Hartcourt Companies (fka HRCT)

[asia]

OT: UTStarcom Reports Record Quarterly Results


Positive Cash Flow from Operations $83.3 million and Record Low DSO''s of 61 Days for the Quarter

ALAMEDA, Calif., Oct. 17 /PRNewswire-FirstCall/ -- UTStarcom, Inc. today reported record revenues and earnings for their third quarter, ended September 30, 2002.

Net sales for the third quarter of fiscal 2002 increased to $265.5 million, an increase of 56% over the $170.5 million in net sales reported in the prior year period. Year to date sales rose to $680.7 million as compared to $429.7 for the same period in 2001; an increase of 58% year-over-year.

Pro forma net income for the third quarter of 2002 increased 55% year-over-year to $33.6 million, or $0.30 per share, as compared to $21.7 million, or $0.20 per share, in the prior year period. Year to date pro forma net income increased 72% year-over-year and was $81.6 million, or $0.71 per share, as compared to $47.5 million, or $0.44 per share, in the same period of 2001. Pro forma net income excludes non-cash charges relating to stock compensation expense, amortization of intangibles, in process research and development expenses and investment impairment losses.

Actual net income for the third quarter of 2002 was $30.8 million, or $0.27 per share, compared to net income of $18.8 million, or $0.17 per share, for the third quarter of 2001. Year to date actual net income was $74.0 million, or $0.64 per share, as compared to $40.4 million, or $0.38 per share, in the prior year period.

"In addition to our record financial performance, the quarter was marked by several significant accomplishments in the global telecommunications market," noted Hong Lu, president and chief executive officer of UTStarcom Inc.

"Some of these accomplishments include maintaining very strong growth in China, signing in excess of $200 million in PAS contracts with China Telecom and China Netcom, while also adding critical customers and signing significant customers outside of Mainland China in the quarter. Globally, we won several key contracts including the Company''s first with Cable & Wireless for its AN2000 IP-DSLAM in Panama, and a significant PAS contract in the United States. Clearly, all of these contract wins are indicative of the tremendous demand we are seeing for our products worldwide."

"We continue to be extremely proud of our financial performance," added Mike Sophie, CFO of UTStarcom Inc. "This is the 11th consecutive quarter in which we have exceeded expectations. We are especially delighted with our positive cash flow from operations of $83.3 million for the quarter and $136.3 million for the year as well as our operating margins of 15.3% for the quarter. It shows that we can grow our company very successfully, and can also efficiently manage that growth to optimize our financial visibility and strength. "

Conference Call

UTStarcom will conduct a conference call to discuss third quarter 2002 earnings results and provide forward-looking financial guidance. The call will be held today, Thursday, October 17 at 1:30 pm (PDT), which is open to the public. The conference call dial-in numbers are: United States -- 800-230-1093; International -- 612-288-0337.

A replay of the call will also be available from approximately 5:00pm (PDT) on October 17, to 11:59pm (PDT) on October 24. The conference call replay numbers are: United States -- 800-475-6701; International -- 320-365-3844. The access code is 655102.

Investors will also have the opportunity to listen to the conference call and the replay over the Internet through UTStarcom''s Investor Relations web site at: http://www.utstarcom.com/investors/index.php . To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software.