Global ePoint Reports Third Quarter 2005 Earnings; Third Quarter Revenue Increase 90%; Substantial Revenues From High Margin Proprietary Products and Services Anticipated During Fourth Quarter.CITY OF INDUSTRY, Calif. -- Global ePoint, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : GEPT GEPT General English Proficiency Test GEPT Global ePoint, Inc. (stock symbol) ), a developer of innovative security solutions for the aviation, homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States and law enforcement markets, announced today third quarter results for the period ended September September: see month. 30, 2005. The financial results include operations from the Company's Digital Technology, Aviation and Contract Manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . The Company reported revenue of $9.5 million, an increase of 90% over the $5.0 million recorded in the same period of 2004. The Company currently has a backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of contracts and orders exceeding $16 million mostly in high margin proprietary products and services from its Aviation division. The timely delivery of these orders exclusive of additional contracts will ensure the profitability of the division during the fourth quarter and at least the next two quarters. Global ePoint's continued investment in research and development and the increased costs associated with being a public company resulted in a net loss of $(1.9) million in the third quarter of 2005, compared to a net loss of $(1.2) million for the 2004's third quarter. Global ePoint had a net loss applicable to common stockholders of $(2.5) million or $(0.19) per share, compared to $(1.9) million or $(0.17) per share for the same period in 2004. The net loss applicable to common stockholders includes the quarter's operating net loss and non-cash dividends on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . For the nine months ended September 30, 2005, Global ePoint had revenue of $20.1 million, compared to $14.0 million in the first nine months of fiscal 2004. The increase in revenue was due to higher revenue from the Company's Perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. Digital and Aviation businesses, along with higher contract manufacturing revenue. Increased costs for research and development , sales, marketing and infrastructure costs related to the Perpetual Digital product line and the Aviation division resulted in a net loss of $(5.4) million for the first nine months of fiscal 2005, compared to a loss of $(3.1) million for the same period in fiscal 2004. The Company had a net loss applicable to common stockholders of $(7.3) million, or $(0.58) per share, compared to $(3.7) million, or ($0.34) per share for the nine months ended September 30, 2004. The 2005 net loss applicable to common stockholders is inclusive of inclusive of prep. Taking into consideration or account; including. the net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and a non-cash dividend on preferred stock of $2.0 million. "During the third quarter, we posted strong revenue gains in our contract manufacturing business. While we are pleased by the growth in the unit, we expect a shift toward higher margin products which will improve this unit's operating results," said Toresa Lou, Global ePoint's Chief Executive Officer. "In our Aviation Division, we were working against a very strong comparable year ago quarter, when we were busy completing Cockpit This article is about the flight deck of an aircraft. For other uses, see Cockpit (disambiguation). A cockpit is the area usually nearer the front of a piloted aircraft from which a pilot controls the aircraft. Door Surveillance Systems ("CDSS CDSS California Department of Social Services CDSS Clinical Decision Support Systems CDSS Country Dance and Song Society CDSS Canadian Down Syndrome Society CDSS Community Day Secondary Schools (Malawi) ") orders for our European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. customers," added Ms. Lou. "The later adoption of CDSS regulations here in the US has created a timing difference in when we expect that business to begin here. However, during the third quarter, the FAA issued its Notice of Proposed Rulemaking A notice of proposed rulemaking or NPRM is issued by law when a regulatory agency of the United States Federal Government wishes to add, remove, or change a rule (or regulation) as part of the rulemaking process. Outside the USA. ('NPRM') to require flight deck (1) The part of a magnetic tape unit that holds and moves the tape reels. The term may refer to any equipment that serves as a physical framework for electronic or mechanical devices. See rack. See also DEC. door surveillance systems, and we expect that systems will have to be installed in all US aircraft over a two year period, potentially beginning in early 2006." In its NPRM (Notice of Proposed Rule Making) An announcement by an agency of the U.S. government that proposes a change in regulations. It is followed up by a final ruling. , the FAA estimates the CDSS market to be worth $186 million in the US. We estimate the worldwide market including Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ,
Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , China, and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. to be more than double that amount. For
this market as well as other orders Global ePoint expects in the near
future, the Company began expanding its California-based facilities
during the third quarter. Early in October October: see month. , it opened a new Aviation
Division facility in Tulsa, Oklahoma Tulsa is the second-largest city in the state of Oklahoma and 45th-largest in the United States. With an estimated population of 382,872 in 2006,[1] it is the principal municipality of the Tulsa Metropolitan Statistical Area, a region of 897,752 residents projected to . During the third quarter, Global
ePoint's Aviation division received $11.8 million in new contracts.
