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For Immediate Release
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DCTI Reports Second Quarter FY2001 Results
Second quarter Fiscal 2001 revenues total $9.1 Million
Four new Board Members announced
Xxxxx Xxxxxx appointed interim CEO/President
Salt Lake City, Utah - February 13, 2001--Digital Courier Technologies, Inc.
(OTC: DCTI), a leading provider of advanced e-payment services specializing in
fraud and risk management, announced financial results for the quarter and six
months ended December 31, 2000.
DCTI reported revenues for the three months ended December 31, 2000, of $9.1
million, compared to $6.1 million for the same period ended December 31, 1999,
representing a 49% increase. For the six months ended December 31, 2000 revenues
were $18.6 million compared to $9 million in the same period ending December
31,1999. The Company reported a loss before interest, taxes, depreciation,
amortization and non-cash charges in the quarter of $1.2 million. In the six
month period ended December 31, 2000 the loss reported excluding the items noted
above was $953 thousand. For the comparable quarter ended December 31,1999, the
Company reported a loss before interest, taxes, depreciation, amortization and
other non-cash charges of $3.5 million. For the six months ended December 31,
1999 the loss reported excluding the items noted above was $4.1 million.
During the current quarter, the Company evaluated the realizability of the
goodwill recorded in connection with numerous acquisitions made during prior
years. The Company projected net cash flows to be generated by the acquired
operations and compared those to the net book value of the assets acquired. The
analysis resulted in a write-down of $142 million. Remaining goodwill of $34
million will be amortized at the rate of approximately $710 thousand per month.
Additionally, during the current quarter the Company reported a one-time
non-cash gain of $3.1 million for the 8.6 million shares returned to the Company
after the previously reported internal investigation that focused on the
DataBank acquisition. The total shares outstanding as of December 31, 2000 was
approximately 40 million.
For the quarter ended December 31, 2000 the Company reported a net loss of
$153.5 million compared to a net loss of $9.1 million for the quarter ended
December 31, 1999. For the six months ended December 31, 2000, the Company
reported a net loss of $166 million, as compared to a net loss of $12 million
for the six months ended December 31, 1999.
"In the second quarter, we concentrated on positioning the Company to become
cash flow positive as soon as possible. We grew our merchant base to 694 from
577 a year ago. We consolidated our operations by closing two offices and
reducing our workforce by one half. As a result we have eliminated about $300
thousand in monthly expenses. We now project that as we close the quarter ended
March, 2001 the business will be generating cash on a monthly basis," said Chief
Financial Officer Xxxx Xxxxxx. "Having a strong business model, the foundation
has been laid to continue our strong growth into the e-payments sector and we
are very enthused about the future of the business with profitability,
shareholder value and increasing our merchant portfolio being our main goals,"
continued Xxxxxx.
DCTI also announced the addition to the Board of Directors of Xx. Xxxx Xxxxxxxx,
a financial services consultant and former acting Superintendent of Banks for
the state of California, Xx. Xxxx Xxxxxx, an asset fund manager formerly with
Xxxxx Xxxxxxx Asset Management, Xx. Xxxxxx Xxxxxx, DCTI's V.P. of Technology and
a co-founder of XX.xxx and Xx. Xxxxxxx Xxxxxxxx, an executive manager with a
large electronic funds transfer software and service provider. These gentlemen
have filled the vacancies created by the resignations of Xx. Xxx Xxxxxxx, Xx.
Xxx Xxxxx, Xx. Xxxxx Xxxxxxx and Mr. Xxx Xxxxxxxx. Xx. Xxxxxxxx has also
resigned his position as President of the Company. All of these gentlemen remain
committed to the future of DCTI and will be available, as needed, on a
consulting basis. Xx Xxxxx Xxxxxx has been appointed interim Chief Executive
Officer and President and will remain on the Board. Xx. Xxxx Xxxxx, a current
Board member will serve as interim Chairman.
