Intac (NASDAQ:INTN)
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INTAC International Announces Strong Second Quarter 2004 Earnings
HONG KONG, Aug. 4 /PRNewswire-FirstCall/ -- INTAC International, Inc. (Nasdaq:
INTN; FSE: WKN 805768), an Internet content provider in China providing Chinese
students exclusively with a full-range of career development services through
its joint venture with China's Ministry of Education, Beijing Intac Purun
Educational Development Ltd. ("Intac Purun"), and its Internet portal,
Joyba.com (http://www.joyba.com/ ), today announced strong earnings for the
three and six months ended June 30, 2004.
Revenues for the three and six months ended June 30, 2004 were $22.8 million
and $31.2 million, respectively, compared to $26.2 million and $34.2 million
for the same periods last year. Gross profit increased by $1.2 million to $2.3
million for the three months ended June 30, 2004 from $1.1 million for the same
quarter in 2003. Gross profit increased by $1.4 million to $2.7 million for
the six months ended June 30, 2004 from $1.3 million for the same period in
2003. The gross margin increased by 6.0% to 10.2% for the three months ended
June 30, 2004 from 4.2% for the same quarter in 2003. The gross margin
increased by 4.7% to 8.6% for the six months ended June 30, 2004 from 3.9% for
the same period in 2003.
Income from operations increased by $601,000 to $807,000 for the three months
ended June 30, 2004 from $206,000 for the same quarter in 2003. Income from
operations increased by $451,000 to $165,000 for the six months ended June 30,
2004 from a loss from operations of ($286,000) for the same period of 2003.
Income (loss) before income taxes for the three and six months ended June 30,
2004 was income of $1 million and $483,000, respectively, compared to income of
$224,000 and a loss of ($268,000) for the same periods last year.
Net income increased by $649,000 to $873,000 ($0.04 per share) for the three
months ended June 30, 2004 from $224,000 ($0.01 per share) for the same quarter
in 2003. Net income increased by $622,000 to $354,000 ($0.02 per share) for
the six months ended June 30, 2004 from a net loss of ($268,000) (negative
$0.01 per share) for the same period in 2003.
The decrease in revenues for the three and six months ended June 30, 2004 is
attributable to concentrating on higher margin wireless handset products for
profitability as opposed to sales volume. Also, we focused our time, resources
and management on our career development joint venture with China's Ministry of
Education, Intac Purun, and its Internet portal, Joyba.com, in China. The
improvement in profitability in the second quarter of 2004 is primarily
attributable to greatly improved gross margins without a proportionate increase
in operating expenses. Our income from operations for the three and six months
June 30, 2004 included net operating costs of approximately $409,000 and
$637,000, respectively, relating to the Internet portal business. Excluding
these additional costs relating to Intac Purun, operating results would have
improved even further in comparison to the same periods in 2003.
"This has been a record quarter for our Company," said Wei Zhou, Chairman and
CEO of INTAC. "With Intac Purun starting to generate revenue and the greatly
improved profit margins from our distribution business, we feel confident that
we can achieve our anticipated results in 2004. Our emphasis for the remainder
of 2004 and beyond will be on the comprehensive career development services
provided through Joyba.com and the student guidance through our Career Service
Centers."
"Our hard work is paying off," said J. David Darnell, Senior Vice President and
Chief Financial Officer. "Even with the negative impact of start-up costs
associated with our Internet portal business, we have managed a record
quarter."
The Company's annual report on Form 10-KSB for the year ended December 31, 2003
and quarterly report on Form 10-Q for the quarter ended March 31, 2004 may be
viewed at the SEC's website http://www.sec.gov/ .
About INTAC International, Inc.
INTAC International, Inc. is focused on the exploitation of strategic business
opportunities available in China and the Asia-Pacific Rim. INTAC is refocusing
its business plan from the traditional distribution of premium brand wireless
handsets to Beijing Intac Purun Educational Development Ltd., its new Internet
portal business in mainland China. INTAC maintains offices in China (Hong
Kong, Beijing and Tianjin), Germany (Frankfurt) and the United States (Dallas).
Forward-Looking Statements
This press release contains certain "forward-looking statements." Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements
expressed or implied by such forward-looking statements to differ materially
from those projected or implied. Factors that could cause or contribute to
such differences include, among other things: changes in general business
conditions; the impact of competition in our industry, especially in the Asia-
Pacific Rim; the fact that we are an early stage company with an unproven
business model; our need for additional working capital, particularly to the
extent that we are able to locate a suitable business opportunity; the added
expense structure assumed by us as a U.S. public company; political and
economic events and conditions in jurisdictions in which we operate; PRC
Internet laws and regulations that are unclear and will likely change in the
near future; restrictions on foreign investment in the PRC Internet sector that
are imposed by the PRC government; the PRC government that may prevent us from
distributing; regulation and censorship of information distribution in China
which may adversely affect our business; political and economic policies of the
PRC government; the risk of the loss of the agreements, or the exclusivity
terms, with the Education Management Information Center; the high cost of
Internet access that may limit the growth of the Internet in China and impede
our growth; advertising and e-commerce customers that have only limited
experience using the Internet for advertising or commerce purposes; the
acceptance of the Internet as a commerce platform in China which depends on the
resolution of problems relating to fulfillment and electronic payment; concerns
about security of e-commerce transactions and confidentiality of information on
the Internet that may increase our costs, reduce the use of our Internet portal
and impede our growth; our network operations that may be vulnerable to
hacking, viruses and other disruptions, which may make our products and
services less attractive and reliable; changes in interest rates, foreign
currency fluctuations and capital market conditions; and other factors
including those detailed under the heading "Business Risk Factors" and
elsewhere in the Company's annual report on Form 10-KSB for the year ended
December 31, 2003 and quarterly report on Form 10-Q for the quarter ended March
31, 2004, as filed with the Securities and Exchange Commission. We disclaim
any intention or obligation to revise any forward-looking statements whether as
a result of new information, future events or otherwise. INTAC undertakes no
obligation to update any forward-looking statements made in this media release.
Contact: J. David Darnell, Senior Vice President and Chief Financial Officer,
469-916-9891, for further information.
DATASOURCE: INTAC International, Inc.
CONTACT: J. David Darnell, Senior Vice President and Chief Financial
Officer of INTAC International, Inc., +1-469-916-9891
Web site: http://www.intac.cn/
http://www.joyba.com/
http://www.sec.gov/