.In our digital surveillance division," Ms. Lou continued, "we
launched a pilot program with the Chicago Police Department The Chicago Police Department, also known as the CPD, is the principal law enforcement agency of Chicago, Illinois, in the United States, under the jurisdiction of the city mayor. for our
wireless digital camera system, which is being tested as a replacement
for the analog tape system now in use. Despite this success, we had a
reduction of orders from one of our major customers in this division. We
anticipate these orders to be back on schedule.""With the CDSS and other proprietary aviation products and services we expect to improve the Company's margins which will drive profitability" remarked Ms. Lou. "During the fourth quarter and 2006, as more homeland security initiatives are implemented and as a range of industries, including financial, law enforcement, hospitality and aviation, convert to or add digital systems, Global ePoint has positioned itself to be a leader through its innovative solutions." Global ePoint designs, manufactures, sells and distributes digital video surveillance systems for the law enforcement, military, aviation and homeland security markets. On the cutting edge of digital technology, Global ePoint is developing new compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. technologies and next-generation, secure network digital video systems and servers for a wide range of new markets, concentrating primarily on security and homeland A homeland (rel. country of origin and native land) is the concept of the territory (cultural geography) to which an ethnic group holds a long history and a deep cultural association with —the country in which a particular national identity began. defense applications. The Company also manufactures customized computing computing - computer systems for industrial, business and consumer markets, as well as other specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. electronic products and systems. Complete vertical integration -- from design and manufacturing to sales and distribution -- allows the Company to capture efficiencies and maintain cost advantages in these growing markets, particularly homeland security. For more information, please visit http://www.globalepoint.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements include, but are not limited to whether the Company will continue to move toward profitability, whether additional homeland security initiatives are implemented, whether Global ePoint's technology will be used in other industries, and whether the company will complete key acquisitions. Such statements are subject to certain risks and uncertainties, and actual circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, whether government agencies pass additional homeland security initiatives, whether businesses decide to use digital surveillance technology and if so, whether they will choose Global ePoint's systems. Other risks include delays in the introduction of new products; further approvals of regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , and the Company's ability to obtain capital as and when needed. For a discussion of these and other factors that may cause actual events or results to differ from those projected, please refer to the Company's most recent annual report on Form 10-KSB and quarterly reports on Form 10-QSB, as well as other subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
For the three months ended September 30, 2005
($ in thousands)
Digital Contract
Technology Aviation Manufacturing
----------- --------- --------------
Net Sales $ 224 $ 707 $ 8,517
Cost of sales 154 450 7,857
----------- --------- --------------
Gross profit 70 257 660
Operating Expenses 878 561 742
----------- --------- --------------
Income (loss) from operations (808) (304) (82)
Other income (expense) 1 - 2
----------- --------- --------------
Income/(Loss) from operations $ (807) $ (304) $ (80)
=========== ========= ==============
Total assets as of
September 30, 2005 $ 3,761 $ 6,210 $ 12,495
=========== ========= ==============
For the three months ended September 30, 2004
Digital Contract
Technology Aviation Manufacturing
----------- --------- --------------
Net Sales $ 447 $ 946 $ 3,606
Cost of sales 280 627 2,958
----------- --------- --------------
Gross profit 167 319 648
Operating Expenses 768 627 584
----------- --------- --------------
Income (loss) from operations (601) (308) 64
Other income (expense) (18) - 2
----------- --------- --------------
Income/(Loss) from operations $ (619) $ (308) $ 66
=========== ========= ==============
Total assets as of
September 30, 2004 $ 2,699 $ 5,197 $ 6,726
=========== ========= ==============
For the nine months ended September 30, 2005
Digital Contract
Technology Aviation Manufacturing
----------- --------- --------------
Net Sales $ 966 $ 1,493 $ 17,641
Cost of sales 649 1,060 15,433
----------- --------- --------------
Gross profit 317 433 2,208
Operating Expenses 2,752 1,634 2,202
----------- --------- --------------
Income (loss) from operations (2,435) (1,201) 6
Other income (expense) 4 - 1
----------- --------- --------------
Income/(Loss) from operations $ (2,431) $ (1,201) $ 7
=========== ========= ==============
Total assets as of
September 30, 2005 $ 3,761 $ 6,210 $ 12,495
=========== ========= ==============
For the nine months ended September 30, 2004
Digital Contract
Technology Aviation Manufacturing
----------- --------- --------------
Net Sales $ 727 $ 1,605 $ 11,649
Cost of sales 459 1,029 9,317
----------- --------- --------------
Gross profit 268 576 2,332
Operating Expenses 1,935 1,155 2,198
----------- --------- --------------
Income (loss) from operations (1,667) (579) 134
Other income (expense) (20) - (3)
----------- --------- --------------
Income/(Loss) from operations $ (1,687) $ (579) $ 131
=========== ========= ==============
Total assets as of
September 30, 2004 $ 2,699 $ 5,197 $ 6,726
=========== ========= ==============
For the three months ended September 30, 2005
($ in thousands)
Corporate Total
---------- -------
Net Sales $ - $ 9,448
Cost of sales - 8,461
---------- -------
Gross profit - 987
Operating Expenses 699 2,880
---------- -------
Income (loss) from operations (699) (1,893)
Other income (expense) 16 19
---------- -------
Income/(Loss) from operations $ (683) $(1,874)
========== =======
Total assets as of September 30, 2005 $ 5,795 $28,261
========== =======
For the three months ended September 30, 2004
Corporate Total
---------- -------
Net Sales $ - $ 4,999
Cost of sales - 3,865
---------- -------
Gross profit - 1,134
Operating Expenses 371 2,350
---------- -------
Income (loss) from operations (371) (1,216)
Other income (expense) - (16)
---------- -------
Income/(Loss) from operations $ (371) $(1,232)
========== =======
Total assets as of September 30, 2004 $ 4,742 $19,364
========== =======
For the nine months ended September 30, 2005
Corporate Total
---------- -------
Net Sales $ - $20,100
Cost of sales - 17,142
---------- -------
Gross profit - 2,958
Operating Expenses 1,754 8,342
---------- -------
Income (loss) from operations (1,754) (5,384)
Other income (expense) 16 21
---------- -------
Income/(Loss) from operations $ (1,738) $(5,363)
========== =======
Total assets as of September 30, 2005 $ 5,795 $28,261
========== =======
For the nine months ended September 30, 2004
Corporate Total
---------- -------
Net Sales $ - $13,981
Cost of sales - 10,805
---------- -------
Gross profit - 3,176
Operating Expenses 1,063 6,351
---------- -------
Income (loss) from operations (1,063) (3,175)
Other income (expense) 145 122
---------- -------
Income/(Loss) from operations $ (918) $(3,053)
========== =======
Total assets as of September 30, 2004 $ 4,742 $19,364
========== =======
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