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(Nasdaq: PACT)Fourth Quarter Revenues Increased 33% and Net Income Increased 106% on a Year-over-Year Basis

HONG KONG, April 17 /Xinhua-PRNewswire/ -- PacificNet Inc. (Nasdaq: PACT),
a leading provider of CRM and telemarketing services, call center, Interactive
Voice Response (IVR) and Value-Added Services (VAS) in China, today reported
unaudited results for the fourth quarter and fiscal year ended December 31,
2005.

Q4 2005 Highlights (in US dollars)

-- Quarterly revenues of $13,368,000 represented an increase of 33% as
compared to $10,068,000 from Q4 2004; or a sequential increase of 25%
as compared to $10,722,000 from Q3 2005.
-- Quarterly gross profit was $4,833,000, a significant increase of 181%
as compared to $1,718,000 from Q4 2004; or a significant increase of
143% as compared to $1,989,000 from Q3 2005; For reference, our Q3
gross profit was $1,989,000, an increase of 45% as compared to
$1,372,000, from Q3 2004; Q2 and Q1 gross profit was $2,215,000 and
$1,650,000, an increase of 71% and 32% as compared to $1,295,000 and
$1,249,000 from Q2 and Q1 2004 respectively.
-- Quarterly operating profit was $1,617,000, an increase of 58% as
compared to $1,026,000 from Q4 2004; or an increase of 57% as compared
to $1,027,000 from Q3 2005.
-- Quarterly net income of $918,000, or $0.09 per basic share, or $0.08
per diluted share, represented an increase of 106% as compared to net
income of $446,000, or $0.06 per diluted share in Q4 2004; or an
increase of 50% as compared to net income of $611,000, or $0.05 per
share, from Q3 2005; This met the top range of the Company's latest
earnings projection of $0.07 to $0.09 per share. Our Q4 results also
included several one-time charges or expenses such as the $103,250
NASDAQ National Market Entry Fee.
-- Cash and cash equivalents were $10,137,000 as of December 31, 2005,
compared to $6,764,000 at the end of fiscal 2004.
-- Equity per share of $3.04 and cash per share of $0.95 as of December
31,
2005, as compared to $2.96 and cash per share of $0.47 as of September
30, 2005 respectively.
-- Quarterly revenues of $6,311,000, $11,017,000, and $2,013,000; and
operating profit of $432,000, $1,205,000, and $12,000 were generated
from the Company's three business units: (1) Outsourcing, (2) VAS and
(3) Communications, respectively. This compares to revenues of
$3,362,000, $2,546,000, and $4,678,000; and operating profit of
$323,000, $1,171,000, and $102,000, respectively for Q3 2005.
-- Continued profitability in each of the acquired subsidiaries and
investments: YueShen, Epro, Linkhead, Smartime, 3G, Clickcom and
ChinaGoHi.
-- Number of employees in China reached approximately 2,500.
-- Expanded presence in China with offices in Hong Kong, Beijing,
Shenzhen,
Guangzhou, and VAS branch offices in 26 provinces in China including
Guangdong, Guangxi, Hubei, Hunan, Jiangsu, Zhejiang, Shanghai, Henan,
Anhui, Yunnan, Gansu, Ningxia, Inner Mongolia, Guizhou, Tianjin,
Qinghai, Hainan, Heilongjiang, Shanxi, Shandong, Chongqing, Jiangxi,
Beijing, Hebei, Liaoning, and Jilin.

Financial Results of Fiscal Year Ended December 31, 2005
-- Revenues of $43,975,000, an increase of 48% as compared to $29,709,000
from 2004.
-- Gross profit of $10,687,000, an increase of 90% as compared to
$5,635,000 from 2004.
-- Operating profit of $4,484,000, an increase of 131% as compared to
$1,937,000 from 2004.
-- Net income of $2,537,000, or $0.25 per basic share, or $0.24 per
diluted share, as compared to net profit of $774,000, or $0.11 per
basic share, or $0.10 per diluted share in 2004. This met the top range
of the Company's latest earnings projection of $0.23 to $0.25 per
share.
-- Revenues of $13,297,000, $13,648,000 and $13,153,000; and Operating
profit of $1,385,000, $3,660,000 and $302,000 were generated from the
company's three business units: (1) Outsourcing Business, (2) VAS
Business, and (3) Communications Distribution Business, respectively.
-- These results were consistent with the increase in guidance the Company
provided in a news release on November 15, 2005 when it raised
financial targets for its fourth quarter and year-ended December 31,
2005.

2006 Business Outlook
-- For fiscal year 2006, the Company expects that total revenues will be
between $60 and $70 million.
-- For fiscal year 2006, the Company expects that net income will be
between $4.5 and $5.2 million, or about $0.41 to $0.50 per share.
-- For Q1 2006, the Company expects that total revenues will be between
$13 and $14 million.
-- For Q1 2006, the Company expects that net income will be between
$700,000 and $900,000, or about $0.07 to $0.09 per share.
-- The results variance between Q4 2005 and Q1 2006 is due to seasonal
fluctuations in quarterly performance. Traditionally, the first quarter
from January to March is a low season due to the long Lunar New Year
holidays in China. Revenue and income from operations tend to be higher
in the fourth quarter due to year-end holiday promotions.
-- For Q2 2006, the Company expects that total revenues will be between
$14 and $15 million.
-- For Q2 2006, the Company expects that net income will be between $1.0
million and $1.2 million, or about $0.10 to $0.12 per share.
-- PacificNet's strategy in 2006 is to capture market share and top-line
growth in the VAS, IVR and CRM market in China while enhancing profit
margins.
-- The Company expects continued revenue and profit growth in 2006 through
organic growth and accretive acquisitions in the VAS, IVR and CRM
market in China.

PacificNet's Form 10K and other filings with the SEC.
Contact:

PacificNet USA office: Jacob Lakhany, Tel: [phone]
PacificNet Beijing office: Ada Yu, Tel: [phone] ext 158
23/F, Tower A, TimeCourt, No.6 Shuguang Xili, Chaoyang District,
Beijing, China 100028

CEOcast, Inc. for PacificNet
Ed Lewis, 212-732-4300

SOURCE PacificNet Inc.

Jacob Lakhany of PaficNet, [phone]
17Apr06 11:59 GMT
Symbols:
de;CV7 de;CV7F de;CV7S de;CV7X us;PACT
Source PRN PR Newswire