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Date: Mon, 19 Nov 2001 13:04:40 -0800 (PST)
From: peter.forward@pacificcmi.com
To: alewis@enron.com
Subject: First Ecom Announces 2001 Third Quarter Financial Results
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First Ecom.com, Inc. Announces 2001 Third Quarter Financial Results=20
=1DCompany Acquires First Gas & Oil Assets, Major Bank Signs Outsourcing Ag=
reement with First Ecom Systems Limited=20
HONG KONG, Nov 19, 2001 -- First Ecom.com, Inc. (NASDAQ: FECC, BSX: FECC, F=
ECC BH), a company with interests in gas and oil exploitation and electroni=
c payment solutions today announced the filing of its Form 10Q and financia=
l results for the third quarter ended September 30, 2001.
First Ecom posted revenue derived from the Company's payment processing ope=
rations of $205,928 and $242,836 for the three and nine months ended Septem=
ber 30, 2001 as compared to $17,355 and $27,887 for the respective three mo=
nths and nine months ended September 30, 2000. The increase in revenue for =
the three months ended September 30, 2001 was mainly due to the consolidati=
on of revenue from the start of operations at First Ecommerce Data Services=
Limited (FEDS).
"The third quarter was a good quarter business-wise," said Gregory Pek, pre=
sident and CEO of First Ecom. "We moved quickly and decisively to obtain qu=
ality assets in our new core business of oil and gas, with the acquisition =
of a working equity interest in Gasco Energy which has participation in alm=
ost 500,000 acres of land holdings in Utah and Wyoming. Production from the=
first wells in Utah has just commenced and Gasco will be reporting revenue=
in the fourth quarter.
"The future of payment processing in Asia also looks brighter and during th=
e quarter the Company secured a major outsourcing deal with UOB in Malaysia=
. While business was just starting at FEDS the Company thought it prudent t=
o accept the offer to sell it in order to better focus on oil and gas as we=
ll as Asian payment processing. In addition to these successes we were able=
to finalize the productization of our payment gateway and MARS products in=
to a new e-Acquiring system. This has the potential to be another significa=
nt revenue source, as we will no longer be selling only to banks that want =
to outsource but also to those banks and other businesses that want in-hous=
e systems. Our market is therefore much larger. These are all very positive=
developments."
Net Loss for the third quarter of 2001, before charges for impairment of go=
odwill and the write down of marketable securities, was $2,308,178 as compa=
red to the third quarter of 2000 net loss of $3,623,459 and $4,357,248 for =
the nine months ended September 30, 2001 compared to $10,398,602 for the ni=
ne months ended September 30, 2000.
Net loss per share for the quarter, before charges for impairment and write=
down of marketable securities, was $0.12 per share as compared to a net lo=
ss per share of $0.19 for the same quarter in 2000.
As previously announced, the Company has decided to change its business foc=
us to that of oil and gas development and exploitation and the during the q=
uarter the Company acquired, for $19 million, a 26% equity interest in Gasc=
o Energy, Inc. (NASD-OTC-BB: GASE) a company which acquires and exploits na=
tural gas properties in the Rocky Mountain region of the United States. Inc=
luded in the Company's operating results for the third quarter is a $155,70=
1 charge for the Company's
equity loss from Gasco Energy.=20
Gasco Energy is one of the leading companies in the development and exploit=
ation of natural gas reserves in the Rocky Mountain region of the United St=
ates. It has land holdings of some 159,000 acres in the Uinta Basin in nort=
heast Utah and some 332,000 acres in the Green River Basin of southwest Wyo=
ming.
In October 2001 the Company sold FEDS, with a guaranteed receipt of a minim=
um of $5 million, resulting in an impairment charge of $3,159,505, which ha=
s been recorded in the three months ended September 30, 2001.
Operating expenses before the impairment charge for the three months ended =
September 30, 2001 were 17% lower than for the comparable period in 2000 an=
d for the nine months ended September 30, 2001 were 33% lower than for the =
comparable period in 2000. This reflects the Company's concentrated effort =
on reducing costs. The operating expenses include restructuring costs of $1=
98,821 incurred during the first two quarters.
