Leasing News

It is now Tuesday morning at the 41st Annual ELA Leasing Convention. People are mingling in the hallways comparing notes about last night's cocktail parties, reviewing the daily agenda and sizing up their education options. I overhear people saying that the food and drink in San Francisco are great.

However, I also hear one lady who says that the attendee list offended her. She comments that all men are prefixed “Mr.”--- while all women have no prefix. Sure enough. She is correct. Why it is done that way, I do not know.

Mike Fleming started the day with an overview on how ELA will reposition itself to meet the needs of all ELA members. He reviewed ELA's $8 million operating budget and vowed to expand the business and marketing information programs. His number one item (as it should be) will advocate the positive aspects of leasing to a hesitant Congress.

After Mike's opening, David Hale, Global Chief Economist with the Zurich Financial Services Group, lectured on the economy. He indicated that there was an 80-90% probability that the U.S. will go to war with Iraq ( with an estimated duration of 21 days). He is still concerned about the overall world economy and cannot predict when our leasing troubles will end. He also concludes that the housing market will resound a second time if interest rates continue to drop. Business investment may not be as lucky since a lot of companies have become risk averse and less likely to expand until the business climate stabilizes.

From 10:30 to 12:00 people went off to various council meetings. They attended either the small ticket council, middle market business council, vendor programs business council, service provider business council or large ticket business council. In spot checking the rooms, attendees seemed concerned about the direction of ELA and wanted to contribute ideas on how they could make their ELA membership more valuable. Attendees were also given the opportunity to vote for new council members.

Larry Sabato, an Election Analyst and director of the University of Virginia Center for Governmental Studies, outlined his thoughts on the 2002 election race. He believes that many incumbents have locked in their seats using prejudicial redistricting rules. He seemed to be bothered by the recent Jersey incident in which the Democrats pulled their losing candidate and replaced him at the last moment. He considers this event unprecedented and is not fair to the voting public. He also predicted various governor and house races. (Note from Jeffrey: I cannot remember laughing so hard at a political analyst. Larry is funny, insightful and I plan to check out his free website. Because I was laughing so hard, I forgot to write down the name of his website. Once I find it, I will put a hot link at http://executivecaliber.ws)

After lunch I went by the exhibitor room and found the Marriott staff tearing down the booths. It appears that it order to minimize convention costs, ELA decided to use the exhibitor room as the venue for the evening entertainment. As a result, exhibitors had to shut down early. In polling the exhibitors, they felt that they had been denied invaluable lessor face time.

For the remainder of the day, people attended additional workshops, which focused on automation, funding, supply chain management, residual management, and anti-money laundering regulations. I spot checked rooms and attendance had dropped by 90%. Two popular sessions included Curt Glenn's Bonus Depreciation and Don Paynter's Cross-Border Leadership.

The Closing Night Party ran from 7:00 - 10:30 PM and provided all ELA members with a memory that will set the standard for future receptions. It was elegant, sophisticated, subdued and distinguished. The quality was omnipresent and I felt a warm feeling every time I would run into my friends. I enjoy these events and always feel that I get my money's worth by attending.

Reporting from the ELA Annual Convention in San Francisco, I'm Jeffrey Taylor.

Jeffrey Taylor

ExecutiveCaliber - Global Lease Training

2144 South 1150 East

Bountiful, UT 84010 USA

(801) 299-9332

(801) 299-9932 (fax)

JTaylor@executivecaliber.ws

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Taycor Financial One of Top Five in State

Taycor Financial, Culver City – Provides equipment leasing and financing. Grew 4,854 percent in five years. Had sales of $11.9 million in 2001.

http://www.taycor.com/ (member UAEL)

Taycor Financial, Culver City – Provides equipment leasing and financing. Grew 4,854 percent in five years. Had sales of $11.9 million in 2001.

Taycor Financial achieved some 4,854 % growth in the past five years, with sales growing from $241,000 in 1997 to in $11,938,000 in 2001. Taycor Financial is in the business of Leasing & Financing Capital Equipment to businesses nationwide.

