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NetGuru Q4 revenues rise 30% to $9.1 million

Ela Dutt
India Abroad Correspondent in Washington

NetGuru Inc, an integrated Internet and IT technology and services company, on Thursday reported record revenues for the company's fourth quarter and fiscal year ended March 31, 2001.

"Fiscal 2001 was a pivotal year for NetGuru. We just completed our eleventh consecutive quarter of revenue growth, have identified and are pursuing the highest growth opportunities in our emerging businesses, and are entering fiscal year 2002 as a much more focused and streamlined company," said chairman and CEO Amrit Das.

"We believe these primary achievements, strong growth outlook and superior product offerings will enable us to achieve profitability by the end of the current fiscal year."

Net revenues for the fourth fiscal quarter ended March 31, 2001 increased 30 per cent to $9.1 million from $7.0 million for the fourth quarter of fiscal 2000.

The company attributed the increase primarily to continued growth of its core IT services and engineering software businesses as well as new revenue contributions from its Internet-related portal business.

However, for the fourth fiscal quarter ended March 31, this year, it reported a net loss of $4.3 million, or $0.25 per diluted share, compared with a net loss of $0.5 million, or $0.03 per diluted share for the year-ago quarter.

Das attributed the loss to one-time charges of approximately $2.4 million for restructuring activities, or $0.14 per diluted share, as well as continued expenditures to fund the company's emerging businesses.

NetGuru emphasised that it does not anticipate further one-time charges relating to either of these events in the future. Das expects the company's investments in its emerging businesses to continue to support the company's organic growth and begin contributing to its path to profitability by the end of fiscal 2002.

"NetGuru's core IT services and engineering software businesses continued growing profitably during the quarter and fiscal year and are better positioned than ever to maintain their profitability as we enter into fiscal 2002," Das said.

"However, going into fiscal 2002, we believe the majority of our future growth will be derived from our emerging businesses, primarily because of the slowdown in the global IT market," he stated.

He said he was already experiencing that growth as reflected by the ramp-up from NetGuru's Internet portal-related businesses, primarily telephony and travel services, which has grown to $1.7 million for the fourth quarter of 2001, from $1.1 million in third quarter 2001, and from $0.5 million in second quarter 2001, to a total $3.5 million for fiscal year 2001 from $0.4 million in the prior fiscal year.

In March this year, the company announced restructuring including consolidation of the entire technical support operation into the corporate headquarters in Yorba Linda, Ca., and the elimination of the in-house legal department.

In addition, it refocused its Internet portal and ISP initiatives in India towards telephony and travel services for the portal business and telephone and corporate communication/connectivity services for the ISP business.

"As a result of these restructuring activities, which have made us into a much leaner organization, we incurred a one-time restructuring charge," Das asserted.

Das also indicated that with nearly 20 years of experience with the corporate market in India where NetGuru currently represents more than 3,200 corporate customers, these two primary areas will provide it with the greatest sustainable growth opportunities going forward.

"As part of this move and in an effort to maximize the potential of the infrastructure's existing capacity, the company will seek an alliance with an outside partner who will takeover and enhance the ISP infrastructure's reach into the non-corporate areas -- a segment that NetGuru will not be actively pursuing," and will have a revenue sharing agreement with the new partner, the company said.

The company's services and solutions include software products, services and solutions; information technology services and solutions; Internet technology services and solutions; and digital media products and services.

NetGuru has offices in the United States, India, the United Kingdom, France, Germany and Singapore and distributors in 40 countries.

It currently licenses its software products to more than 20,000 businesses, with 50,000 installations and 150,000 users in over 65 countries.

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