NetSol Achieves 50%
Increase in Net Revenues
Najeeb Ghauri |
Calabasas, CA: NetSol Technologies,
Inc., "NetSol" (NASDAQ:NTWK), a multinational
provider of enterprise software and services for equipment
financing, has announced financial results for its fiscal
year end, June 30, 2006.
"Fiscal year 2006 was an exciting time in the history
of NetSol and significant in our success was the support
of our long-term investors and business partners,"
said NetSol CEO Naeem Ghauri. "In year over year comparables,
the company's projected increase in net revenues is a positive
indicator that our September 11, 2006 fiscal year 2007 guidance
of approximately $30 million, a 60 percent increase in revenue
growth, is on target."
In fiscal year 2006, NetSol successfully integrated one
acquisition in the UK, completed the acquisition of Silicon
Valley-based McCue Systems, dramatically expanded the company's
global footprint, and development center, NetSol Technologies,
Ltd., achieved the rare honor of a CMMI Level 5 rating by
the Carnegie Mellon University Software Engineering Institute,
a gold standard placing NetSol in a very selective group
of 100 preferred global software providers.
"The financial challenge of investing in global growth
inevitably shows a reflection on certain aspects of a company's
bottom line," commented NetSol CFO Tina Gilger. "Considering
the time and resources spent on the following activities
during the year, our acquisition of McCue Systems and CQ
Systems, a natural disaster in one of our key operating
areas in the second quarter, the hiring of more than 90
technical personnel, the creation of five new business divisions
and, the opening of several new sales offices in emerging
markets including the Peoples Republic of China, we remain
very confident in our September guidance for strong revenue
growth and improved margins in 2007."
"The normal encumbrances of organic growth and the
brand awareness campaigns for NetSol-UK and NetSol-US combined
with the expenses associated with enhancement procurements
for the infrastructure of new operations, including our
newly acquired development centers of CQ Systems in the
UK, and McCue Systems in the US, a support team in Beijing,
China, and Adelaide, Australia, have produced some predictable
short-term losses," said CFO Gilger. "The additional
costs of maintaining our corporate governance at the highest
standard through training and increased third party audits
were also expected in positioning the company as a true
global provider."
2006 Fiscal Year End Highlights:
• Net revenues for the year ended June 30, 2006 were
$18,690,412, as compared to $12,437,653 for the year ended
June 30, 2005, an approximate 50 percent increase in net
revenues year over year.
• Gross profit was $9,669,894 for the year ended June
30, 2006, as compared to $7,682,904 for the fiscal year
2005, a 26 percent increase in year over year comparables.
• Legacy applications: As the company sells more software
licenses; management believes it is possible that the margins
could increase as high as 70 percent.
• The cash payment of $1,968,339 to CQ Systems' shareholders
for the final payment of the acquisition was made on July
5, 2006.
"The dedication of NetSol management and financial
resources in fiscal 2006 to grow beyond a regional presence
in several countries to an enterprise provider that can
service customers anywhere in the world has been a substantial
task," said NetSol Technologies Chairman, Najeeb U.
Ghauri, "Having gained our new, hard-earned status
in the world marketplace, we are now committed in fiscal
2007 to a solidification of our assets and a refinement
of our operations that will increase profitability and shareholder
value. NetSol is now a global solution provider, with regional
solutions for our customers in North America, Europe and
Asia Pacific.
"NetSol is a strategic business partner for DaimlerChrysler
Financial Services, which accounts for approximately 11
percent and 20 percent of revenue for our fiscal year end
of 2006 and 2005, respectively, and Toyota Leasing which
accounts for approximately 12 percent and 35 percent of
revenue for our fiscal year end of 2006 and 2005, respectively,"
continued Chairman Ghauri. "While increasing our revenues
from these partners year over year, the acquisitions of
CQ Systems and McCue Systems have provided NetSol with a
wide diversification of customers that further secures our
business and makes us less dependent on any single partner
to produce revenues and income.”
2006 Year to Date Highlights for NetSol:
• NetSol Chairman Najeeb U. Ghauri rings closing bell
at NASDAQ before global audience.
• NetSol featured in Lehman Brothers analytical Computer
Services Sector Report of August 15, 2006.
• NetSol integrates LeasePak at City National Bank.
• NetSol implements end to end LeaseSoft solutions
at Toyota Leasing Thailand and signed a new license agreement
with Toyota and Daimler offices in China.
• NetSol received coveted Level 5 rating by the Carnegie
Institute honoring the company as a global preferred software
provider. Less than 100 companies in the world have achieved
this distinction including IBM, GE, and Microsoft.
• NetSol expands operations to include: the Peoples
Republic of China, the United Kingdom, the United States,
Pakistan, and penetrates new markets in South Africa, Europe,
and the Asia-Pacific rim.
• NetSol Technologies, Ltd. in Pakistan launched five
new divisions to leverage its position and gain from the
expansion of IT services due to privatization and economic
growth.
• NetSol founders purchase shares of stock in the
open market.
• NetSol acquires McCue Systems in the US
• NetSol integrates CQ Systems acquisition of 2005
into daily operations
• NetSol assembles a formidable and highly seasoned
management team across the globe both through acquisitions
and new hiring
• NetSol attracted five new institutional investors
representing approximately15 percent ownership in the company.
• NetSol's Technology Campus, inaugurated in Lahore,
Pakistan in May 2004, which consists of 50,000 square feet
of computer and general office space dedicated for IT and
software development (the first of its kind in Pakistan),
signed a strategic alliance agreement with the IT ministry
of Pakistan to convert the technology campus into a technology
park.
About NetSol Technologies, Inc.
NetSol Technologies is a U.S.-based multinational provider
of enterprise software and services for equipment finance.
Headquartered in Calabasas, CA, NetSol Technologies, Inc.
operates on a global basis with locations in the U.S., Europe,
East Asia and Asia Pacific, including: London, Los Angeles,
San Francisco, Sydney, Beijing, Toronto, and Lahore, Pakistan.
The Netsol family of products includes: the LeaseSoft Contract
Management System, LeaseSoft Credit Application Processing,
LeaseSoft Wholesale Finance System, LeaseSoft Premium Finance
System, LeaseSoft EPO system, and the LeasePak system. NetSol
clients include: Motorola, CitiGroup, BMW, Toyota, Yamaha,
Quest Communications, and Investec. Netsol's largest customer:
Daimler-Chyrsler Services, a division of Daimler-Chrysler,
the worlds' fifth largest carmaker, ranks NetSol as a preferred
vendor in 40-plus countries.
NetSol Technologies helps its clients identify, evaluate
and implement technology solutions to meet their strategic
business challenges and maximize their bottom line. By utilizing
its worldwide resources, NetSol Technologies delivers high-quality,
cost-effective equipment finance portfolio management solutions
and IT services ranging from consulting and application
development to systems integration and outsourcing. NetSol
Technologies' commitment to quality is demonstrated by its
achievement of both ISO 9001 and SEI (Software Engineering
Institute) CMMl (Capability Maturity Model) Level 5 assessment.
For more information, visit NetSol Technologies' web site
at www.netsoltek.com.
CONTACTS:
Investor Relations Counsel:
Marty Tullio
McCloud Communications, LLC
949.553.9748
marty@McCloudCommunications.com
NetSol Technologies Inc:
Najeeb U. Ghauri, Chairman, or Tina Gilger, CFO
818.222.9195
najeeb@netsoltek.com
tina@netsoltek.com
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