"We greatly appreciate the efforts of our departing Board members and we thank
them for their significant contributions to the Company," stated Xxxxx Xxxxxx,
DCTI's interim CEO and President. " We welcome the new members to the Board and
to DCTI. They bring valuable industry insight and they will assist us in
defining strategic initiatives as we work to grow the Company and increase
shareholder value," continued Xx. Xxxxxx. The Company also announced that the
fiscal 2000 Annual Stockholders Meeting is scheduled to be held on April 26,
2001. The Company will announce the time and location when they are established.
DIGITAL COURIER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(Unaudited)
2000 1999
----------------- ------------------
REVENUE $ 9,137,924 $ 6,157,954
COST OF REVENUE 6,198,506 3,434,725
----------------- ------------------
Gross margin 2,939,418 2,723,229
----------------- ------------------
OPERATING EXPENSES:
Depreciation and amortization 13,489,448 6,478,108
Impairment write-down of goodwill 142,000,000 --
General and administrative 2,824,216 1,720,019
Non-cash expense related to
the issuance of stock and stock options -- 181,475
Selling 548,798 916,969
Research and development 513,257 696,839
Chargebacks 249,000 2,884,247
----------------- ------------------
Total operating expenses 159,624,719 12,877,657
----------------- ------------------
OPERATING LOSS (156,685,301) (10,154,428)
----------------- ------------------
OTHER INCOME (EXPENSE):
Gain on return of common shares 3,109,544 --
Interest and other income 91,726 70,209
Interest and other expense (34,749) (111,197)
----------------- ------------------
Net other income (expense) 3,166,521 (40,988)
----------------- ------------------
LOSS BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS (153,518,780) (10,195,416)
INCOME TAX BENEFIT -- 413,957
----------------- ------------------
LOSS FROM CONTINUING OPERATIONS (153,518,780) (9,781,459)
----------------- ------------------
DISCONTINUED OPERATIONS:
Loss from operations of discontinued
WeatherLabs operations, net of income
tax benefit of $46,526 $ -- $ (77,542)
Gain on sale of WeatherLabs operations,
net of income tax provision of
$460,483 -- 767,472
----------------- ------------------
INCOME FROM DISCONTINUED OPERATIONS -- 689,930
----------------- ------------------
NET LOSS (153,518,780) $(9,091,529)
================= ==================
NET LOSS PER COMMON SHARE:
Basic and Diluted $ (3.64) $ (0.26)
================= ==================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and Diluted 42,164,840 35,183,224
================= ==================
DIGITAL COURIER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999
(Unaudited)
2000 1999
----------------- ------------------
REVENUE $ 18,633,834 $ 8,990,883
COST OF REVENUE 12,352,131 4,781,519
----------------- ------------------
Gross margin 6,281,703 4,209,364
----------------- ------------------
OPERATING EXPENSES:
Depreciation and amortization 26,935,446 8,449,620
Impairment write-down of goodwill 142,000,000 --
General and administrative 5,040,654 2,596,492
Non-cash (income) expense related to
the issuance of stock and stock options (649,300) 188,768
Selling 986,931 1,519,686
Research and development 958,205 1,273,058
Chargebacks 249,000 2,884,247
----------------- ------------------
Total operating expenses 175,520,936 16,911,871
----------------- ------------------
OPERATING LOSS (169,239,233) (12,702,507)
----------------- ------------------
OTHER INCOME (EXPENSE):
Gain on return of common shares 3,109,544 --
Interest and other income 174,188 146,043
Net loss on sale of assets (15,383) --
Interest and other expense (60,904) (250,371)
----------------- ------------------
Net other income (expense) 3,207,445 (104,328)
----------------- ------------------
LOSS BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS (166,031,788) (12,806,834)
INCOME TAX BENEFIT -- 299,316
----------------- ------------------
LOSS FROM CONTINUING OPERATIONS (166,031,788) (12,507,519)
----------------- ------------------
DISCONTINUED OPERATIONS:
Loss from operations of discontinued
WeatherLabs operations, net of income
tax benefit of $161,167 $ -- $ (268,612)
Gain on sale of WeatherLabs operations,
net of income tax provision of
$460,483 -- 767,472
----------------- ------------------
INCOME FROM DISCONTINUED OPERATIONS -- 498,860
----------------- ------------------
NET LOSS $ (166,031,788) $ (12,008,659)
================= ==================
NET LOSS PER COMMON SHARE:
Basic and Diluted $ (3.67) $ (0.45)
----------------- ------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and Diluted 45,282,149 26,509,492
================= ==================
About DCTI
DCTI is at the forefront of Internet payment technology. A recognized specialist
in risk management and fraud control, DCTI provides highly scalable, reliable,
and fully integrated payment software and systems for businesses, Internet
merchants, and financial institutions. Payment features of the DCTI system
include advanced authentication, validation, fraud screening, payment
authorization, settlement, and real-time reporting. DCTI's notable client base
and affiliations include U.S. and international banks and merchants and ongoing
development partnerships with industry leaders such as Equifax, NDC e-commerce,
TSAI, and GlobalPlatform. For more information, please visit xxx.xxxx.xxx.
This press release contains forward-looking statements made pursuant to the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. You are cautioned that such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties which could
significantly affect expected results in the future from those expressed in any
such forward-looking statements made by, or on behalf of the Company. Certain
factors that could cause actual results to differ materially include, without
limitation, risks relating to: business conditions and growth in the e-payments
industry and the general economy, both domestic and international; lower than
expected customer contracts; competitive factors, including pricing pressures,
technological developments and products offered by competitors; technological
difficulties and resource constraints encountered in developing new products;
and the timely flow of competitive new products and market acceptance of those
products. Actual results may differ materially from the statements made as a
result of risk factors inherent in our business, industry, customer base, or
other factors, the Company's continued ability to create or acquire products and
services that customers will find attractive and the potential for increased
competition, which could affect pricing and profitability.
Investor Contact for DCTI:
-------------------------
Xxx Xxxxx, Investor Relations, DCTI, 000-000-0000, or xxxxxx@xxxx.xxx.
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