For the quarter ended March 31, 2004, Hartcourt reported record total revenues of $67.7 million, an increase of 1,083% from $5.7 million reported in the same period in 2003 and an increase of 54% from $43.9 million reported in the previous quarter.
The Company reported a net profit of US$57,842, compared to the previous quarter's net loss of US$1,549,155. This loss was principally due to provision for the SEC lawsuit, which are non-operating related. The same quarter of 2003 had a net loss of US$186,916.
Revenues from IT distribution and retailing business for the quarter were US$67,723,105, representing a 54% increase over the previous quarter's US$43,897,565. The increase was the result of the consolidation of three months' operations of Challenger in the quarter ended March 31, 2004, and internal growth due to strong market demand.
Gross profit for the quarter were US$3,518,259, an increase of 79% over the previous quarter of US$1,970,767 and 799% over US$391,484 in the same period in 2003. The gross margin also increased from 4.5% in the previous quarter to 5.2% in this quarter.
Total operating expenses for the quarter were US$2,682,562, compare to the previous quarter of US$1,678,513 and US$474,311 from the corresponding period in 2003. This increase was largely due to the consolidation of three months' operational results of Challenger.
Total operating profit for the quarter was US$835,697, representing an improvement of 186% over last quarter's operating profit of US$292,253. The Company had an operating loss of US$82,827 in the same quarter in 2003.
Total net profit for the quarter (after minority interests and income tax) was US$57,842, comparing to the net loss of US$1,549,155 for the previous quarter and US$186,916 for the corresponding period in 2003.
As of March 31, 2004, the Company's total cash balance was US$6,837,164, an increase of 175% over previous quarter of US$2,486,103.
Carrie Hartwick, President and CFO, comments, "As Hartcourt consolidates the fragmented industry and bringing together a group of complementary businesses with strong regional foothold, we will continue to focus on extracting additional value from our businesses by integrating the customer platform further. Stronger profitability, gross margin and financial discipline will certainly guide our thinking while we look for additional opportunities as well as managing our existing divisions."
About Hartcourt
The Hartcourt Companies, Inc. is one of China's fastest growing companies in the IT distribution sector. Hartcourt's growth strategy is to acquire controlling interests in profitable IT companies with proven management in key geographical areas of China with high GDP growth. Hartcourt aims to provide capital access, financial control and governance, management talents, cross company synergies, and expansion strategies to help these companies to achieve higher operating efficiencies and to outgrow the market. IDC predicts that the IT hardware spending will grow at over 18% in China for the next 5 years. Hartcourt's divisions include a number of key IT distribution and retail companies covering major regions of China with high GDP-per-capita. Detailed information on Hartcourt can be obtained from: www.hartcourt.com.
Forward-looking statements
The statements made in this press release, which are not historical facts, contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update information contained in any forward-looking statement.
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