EXHIBIT 99.1
Euroweb International Corp. Reports Results for 2003
Budapest--(BUSINESS WIRE)--April 7, 2004--Euroweb International Corp.
(NASDAQSC:EWEB - News) today announced results for the fourth quarter and year
ended December 31, 2003.
RESULTS FOR FOURTH QUARTER 2003
Three Months Ending Three Months Ending
Descriptions December 31, 2003 December 31, 2002 Change
- ----------------------------------------------------------------------------------------------------------------------------
Revenue $3,860,535 $3,625,505 +6.50%
Gross profit 1,175,149 $ 1,202,422 -2.30%
Operating margin 30.44% 33.16% -2.70%
Selling, general and administrative expenses 1,554,631 1,397,972 +11.12%
Impairment of goodwill (non-recurring) 980,538 2,016,000 -51.30%
Write-off of intangibles (non-recurring) 100,364 - n/a
- ----------------------------------------------------------------------------------------------------------------------------
Operating income/loss (1,460,384) (2,211,550) -33.96%
Financial income/expense 105,541 80,954 +30.40%
Provision on income taxes (15,467) - n/a
Equity in net loss of affiliate - (184,450) n/a
Net loss (1,339,376) (2,315,046) -42.10%
Weighted Average of Shares Outstanding 4,665,332 4,665,332
Net Loss Per Share, basic $(0.29) $(0.49)
The Company reported net loss attributable to common stockholders of $1,339,376,
or ($0.29) per share on a diluted basis, for the three months ended December 31,
2003, compared to $2,315,046 or ($0.49) per share on a diluted basis, reported
for the three months ended December 31, 2002.
ISP revenues increased by $184,057 to $1,434,874 for the three months ended
December 31, 2003, from $1,250,817 for the three months ended December 31, 2002
mainly due to exchange rate movements. Leased lines revenue increased by
$400,586 to $1,714,654 for the three months ended December 31, 2003, from
$1,314,068 for the three months ended December 31, 2002 which was the result of
improved sales activity. VOIP revenues decreased by $390,155 to $670,465 for the
three months ended December 31, 2003, from $1,060,620 for the three months ended
December 31, 2002. The Company had a new revenue source from facilities in 2003,
which had represented $40,542 for the three months ended 2003.
Gross profit margin has fallen by 2.3% due to an increase in proportion of lower
margin business (e.g. leased line revenue). Overall margin has decreased
slightly in absolute terms in the amount of USD $27,273. Selling, general and
administrative expenses has increased, which partly reflects the weakening of
U.S. dollar against Slovak and Czech Koruna, while new cost elements also
incurred in the fourth quarter of 2003.
RESULTS FOR YEAR ENDED DECEMBER 31, 2003
Twelve Months Ending Twelve Months Ending
Descriptions December 31, 2003 December 31, 2002 change
- ----------------------------------------------------------------------------------------------------------------------------
Revenue $14,761,374 $12,940,631 +14.00%
Gross profit 4,611,765 $ 4,327,435 +6.50%
Operating margin 31.24% 33.44% -2.20%
Selling, general and administrative expenses 5,401,023 5,441,877 -0.70%
Severance to officers - 2,020,832 n/a
Impairment of goodwill (non-recurring) 980,538 2,016,000 -51.30%
Write-off of intangibles (non-recurring) 100,364 448,500 -77.60%
- ----------------------------------------------------------------------------------------------------------------------------
Operating income/loss (1,870,160) (5,599,774) -66.60%
Financial income/expense 355,690 385,177 -7.60%
Provision on income taxes 61,590 - n/a
Equity in net loss of affiliate - (679,637) n/a
Net loss (1,576,060) (5,894,234) -73.26%
Weighted Average of Shares Outstanding 4,665,332 4,665,332
Net Loss Per Share, basic $(0.34) $(1.26)
The Company reported net loss attributable to common stockholders of $1,576,060,
or ($0.34) per share on a diluted basis, for the year ended December 31, 2003,
compared to $5,894,234 million, or ($1.26) per share on a diluted basis,
reported for the year ended December 31, 2002. The Company was able to improve
almost all revenue and cost categories when compared to last year. Revenue
increased by 14%, while all cost categories has decreased in 2003 as compared to
2002.