As of September 30, 2001, the Company's net current assets stood at $3.0 mi=
llion (December 31, 2000: $31.8 million). Net cash used in operating activi=
ties decreased from $6,334,932 for the nine months ended September 30, 2000=
to $4,592,465 for the nine months ended September 30, 2001, mainly due to =
the significant reduction in operating costs in the first nine months of 20=
01 as compared to the first nine months of 2000.
Net cash used in investing activities for the nine months ended September 3=
0, 2001 was $23,505,347 as compared to $7,316,048 for the nine months ended=
September 30, 2000. The major activities were (i) the acquisition of and i=
nvestment in FEDS of $3,984,526 and (ii) acquisition of petroleum assets, i=
n the form of a 26% equity interest in Gasco Energy, Inc., for $19 million.
Further progress was made during the quarter in the payment processing busi=
ness by the signing of agreements with United Overseas Bank (Malaysia) (UOB=
) and American Express. Revenue as a result of these contracts is expected =
to commence during the fourth quarter.
In addition, the Company completed the productization of its e-Acquirer pay=
ment gateway system. This will allow the Company to sell complete systems t=
o banks and financial institutions that do not wish to outsource the entire=
payment process.
The Company had a total of 24 (including 10 at FEDS) full time employees as=
at September 30, 2001 as compared to 56 full time employees, not including=
FEDS, as at September 30, 2000. This decrease in employees has resulted in=
a recovery, during the nine months ended September 30, 2001, of $2,202,766=
of previously expensed stock-based compensation costs. During the comparab=
le period ended September 30, 2000, the Company expensed $3,050,794 of stoc=
k-based compensation.
The Company's financial results for the quarter ended September 30, 2001 ac=
companied the filing of its Form 10-Q with the Securities & Exchange Commis=
sion on November 14, 2001, which is available on-line at the SEC's Edgar da=
tabase at www.freeedgar.com.
Financial Summary=20
FIRST ECOM.COM, INC.=20
Financial Highlights (Unaudited)=20
Quarter Ended Nine Months Ended=20
Sept 30, Sept 30, Sept 30, Sept 30,=20
2001 2000 2001 2000=20
Revenues $205,928 $17,355 $242,836 $27,887=20
Operating=20
(loss) ($5,368,486) ($2,881,473) ($9,158,299) ($9,279,644)=20
Net (Loss) ($5,775,588) ($3,623,459) ($7,824,658) ($10,398,602)=20
Basic and=20
diluted net=20
loss per share=20
before impairment=20
charges and=20
write down=20
of marketable=20
securities ($0.12) ($0.19) ($0.23) ($0.59)=20
Net Loss ($0.30) ($0.19) ($0.41) ($0.59)=20
Shares used=20
to compute=20
basic and=20
diluted loss=20
per share 19,210,037 18,935,312 19,210,037 17,674,906=20
About First Ecom.com=20
First Ecom.com Inc. has interests in both oil and gas exploitation as well =
as being a global provider of electronic payment solutions through its whol=
ly owed subsidiary First Ecom Systems Limited.
For more information, visit www.firstecom.com or contact First Ecom.com at =
+(852) 2801-5181 or by e-mail at info@firstecom.com.
Certain statements contained herein are "forward-looking" statements (as su=
ch term is defined in the Private Securities Litigation Reform Act of 1995)=
. Because such statements include significant risks and uncertainties, actu=
al results may differ materially from those expressed or implied by such fo=
rward-looking statements. For a discussion of some of these risks and uncer=
tainties, please refer to the company's SEC filings, which contain addition=
al discussion about those risk factors, which could cause actual results to=
differ from management's expectations. First Ecom expressly disclaims any
obligation to update the statements contained herein.=20
CONTACT: First Ecom.com=20
Ken Telford, (852) 2801-5181=20
or=20
Peter Forward, 888/305-8233 (Investor Relations)