10K filed after the market close. There is a lot of information and it will take awhile to get through everything. Hopefully they will put out a PR tomorrow. In summary, revenues were way up and net loss was down to $0.06 from $0.13 the year prior. It probably isn't going to run straight to $0.25 per share on this report, but I think it could easily see $0.10 with a PR that emphasizes future growth and improved profitability.
GLTA,
Murocman
Have excerpted operations info below:
Results of Operations
Full Year Ended December 31, 2007 Compared to Full Year Ended December 31, 2006
Revenue and Operating Expenses
Net revenue for the Company’s Processing Business Unit totaled $748,465 for the year ended December 31, 2007 as compared to $188,251 for the year ended December 31, 2006, an increase of $560,214 or 298%. The increase was primarily resulted from net revenue of $644,856 generated by the Company’s new subsidiary, Cardtrend Systems. The corresponding cost of sales was $344,239 for the year ended December 31, 2007 and $55,798 for the same corresponding period in 2006. Gross margin for the year ended December 31, 2007 was approximately 54%, while gross margin for the same corresponding period in 2006 was approximately 70%. The gross margin was lower because the effect of inclusion of lower gross margin revenue from Cardtrend Systems which is within the expectation of the Company.
Net revenue for the Company’s Prepaid Business Unit totaled $978,927 for the year ended December 31, 2007 as compared to $158,487 for the year ended December 31, 2006. This revenue was generated from the Company’s two subsidiaries in Malaysia. The Company did not have Prepaid Business Unit until December 1, 2006. The corresponding costs of sales and discounts given to the Company’s dealers totaled $963,342 for the year ended December 31, 2007 as compared to $155,885 for the year ended December 31, 2006. Gross profit for the year ended December 31, 2007 was $15,585 as compared to $2,602 for the year ended December 31, 2006, giving rise to a gross margin of about 1.59% and 1.64%, respectively.
The Company did not record any revenue or income from the Cards Business Division for the year ended December 31, 2007 and year ended December 31, 2006 as there were no dividends received from the Company’s associated companies in Malaysia, in each of which the Company owns 20% equity interest of these associated companies.
On a consolidated basis, the Company’s net revenue for the Company for the year ended December 31, 2007 totaled $1,727,392, as compared to $346,738 for the year ended December 31, 2006, an increase of about 398%. The corresponding total costs of sales were $1,307,581 as compared to $211,683 for the same corresponding period in 2006, an increase of about 518%. The total gross profit recorded by the Company was $419,811 for the year ended December 31, 2007 as compared to $135,055 for the year the year ended December 31, 2006, an increase of about 211%.
The increases on a consolidated basis were due to principally by the inclusion of Cardtrend Systems’ and other Malaysian subsidiaries’ revenues for the entire 12 months (as compared to two months for 2006) following the acquisitions. This additional net revenue from Cardtrend Systems and other Malaysian subsidiaries totaled $1,612,880, as compared to $275,888 in 2006. Revenues not related to the businesses acquired in 2006 totaled $114,512, as compared to $70,850 in 2006, an increase of approximately 62% over 2006. Cost of sales in 2007 was $1,307,581 as compared to $211,683 in 2006, an increase of about 518%. Gross profit from the acquired companies amounted to $321,836 in 2007 as compared to $87,706 in 2006, an increase of 267%, and gross profit from business not related to the businesses acquired in 2006 amounted to $97,975 in 2007 as compared to $47,349 in 2006, an increase of 107%.
The Company incurred total operating expenses of approximately $3,116,086 in 2007, as compared to $4,440,273 in 2006. The decrease of operating expenses in the amount of $1,324,187 (or approximately 30%) was primarily contributed by the decrease in the stock based compensation of $1,961,940, which is off-set by an increase of $454,397 in Selling, General and Administrative expenses and an increase of $183,356 in Depreciation and Amortization of Property, Plant and Equipment.
Financing expense for the full year ended December 31, 2007 was approximately $666,063, as compared to $257,861 for the same corresponding period in 2006, an increase of 158%. This increase was due to the interest and intrinsic values of the convertible loans obtained in 2007 in the amount of $805,000 with an interest rate of 10% per annum, as compared to a total of $710,000 convertible loans obtained in 2006 which were all converted to common shares of the Company as at October 31, 2006, mostly within 30 days from the date of each of the loan agreements. The interest amount for the convertible loans totaled $39,621 in 2007 as compared to $25,541 in 2006, an increase of 55%, whereas the expensed intrinsic values of the conversion features of all the convertible loans obtained in 2007 totaled $628,476 as compared to $232,320 for those loans obtained in 2006, an increase of 171%.
For the fiscal year ended December 31, 2007, we recorded a loss from equity investment of RM400,000 (approximately $105,263),our equity investment basis incurred by Synergy Cards Sdn. Bhd., a company in Malaysia which we have a 20% equity stake as at December 31, 2007. Synergy card has incurred losses since inception however our losses are limited to our investment Synergy Cards, incorporated in late 2005, has obtained the approval from the Central Bank of Malaysia in the middle of 2006 to conduct the credit card business under the Payment Systems Act. It has also obtained the licenses from both MasterCard Worldwide and Visa International to issue its credit cards using such brands. Currently, it is in its final stages of preparation for the launch of its credit card business.
Net loss for the year ended December 31, 2007 was $3,098,535 as compared to $4,892,464 for the year ended December 31, 2006, a reduction in net loss of $1,793,929 (or approximately 37%). This decrease was mainly due to an increase in revenue (and hence gross profit) and a reduction in operating expenses.
