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eSAT Inc. Announces 1999 Year End Results And Summary of Business; eSAT Transitions Business to Service Provider Model With Significant Funding And Limited Debt March 31, 2000 11:17 AM EST FOUNTAIN VALLEY, Calif.--(BUSINESS WIRE)--March 31, 2000--eSAT Inc. (OTCBB: ASAT)(FRANKFURT: ES8), a satellite broadband service provider, Friday announced financial results for the year ended Dec. 31, 1999. eSAT reported net income in 1999 of $73,199,401 and posted a restated net loss of $93,481,185 for 1998. The restatement of 1998 is due to the correct application of APB 25 resulting in a non-cash compensation expense of $90,754,014 with a corresponding reversal of $81,945,112 in 1999. Earnings for 1999 were $3.42 per share (diluted) as compared with a loss of $5.81 per share (diluted) in 1998. "As we look back on 1999, we see a year in which eSAT changed its business direction and strategy from a single product company to a service company offering three forms of satellite and data delivery services," stated Michael Palmer, chief executive officer. "In addition to our greatly improved GSI (Global Satellite Internet) gateway, eSAT now offers services through its ChannelCasting(TM), point to multi-point broadcast capability and its bi-directional Nexstream(TM) service. eSAT has also found significant interest in providing bi-directional satellite services to the business continuity market for back-up to fiber networks. As a result of these changes, our channel of distribution was redirected to include value added resellers capable of providing and supporting our solution driven services and incorporating them into customer oriented value propositions. "In the year 2000, we expect significant growth resulting from the solid foundation we built in 1999. The first Nexstream product was successfully tested, shipped, and installed during the fourth quarter of 1999. We are now ramping up our delivery capabilities to meet the level of sales which current customer indications require. We believe sales will further be enhanced by an agreement, which is scheduled to be concluded in April, among the chief executive officers of Innostar Hi-Tech Enterprise Ltd., Hartcourt and eSAT which will create a joint undertaking and implementation of a plan for broadband services to the largest cities in mainland China. Additionally, eSAT has concluded a service agreement with Hutchinson Corporate Access (HK) Ltd., a subsidiary of Hutchinson Whampoa Limited, which will enable eSAT to begin offering Pan-Asian services almost immediately. "Discussions are currently underway with Korean partners to provide joint services throughout Korea. By implementing an uplink facility in Hong Kong and Seoul, eSAT will be in prime position to realize its goals in the Pacific Rim. eSAT also has plans to build an additional Network Operations Center in Los Angeles to provide global satellite services across the Pacific. In addition, discussions are underway with several companies in Europe to link to eSAT`s Network Operations Center in North Carolina providing the same services across the Atlantic. Our recent funding, combined with the fact the company has little debt, should put the company in a solid position to take advantage of our early entry into the broadband services market which is expected to grow to $30 billion in the next few years," added Palmer. About eSAT Inc. eSAT is a broadband service provider for businesses, educational, and government institutions via satellite. The company`s core products provide Internet access and networking services through its Global Satellite Internet (GSI(TM)) gateway and its recently introduced, Nexstream(TM), with bi-directional communications. eSAT`s Nexstream(TM) provides organizations with an untethered, secure, transportable, cost-effective communications solution for facilities anywhere regardless of communications infrastructure. Additional, eSAT`s ChannelCasting(TM) (IP multicasting) provides delivery for consistent, accurate, secure and reliable content instantaneously within an eSAT Virtual Private Network (VPN) or Private Network (PN). Information about eSAT is available by calling 888/895-0007 or by visiting www.esatinc.com. Certain statements in this news release may constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks, uncertainties, and other factors, which may cause the actual results, performance, or achievement expressed or implied, by such forward-looking statements to differ. -0- ESAT INC. REPORTS FISCAL 1999 YEAR END RESULTS AND RESTATEMENTS OF 1998 YEAR END RESULTS ESAT INC. CONSOLIDATED STATEMENTS OF INCOME Restated 1999 1998 SALES $ 423,640 $ 341,047 COST OF SALES 1,432,717 685,570 Gross margin (1,009,077) (344,523) GENERAL AND ADMINISTRATIVE EXPENSES 7,916,819 2,613,468 Loss from operations (8,925,896) (2,957,991) OTHER INCOME (EXPENSE) Compensation adjustment recognized under APB 25 81,945,112 (90,754,014) Other income 149,684 -- Interest income 57,158 -- Gain on sale of assets 675 -- Interest expense (25,730) (11,371) 82,126,899 (90,765,385) Income (loss) before income taxes and extraordinary income 73,201,003 (93,723,376) PROVISION FOR INCOME TAXES 1,600 800 Income (loss) before extraordinary income 73,199,403 (93,724,l76) EXTRAORDINARY INCOME -- 242,990 Net income (loss) $73,199,403 $(93,481,186) EARNINGS PER COMMON SHARE: Income (loss) before extraordinary income $ 4.02 $ (5.83) Net income $ 4.02 $ (5.81) EARNINGS PER COMMON SHARE: - ASSUMING DILUTION: Income (loss) before extraordinary income $ 3.43 $ (5.83) Net income $ 3.43 $ (5.81) *T |
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