Revenues grew threefold in first six months of fiscal 2002
GRAND RAPIDS, Mich., April 10 /PRNewswire-FirstCall/ -- Continuing to make
significant strides in establishing its Web-based long-distance and conference
calling service, BestNet Communications Corp. (OTC Bulletin Board: BESC) today
reported record sales and sharply higher enrollments for its fiscal second
quarter ended February 28, 2002.
The Grand Rapids, Mich.-based provider of patented Internet-based
communication solutions said sales more than tripled to $233,659 in the second
quarter of fiscal 2002, compared with $70,888 in the same period last year.
BestNet attributed the record revenues to increased usage by existing
corporate and residential clients, as well as strong, double-digit growth in
enrollment by new customers. The Company said new enrollments on its
Bestnetcall service (http://www.bestnetcall.com ) grew 29 percent over the first
quarter of fiscal 2002, spurred by growth in small- and mid-size corporate
accounts.
BestNet said it posted a net loss of $1.0 million, or $0.07 per share, in
the second quarter of fiscal 2002, compared with a net loss of $767,549, or
$0.08 per share, in the same period last year. The Company said investments
in its network operations, sales-and-marketing, and the expansion of its
customer-service capabilities contributed to the loss. BestNet said it had
significantly reduced expenses in non-core areas of the business, including
the consolidation of several facilities and the closure of an ancillary
business unit. BestNet said it reduced its quarterly operating expenses as a
percent of revenues by nearly 50 percent versus the year-ago period,
reflecting the combination of sales growth and sharpened focus on managing
operating costs and gross margins.
For the six-month period, BestNet's revenues grew threefold to $459,753,
versus $145,536 in the first half of fiscal 2001. BestNet said increased
usage by existing and newly enrolled customers, as well as sales from channel
partners that resell Bestnetcall services contributed to the strong revenue
growth during the first half of fiscal 2002.
"I am encouraged by our results," said Robert Blanchard, president and
chief executive officer of BestNet. "Our top-line growth is a direct result
of our efforts and investment to increase use among existing customers,
particularly business and enterprise customers that are achieving cost-savings
by using Bestnetcall. Additionally, we have accelerated our efforts to
develop international sales channels through alliances with channel partners
in targeted geographic markets. We expect to announce several additional
agreements for new markets in the coming weeks and continue to pursue
strategic agents and distributors.
"At the same time, we have reduced our burn rate and narrowed our
operating loss as a percent of sales. Plus, much of our investment in
infrastructure, sales and customer support is behind us, giving us the
capacity for sales growth far ahead of costs."
BestNet said usage by corporate customers had increased significantly as a
result of focused sales and customer-service efforts. Blanchard added that
BestNet is also testing new business applications for its "Call-Me" service,
which allows users to connect by phone initiated through email messages and
banner ads.
"We are building considerable momentum on the sales-and-marketing front,"
Blanchard said. "Our progress as a company, however, is not limited to the
rapid growth in sales. We also made significant strides improving operations
and implementing our core business strategies in the second fiscal quarter.
These include accelerated sales and marketing initiatives, extending our core
Bestnetcall technology into complementary markets, and moving aggressively to
ensure that shareholders realize the value of our proprietary technology
through intellectual property management."
BestNet recently announced it had hired an intellectual property (IP)
consulting firm and a leading high-tech patent law firm to help it maximize
the value of its proprietary technology. BestNet engaged Chicago-based
Creative IP Solutions to help manage and monetize its intellectual property,
including its patented method of launching long-distance phone calls using
packet technology. Previously, BestNet announced it had hired New York City-
based law firm Brown Raysman Millstein Felder & Steiner LLP to represent the
Company in its intellectual property management strategy. Brown Raysman,
whose high-tech patent practice includes Fortune 100 companies in the U.S. and
abroad, has begun working with BestNet to manage the Company's intellectual
property assets through licensing agreements and, if necessary, litigation.
Bestnetcall uses the Web to launch deeply discounted long-distance phone
calls and conference calls that are connected via the regular phone lines.
Customers in more than 120 countries currently use Bestnetcall, which requires
no changes to existing phone systems and no special hardware or software.
Corporate customers can save up to 70 percent on international long-distance
using Bestnetcall.
"We intend to control and capitalize on our intellectual property,"
Blanchard said. "We believe that Bestnetcall can become the kind of 'killer
app' that will revolutionize business long-distance and conference calling
because it saves money, requires no capital investment and does not require
specialized hardware or software. As we move forward, we will sharpen our
focus on gaining deeper penetration among existing and new business customers
that range from Fortune 500 companies to law, accounting, and professional
service firms, to small-businesses."
About BestNet Communications:
BestNet Communications Corp. is an Internet-based provider of long
distance, conference calling and e-commerce communication services. BestNet's
products blend key attributes of the Web with traditional telecom, offering a
fresh approach to consumer and business markets. Under the brand name
Bestnetcall (http://www.bestnetcall.com ), the patented service offers subscribers
premium quality calls, at significantly lower rates. Calls can be also
launched via the desktop application or handheld devices including Palm(TM),
Pocket PC(R) and Blackberry(TM) and used with any standard or wireless phone.
This release contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the "safe harbor" created thereby. These statements
include the plans and objectives of management for future operations,
including plans and objectives. The forward-looking statements herein are
based on current expectations that involve judgments with respect to, among
other things, future economic, competitive, and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond control of the Company. Although the
Company believes that the assumptions underlying the forward-looking
statements are reasonable, any one of the assumptions could be inaccurate and,
therefore, can be no assurance that the forward-looking statements included in
this release will prove to be accurate.
BESTNET COMMUNICATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
February 28,
2002 2001
Revenues $233,659 $70,888
Expenses:
Cost of sales
General and administrative 408,702 262,612
Depreciation and amortization 572,787 471,681
Total expenses 1,281,886 808,494
Net loss from operations (1,048,227) (737,606)
Other income, net 4,697 27,337
Net loss before preferred dividends (1,043,530) (710,269)
Cumulative preferred dividends declared and
conversion dividends 7,125 57,280
Net loss available to common shareholders ($1,050,655) ($767,549)
Net loss per common share, basic and diluted ($0.07) ($0.08)
Weighted average number of shares outstanding,
basic and diluted 15,078,284 9,791,824
Six months ended
February 28,
2002 2001
Revenues $459,753 $145,536
Expenses:
Cost of sales 740,827 135,425
General and administrative 880,199 589,115
Depreciation and amortization 1,147,950 915,309
Total expenses 2,768,976 1,639,849
Net loss from operations (2,309,223) (1,494,313)
Other income, net 60,252 43,488
Net loss before preferred dividends (2,248,971) (1,450,825)
Cumulative preferred dividends declared and
conversion dividends 207,616 123,931
Net loss available to common shareholders ($2,456,587) ($1,574,756)
Net loss per common share, basic and diluted ($0.17) ($0.23)
Weighted average number of shares outstanding,
basic and diluted 14,552,983 6,857,784
SOURCE BestNet Communications Corp.
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Related links:
http://www.bestnetcall.com
CONTACT:
Bob Blanchard, President & CEO of BestNet
Communications Corp., +1-616-977-9933; or Jeff Lambert, Brian
Edwards or Ryan McGrath of Lambert, Edwards & Associates, Inc.,
+1-616-233-0500, or mail@lambert-edwards.com
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