Netsol Technologies Inc. has a market cap of $34.7 million; its shares were traded at around $4.77 with and P/S ratio of 1.
Highlight of Business Operations:The gross profit was $21,497,501 for year ended June 30, 2012, as compared with $21,743,448 for the same period of the previous year. This is a slight decrease of 1.13%. The gross profit percentage was 54.05% for the current fiscal year and 59.49% in the prior year. The cost of sales was $18,278,023 in the current year compared to $14,804,126 in the prior year. The increase in cost of sales is mainly due to increase in salaries of the technical staff, increased travel to implement the software at client sides, increase in depreciation and amortization expense and some inflationary factors affecting global economy.
Operating expenses were $14,232,919 for the year ended June 30, 2012, as compared to, $11,578,628 for the year ended June 30, 2011, an increase of 22.92% from the prior year. The increase is mainly attributable to reversal of lease abandonment charges upon final settlement with the lessor last year increase in salaries and wages as well as in general and administrative expenses. Depreciation and amortization expense amounted to $1,113,758 and $1,180,226 for the year ended June 30, 2012 and 2011, respectively. Combined salaries and wage costs were $4,191,593 and $3,347,896 for the comparable periods, respectively, or an increase of $843,697 from the corresponding period last year. One of the main reasons for this increase is the acquisition of another subsidiary which salaries are consolidated for the first time. General and administrative expenses were $4,679,840 and $3,719,796 for the years ended June 30, 2012 and 2011, respectively, an increase of $960,044 or 25.81%. As a percentage of sales, these expenses were 11.75% in the current year compared to 10.18% in the prior year. The increase in cost is also attributable to the first time consolidation of the new subsidiary acquired in UK.
Selling and marketing expenses slightly increased to $3,130,379 for the year ended June 30, 2012 as compared to $3,016,402 for the year ended June 30, 2011. As a percentage of sales, these expenses were 7.86% in the current year compared to 8.25% in the prior year. The Company provided for certain doubtful debts of $124,291 and $367,064, during the years ended June 30, 2012 and 2011, respectively.
Net income in fiscal year 2012 was $2,446,545 as compared to $5,728,088 in fiscal year 2011. The current fiscal year amount includes a net reduction for the minority interest in earnings of $4,202,726 compared to a reduction of $3,974,882 in the prior year for the 49.9% minority interest in NetSol Innovation, the 39.48% minority interest in NetSol PK and the 49% minority interest in VLS. The net earnings per share, basic and diluted, were $0.39 in 2012 as compared to $1.18 and $1.16 in 2011.
We note that the Company's cash position was $7,599,607 at June 30, 2012 compared to $4,172,802 at June 30, 2011. Further, we note that the Company s current assets, as of June 30, 2012, totaled $36,278,106 and were 39.68% of total assets, an increase of 4.88% from $34,590,438, or 40.39% of total assets as of June 30, 2011. As of June 30, 2012, the Company's working capital (current assets less current liabilities) totaled $22,673,556 compared to $14,575,589 as of June 30, 2011, an increase of $8,097,967. As of June 30, 2012, the Company had $13,757,637 million in accounts receivable and $12,131,329 million in revenues in excess of billings. Net cash provided by operating activities amounted to $8,112,715 for the year ended June 30, 2012, as compared to $13,922,191 for the year ended June 30, 2011.
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