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NetSol Technologies Inc. (NTWK) Reports Record Fourth Quarter Results

NetSol Technologies Inc. (NTWK), a global provider of business services and enterprise software solutions, reported fourth quarter and full-year 2008 financial results this morning. Quarterly revenues rose 23% year-over-year and 16% sequentially to a record $10.5 million. Net income increased 58% to $2.1 million, or 8 cents per share, vs. $1.3 million, or 7 cents per share, for the same period a year ago. Outstanding share count increased from 19.8 million to 27.3 million shares during the twelve-month span. Results were exactly in line with analysts’ estimates. For the full year, revenues increased 25% over 2007 to $36.6 million. Net income for fiscal 2008 was $7.2 million, or 28 cents per share, compared to a loss of $4.9 million, or 28 cents per share, for 2007.

“NetSol delivered a truly outstanding performance in fiscal 2008, complemented by a strong fourth quarter, as we delivered record revenue, GAAP net income and EBITDA results, all meeting or exceeding our projected full year financial guidance,” said Najeeb Ghauri, NetSol Technologies chairman and CEO. “The strength of our core NetSol financial suite of products helped drive double-digit annual growth in license, service and maintenance revenues. This was complemented by the rollout of our new BestShoring(TM) business model and Global Business Services platform which reflect our continued focus on meeting our international clients’ needs for local expertise matched with high quality offshore delivery capabilities. Our success in executing during fiscal 2008 was highlighted by rising average deal sizes as well as the expansion or penetration of business verticals such as finance, e-government and healthcare. We continue to diversify our revenue streams geographically as well as by customer focus as we expand NetSol’s presence globally, while also meeting our financial growth objectives.

“We are reiterating our fiscal year 2009 financial guidance and believe that our current business backlog, strong pipeline, expanded product and service offerings, combined with our 2009 strategic growth initiatives, will provide a solid platform to meet these ambitious goals. From a strategic perspective, we are continuing to invest in our sales and marketing resources to support our core operating divisions, particularly in North America where we recently announced the opening of our new global operating headquarters, while penetrating new growth markets such as the Middle East as well as Central and South America. Overall, we continue to focus on diversifying our customer base and client delivery centers to support our global growth initiatives. I am extremely pleased with our fiscal 2008 performance and believe NetSol has never been better positioned as we look to leverage the opportunities we are seeing in the international markets for fiscal 2009,” concluded Mr. Ghauri.

NetSol reiterated fiscal 2009 financial guidance of 30% – 35% revenue growth and EPS of $0.40 – $0.45. Shares of NTWK closed at $2.66 yesterday and have traded in a 52-week range of $1.45 – $4.64. NTWK has a market cap of $73 million, shareholders’ equity of $42.5 million, a P/S of 2.0, and a P/E of 9.5.

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