"Our whole team is very excited and honored to be included in Inc magazine's extremely prestigious ranking," said Bob Skibinski, Taycor's CEO. "It shows the spectacular results that can be achieved through very hard work, focus and most importantly teamwork."

Started in 1982, the Inc 500 ranks the nation's leading entrepreneurial firms according to sales growth over the previous five years. Former Inc 500 companies that have gone on to become household names include Microsoft, Timberland, Domino's Pizza and Patagonia.

The 2002 Inc 500 reveals a surprising resiliency within the entrepreneurial sector, where leading companies are continuing to show dramatic rates of growth despite the recession.

The average five-year growth rate of this year's Inc 500 companies is 1,521%. While that is less than the 1,933% average for companies on last year's list, it is nonetheless dramatic in the current environment. Average 2001 sales for the Inc 500 dropped only slightly, from $24,976,000 to $24,706,000. More than two-thirds (73%) of 2002 Inc 500 companies are profitable. Despite the technology bust, "Computer Software & Services" remains the leading industry category, representing nearly 40% of firms on the list.

"This is the first Inc 500 ranking to reflect the full impact of the recession" said Inc editor John Koten. "Yet these entrepreneurs are managing to confound the nay sayers and move ahead despite the obstacles. They're showing that smart strategies can succeed even in the toughest times."

To be eligible for this year's Inc 500, companies had to be independent and privately held through fiscal year 2001, have at least $200,000 in sales in the base year of 1997, and their 2001 sales had to have exceeded 2000 sales. Holding companies, regulated banks and utilities are not eligible. Inc verifies all information using tax forms and financial statements from certified public accountants and by conducting interviews with company officials.

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California has 58 of nation's fastest-growing companies

By Jennifer Coleman

ASSOCIATED PRESS

SACRAMENTO – More of the fastest-growing businesses, as ranked by Inc. Magazine, are from California than from any other state, negating an impression the state's business climate is too unfriendly, state officials said.

"Three of the top 10 fastest-growing companies in America are in California, and 58 of the top 500 are in California, substantially more than any other state," said Gov. Gray Davis. "And even though we're dealing with a national recession, California has maintained policies that promote growth and encourage innovation."

The top five

California companies on the fastest- growing list:

–Outsource Group, Walnut Creek – Provides professional human- resources services to businesses. Grew 54,330 percent in five years. Had sales of $294.5 million in 2001.

–Prometheus Laboratories, San Diego – Acquires, develops and markets pharmaceuticals. Grew 11,243 percent in five years. Had sales of $50 million in 2001.

–Blue Pumpkin Software, Sunnyvale – Provides enterprise-software applications and services. Grew 10,945 percent in five years. Had sales of $38.5 million in 2001.

–Taycor Financial, Culver City – Provides equipment leasing and financing. Grew 4,854 percent in five years. Had sales of $11.9 million in 2001.

–Global Domains International, Carlsbad – Sells Internet domain names. Grew 3,479 percent in five years. Had sales of $9.3 million in 2001.

Of the 58 California companies that made the list, 23 were from the Bay Area, 17 were from Los Angeles and 11 were from San Diego.

Texas had the next highest number of companies on the list, with 47 firms. Florida had 31 companies and New York had 28.

The magazine ranked Outsource Group of Walnut Creek, Calif., as the nation's fastest-growing company. Outsource, which provides professional personnel services to businesses, grew 54,330 percent in five years, with sales of $294.5 million in 2001.

Inc. Magazine will release its list at the end of October. This is the second year that California, the nation's most populous state, ranked first on this list.

The state's good showing also is contrary to the impression that California's economy was "incredibly dependent on a smoke and mirrors, dot-com economy," said Karen Dillon, executive editor of Inc. Magazine. "This is good evidence that there's a lot more breadth and depth" to the state's economy.

California, with the fifth largest economy in the world, has a gross state product of $1.4 trillion.

The 500 companies on the magazine's list had an average five-year sales growth of 1,521 percent. The average figure for last year's list was 1,933 percent.

Average sales for the top 500 companies dropped slightly, from $24.9 million to $24.7 million, Dillon said. The technology sector remains the leading industry, with 40 percent of the firms.