ISP revenues increased by $682,532 to $5,497,222 for the twelve months ended
December 31, 2003, from $4,814,690 for the twelve months ended December 31, 2002
mainly due to exchange rate movements. Leased lines revenues increased by
$387,077 to $6,487,607 for the twelve months ended December 31, 2003, from
$6,100,530 for the twelve months ended December 31, 2002. VOIP revenues
increased by $465,801 to $2,491,212 for the twelve months ended December 31,
2003, from $2,025,411 for the twelve months ended December 31, 2002. The Company
had a new revenue source from facilities in 2003, which had represented $244,791
for the twelve months ended 2003.
Although gross profit margin has fallen by 2.2% due to an increase in proportion
of lower margin businesses (e.g. leased line and VOIP), overall margin has
increased in absolute terms in the amount of USD $284,330. Together with tightly
managed selling, general and administrative expenses; the Company improved its
efficiency on operational activity. This improvement is also reflected in net
cash provided by operating activities, which became positive and is valued at
USD $307,660.
COMMENTS FROM CSABA TORO
Csaba Toro, Chief Executive Officer, stated, "I am pleased with our performance
in 2003. Compared to 2002, we increased our sales by 14%, as a long-term result
of introducing leased line and VOIP services since 2001, as well as due to the
weakness of the US Dollar relative to the Czech and Slovak Koruna in respect to
ISP activity. Simultaneously, the net loss per share was significantly reduced
in 2003 to $0.34 per share when compared to 2002 of $1.26 per share.
We were able to achieve a continuous organic growth in the last few years, which
resulted in significant improvement in yearly results. Cash flow from operations
also continuously improved and became positive for the first time in 2003. For
the year ended December 2003, cash flow from operations was $307,660.
With minimal debt and our current cash flow position, we are in an excellent
financial status, and we are well positioned to take advantage of the
opportunities that 2004 will offer, such as the recently announced acquisitions
of Euroweb Hungary Rt and Elender Rt. In 2004, the acquisitions of Euroweb
Hungary Rt and Elender Rt were valued at $11.6 million consisting of $8.6
million in cash and 677,201 shares of our common stock valued at $3,000,000. As
a result of these acquisitions, although we cannot provide guarantees, we
believe 2004 revenues will be in the range of $31-$35 million depending on the
date of closing of the acquisition of Elender Rt, along with what we believe
will be the further expected improvement in net income."
2
About Euroweb International Corp.
Euroweb International owns and operates Internet Service Providers in the Czech
Republic, Romania and Slovakia through its subsidiaries Euroweb Czech Republic
spol. s.r.o., Euroweb Slovakia a.s. and Euroweb Romania S.A. Euroweb is majority
owned by KPN Telecom BV. Euroweb's common stock is traded on the Nasdaq SmallCap
Market under the symbol "EWEB".
"Safe Harbor Statement" Under the Private Securities Litigation Reform Act of
1995
This press release contains forward-looking statements that involve risks and
uncertainties. The statements in this Release are forward-looking statements
that are made pursuant to safe harbor provision of the Private Securities
Litigation Reform Act of 1995. Actual results, events and performance could vary
materially from those contemplated by these forward-looking statements. These
statements involve known and unknown risks and uncertainties, which may cause
Euroweb International Corp's actual results in future periods to differ
materially from results expressed or implied by forward-looking statements.
These risks and uncertainties include, among other things, product demand and
market competition. You should independently investigate and fully understand
all risks before making investment decisions.
Contact:
Euroweb International Corp.
Csaba Toro
+36-1-88-97-101
3