 1998–Bell Technology Group Ltd.(Nasdaq: BELT; BELTW)
today announced results for the three and six months ended March
31, 1998.
Revenues for the three months ended March 31, 1998 were $4,351,607 compared with $5,229,452 for the three months ended March 31, 1997. For the six months ended March 31, 1998, revenues were $9,091,174, compared with $8,925,851 for the six months ended March 31, 1997. Gross profit margins increased from approximately 22% for the three months ended March 31, 1997 to approximately 37% for the three months ended March 31, 1998. Gross profit margins increased from approximately 23% for the six months ended March 31,1997 to approximately 36% for the six months ended March 31, 1998. The revenue decrease for the three months ended March 31, 1998 was attributable to a decrease in sales of Computer Products and Services which had revenues of $2,899,250 for the three months ended March 31, 1998, compared with $4,618,370 for the three months ended March 31, 1997. The Company is de-emphasizing certain hardware sales and services in favor of software and Internet-related sales, which tend to produce more favorable profit margins.
Marc H. Bell, President and CEO, stated “This quarter was a success
for Bell Technology in terms of our shifting our revenue mix toward
internet related sales. For this quarter in 1998, 33% of our revenues
came from the Internet and Media Development division as compared
to 12% for the same period in 1997. In addition, we have successfully
grown our Internet services customer base to approximately 500 medium
and large businesses as of March 31, 1998, up from approximately 350
as of December 31, 1997.” Revenues from Internet and Media Development,
for the three months ended March 31, 1998, increased 131.9% to $1,440,548
compared to $621,082 for the three months ended March 31, 1997. Earnings
before Interest, Taxes, Depreciation and Amortization (“EBITDA”)
for the three months ended March 31, 1998 was a loss of $262,378 as
compared to a loss of $264,891 for the three months ended March 31,
1997. The EBITDA loss was primarily attributed to an increase in Selling,
General and Administrative expenses in anticipation of Bell’s future
expansion plans. EBITDA for the six months ended March 31, 1998 was
a loss of $246,147 as compared to a loss of $803,587 for the six months
ended March 31, 1997. The net loss for the three months ended March
31, 1998 was $589,063 or $0.17 per share, as compared to a loss of
$393,202 or $0.13 per share for the three months ended March 31, 1997.
For the six months ended March 31, 1998, the net loss was $870,676
or $0.25 per share, as compared to $1,074,008 or $0.35 per share for
the six months ended March 31, 1997.
Marc Bell additionally stated, “The second quarter of 1998
was also pivotal for the Company’s future with regard to the high
yield note offering, which was subsequently completed in April for
$160 million. The Company now has sufficient capital to execute its
future expansion plans.” On April 27, 1998, the Company announced
that ING Baring (U.S.) Securities, Inc., an affiliate of Furman Selz
LLC, as initial purchaser, had entered into an agreement to purchase
160,000 Units, consisting of $160 million in principal amount of the
Company’s 13% Senior Notes due May 1, 2005 and Warrants to purchase
563,200 shares of common stock at $14.03 per share. The Initial Purchaser
has sold the offering in the United States to qualified institutional
buyers pursuant to Rule 144A. The Company intends to use the net proceeds
of the offering to expand its New York SuperPOP facility and to construct
and operate SuperPOPs in London and San Francisco. The Company also
intends to use the net proceeds of the offering to fund potential
acquisitions in its target markets. The Company will use the balance
of the net proceeds to increase its sales, marketing, technical and
administrative personnel and to fund working capital needs.
The Company will host a conference call to discuss financial results on Friday, May 15, 1998 at 8:30 A.M. Eastern Standard Time. For the United States, the number is 800-272-5652 and for overseas the number is 404-559-1161. The password is 5286#. The conference call will be rebroadcast at 2:00 P.M. Eastern Standard Time at the same phone numbers.
Bell Technology Group Ltd. provides complete Internet solutions for businesses in the New York region and is a premier provider for businesses seeking to effectively exploit the Internet by offering high-speed connections, web services, programming, design and integration. Bell Technology Group also develops and provides training to corporate and academic clients at its state-of-the-art computer and Internet training center and uses cutting-edge technology to develop sophisticated multimedia solutions.
Except for those statements that report the Company’s historical results, the statements being made are forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained under the heading of Risk Factors li
Bell Technology Group Ltd.
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
1998 1997 1998 1997
Revenues $ 4,351,607 $ 5,229,452 $9,091,174 $8,925,851
Costs and expenses:
Cost of revenues
(exclusive of
depreciation
expense shown
below) 2,744,070 4,101,810 5,857,968 6,847,094
Selling, general
and administrative 1,869,915 1,392,533 3,479,353 2,882,344
Depreciation and
amortization 264,359 139,624 506,219 296,090
Total costs and
expenses 4,878,344 5,633,967 9,843,540 10,025,528
Loss from operations (526,737) (404,515) (752,366) (1,099,677)
Interest income
(expense), net (62,326) 11,313 (118,310) 25,669
Loss before taxes (589,063) (393,202) (870,676) (1,074,008)
Provision for taxes -- -- -- --
Net loss $(589,063) $(393,202) $(870,676) $(1,074,008)
Basic net loss
per share ($0.17) ($0.13) ($0.25) ($0.35)
Basic weighted
average shares
outstanding 3,448,450 3,043,280 3,448,450 3,042,248
Bell Technology Group Ltd. and Subsidiaries
Consolidated Balance Sheets
March 31, Sept. 30,
Assets 1998 1997
(Unaudited)
Current assets:
Cash and cash equivalents $984,625 $ 2,401,446
Accounts receivable,
net of allowance for
doubtful accounts of
$272,986 and $194,684
as of March 31, 1998
and September 30, 1997,
respectively 2,857,387 3,259,548
Inventories 478,942 487,542
Prepaid expenses and
other current assets 324,199 727,765
Total current assets 4,645,153 6,876,301
Property and equipment, net 4,593,760 3,548,838
Long-term investment 325,000 325,000
Other assets 363,702 274,849
Total assets $9,927,615 $11,024,988
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $1,587,984 $ 2,001,157
Current portion of
notes payable 373,297 335,021
Accounts payable 2,554,362 2,010,507
Accrued expenses 184,623 425,852
Deferred revenues 87,599 123,046
Total current liabilities 4,787,865 4,895,583
Notes payable, less
current portion 807,407 923,217
Other long term liabilities 266,397 191,928
Total liabilities 5,861,669 6,010,728
Commitments and contingencies
Stockholders' equity :
Preferred Stock, $.01 par value;
500,000 shares authorized; no
shares issued and outstanding -- --
Common Stock, $.01 par value;
10,000,000 shares authorized;
3,448,450 shares issued and
outstanding 34,485 34,485
Additional paid-in capital 9,991,836 10,069,474
Accumulated deficit (5,960,375) (5,089,699)
Total stockholders' equity4,065,946 5,014,260
Total liabilities and
stockholders' equity $9,927,615 $11,024,988