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Consumer Spending Boosts Profits at Major Banks

By Caroline E. Mayer

Washington Post Staff Writer

Major banks reported better-than- expected profits yesterday, thanks largely to consumers who refinanced their mortgages and continued to rack up charges on their credit cards.

Citigroup Inc., Bank of America Corp., Wells Fargo & Co. and Bank One Corp. all reported substantial profits in the consumer side of their business, helping to counter losses and declining business in their commercial and investment divisions.

"These banks are offsetting their headaches, getting their money from the consumer side of the business," said Arnold G. Danielson, a banking consultant in Rockville.

The results helped spark the large rally on Wall Street yesterday. Shares of Citigroup closed at $34.14, up $3.83, while Bank of America shares rose by $5.04, to close at $65.75.

Shares of Falls Church-based Capital One Financial Corp., one of the nation's largest credit card issuers, jumped $2.48, closing at $34.64, as it reported that its earnings increased 57 percent in the third quarter. The company also raised its forecast for full-year earnings to 35 percent, from 30 percent, over last year.

The reports again emphasized the importance of the consumer in the nation's economy. Consumer spending helped make last year's recession relatively mild and has largely kept this year's modest recovery going.

"The consumer was very strong, stronger than people had expected," concluded Andrew B. Collins, a senior bank analyst with U.S. Bancorp Piper Jaffray.

However, Collins noted, not all banks were expected to post such positive earnings. "Tomorrow is another day," he said, noting that several banks, including J.P. Morgan Chase & Co., are scheduled to release their earnings today. Chase has already warned that it expects its third-quarter profit to be lower than previously expected.

In a broad sense, bank profits were up because, with interest rates so low, their costs for obtaining funds to lend is much lower than what they charge for the loans they make.

Banks "have been rescued by an abundance of deposits" as individual investors have taken their money out of the stock market and placed it in money market funds, Danielson said. The trend is happening even though many banks are offering interest rates below 2 percent, compared with the 3 to 4 percent rates they paid a couple of years ago.

While the Federal Reserve lowered its target for overnight interest rates to 1.75 percent late last year -- down 4.75 percent for the year to the lowest level in four decades -- there was not a corresponding drop in bank credit card interest rates.

According to CardWeb.com, which monitors the credit card industry, the average interest rate charged by credit card issuers dropped by a little more than 2 points, from 16.49 percent in January 2001 to 14.32 percent in December 2001.

And while the Fed target rate has remained at 1.75 percent, the average interest rate for credit cards has started to climb during 2002, to 14.71 percent in September.

Overall, Citigroup's third-quarter net income rose 23 percent, to $3.92 billion.

In the consumer division at Citigroup, the nation's largest financial services company, the spread between what the bank paid for money and what it charged its customers rose to 11.09 percent. Credit card earnings rose 21 percent, to $849 million.

On the other hand, earnings fell 7 percent, to $1.2 billion, at its investment banking unit Salomon Smith Barney Inc.

At Bank of America, the biggest U.S. consumer bank, profit nearly tripled to $2.24 billion, driven by higher sales of mortgages and credit cards.

Wells Fargo, the fifth-largest bank, saw net income grow 10 percent, to $1.44 billion, with profits from lending, including home loans, growing 15 percent.

Bank One, the sixth-largest bank, saw profit for the third quarter jump 9.2 percent, to $823 million, from a year ago.

Profit from credit cards rose by 7 percent to total $298 million. Charge volume rose by $4.3 billion, and 1.43 million new accounts were opened, the highest level in three years.

Citigroup

Citigroup chairman and chief executive officer Sanford I. Weill said in a statement accompanying Tuesday's report that he was ``exceptionally pleased'' with the results given the state of the global economy.

``This strong performance took place against the backdrop of macroeconomic challenges in Argentina and the political uncertainty in Brazil, which negatively impacted our results, as well as exceptionally weak equity markets, which have reduced the value of our proprietary investment portfolio and led to further realized losses in the insurance portfolios,'' he noted.

Weill also used the report to emphasize that the banking behemoth was committed to ``resolving the issues facing our industry.'' Citigroup has been dealing with allegations related to the company's financing of failed energy company Enron, possible conflicts of interest involving its analysts and concerns over the allocation of profitable initial public offering shares.

