Providential Holdings Reports Operating Results for the Second Quarter Ended December 31, 2004
HUNTINGTON BEACH, Calif.
Providential Holdings, Inc.
Henry Fahman, 714-843-5450 x 5455
info@phiglobal.com
or
OTC Financial Network
Rick McCaffrey, 781-444-6100 x625 (Investor Relations)
rick@otcfn.com
Providential Holdings, Inc. (OTCBB:PRVH) , a provider of international advisory services specializing in mergers and acquisitions, announced today its operating results for the second fiscal quarter ending December 31, 2004.
Total revenues were $712,604 and $2,389,049 for the three months ended December 31, 2004, and 2003, respectively. Revenues for the second quarter of fiscal 2005 consist of $646,423 in advisory and consulting fees, $22,663 in sales and $43,518 in tuition compared to $2,373,292 in sales and $15,757 in tuition for the comparable period in the prior fiscal year. Gross profit for the second quarter ended December 31, 2004 was $661,035 compared to $260,891 for the same period last year.
The main decrease in sales is due to the discontinuation of PHI Digital in fiscal year 2004. In addition, the Company's subsidiary ATC Technology has experienced a decline in sales as it refocuses its business structure. The increase in tuition is the result of a full three months of revenue in the current period versus one month in the prior period. The College was acquired in December 2003.
Total general and administrative expenses were $5,126,204 and $4,316,784 for the three months ended December 31, 2004 and 2003, respectively. The increase is primarily due to the impairment of assets in the amount of $4,708,159. Interest expense was $313,026 and $103,256 for the three months ended December 31, 2004 and 2003, respectively.
Net loss for the three months ended December 31, 2004 was $4,790,076, compared to a net loss of $3,961,534 for the same period in 2003, which is equivalent to a net loss per share of $0.04 and $0.04, respectively, based on the weighted average number of basic and diluted shares outstanding of 135,974,402 and 89,323,367, respectively. The net loss is primarily attributed to conservative accounting treatments resulting in impaired assets of $4,708,159 and a one-time reduction of 50% applied to the advisory and consulting fees during the most recent quarter. Without the impairment and the one-time haircut, the Company would have recorded $1,307,458 in gross profit and $564,506 in net profit for the second quarter of fiscal 2005.
Henry Fahman, chief executive officer of Providential Holdings, stated, "We consider it prudent to take a conservative stance now, which may turn out to be a pleasant surprise down the road when the related assets are re-evaluated. Fundamentally, the growth opportunity of the Company is very strong. Our advisory services continue to generate consistent revenues for the Company. In the current period, we have gained two new clients for consulting services and have very healthy deal flows moving forward."
Fahman continued, "Providential Holdings has built a strong operational platform, which will provide the Company with a solid base on which to continue our prudent merger and acquisition activities. We believe the transactions we have been working on recently will help us increase shareholder value in the near future."
About Providential Holdings, Inc.
Providential Holdings and its subsidiaries engage in a number of diverse business activities, the most important of which are M&A advisory services, cutting tools, and international markets. The Company acquires and consolidates special opportunities in selective high-growth industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies. For more information on Providential Holdings and its subsidiaries visit http://www.phiglobal.com
This news release contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. Such forward-looking statements are made based upon management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995.
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