Net income for the first nine months of the year was $12.85 billion, or $2.47 a share, up from $10.25 billion, or $1.98 a share in 2001.

Bank of America

Bank of America said that strong performance in its retail operations - including mortgages, credit cards and deposits - boosted net income to $2.24 billion, or $1.45 a share, in the July-September period from $841 million, or 51 cents a share, a year earlier.

The 2001 figures included costs related to leaving the auto leasing and subprime real estate lending businesses as well as a ``goodwill'' write-down.

Analysts surveyed by Thomson First Call had expected the bank, which is based in Charlotte, N.C., had forecast earnings of $1.41 for the quarter.

In trading on the New York Stock Exchange, shares gained $5.04, or 8.3 percent, to close Tuesday at $65.75 each.

Chairman Ken Lewis noted that strength in retail operations offset weakness in market-related revenue from trading and equity investments.

``We continue to benefit from our diversified business mix,'' said Lewis, who also is the bank's chief executive officer.

Chief financial officer James Hance said he expected fourth-quarter performance ``to look a lot like the third, because we expect the same dynamics'' in the economy.

He said consumer banking continued to be strong and that there was some improvement in commercial lending. He warned, however, that ``you still have fragility in the large corporate business sector.''

Net income for the first nine months was $6.64 billion, or $4.22 per share, up from $4.73 billion, or $2.90 per share, a year ago.

Bank One

Third-quarter profits at Bank One Corp. increased to $823 million, or 70 cents a share, in the July-September period from $754 million, or 64 cents a share, a year earlier.

That was in line with the estimates from analysts surveyed by Thomson First Call.

Bank One shares rose $2.61, or 7 percent, to close Tuesday at $39.74 on the New York Stock Exchange.

James Dimon, a former Citigroup official who is chairman and chief executive officer of Bank One, said he was pleased with the results given the challenging economic climate.

``We saw positive signs in each line of business, with some growth in credit card, retail and investment management,'' Dimon said in a statement accompanying the report.

He said retail operations ``had net growth in transaction accounts for the first time in nearly three years'' and that nonperforming commercial loans were down for the first time in three years.

``The economic environment continues to be uncertain and could constrain revenue growth as it has begun to affect commercial loan demand and usage - even after adjusting for our deliberate reduction in commercial loans - and volumes in Treasury services,'' he said.

Net income for the first nine months was $2.45 billion, or $2.08 a share, compared with $2.1 billion, or $1.78 a share, in 2001.

Wells Fargo

Wells Fargo & Co. said third-quarter earnings were propelled by low mortgage rates and a surge in new depositors.

The San Francisco-based bank earned $1.44 billion, or 84 cents per share, in the July-September period, up from $1.16 billion, or 67 cents per share, a year earlier. That matched the consensus of analysts surveyed by Thomson First Call.

In trading on the New York Stock Exchange, Wells' shares climbed $2.55, or 5.4 percent, to close Tuesday at $49.78.

With some mortgage rates falling below 6 percent, millions of homeowners have been refinancing their loans to save money. The trend has been a boon for Wells Fargo, which ranks among the nation's largest mortgage lenders.

Through the first nine months of the year, Wells' mortgage volume totaled $221 billion. That was more than its previous full-year record of $202 billion in 2001.

In the third quarter, the bank collected $6 billion in revenue, a 10 percent improvement from the same time last year. Through the first nine months of the year, Wells' revenue totaled $18 billion, a 26 percent gain from last year.

``We are earning more of our customers' business and gaining market share from our competitors,'' said Dick Kovacevich, Well's chief executive officer.

Loan losses in the third quarter totaled $415 million, down from $454 million a year earlier.

In the first nine months of the year, Wells earned $3.97 billion, or $2.30 per share, up from $2.24 billion, or $1.29 per share, last year.

Mellon Financial

Mellon Financial Corp., based in Pittsburgh, said earnings from continuing operations totaled $186 million, or 43 cents a share, in the third quarter compared with $179 million, or 38 cents a share, a year earlier.

The results beat by a penny the 42 cents in profits expected by analysts surveyed by Thomson First Call.

Shares rose $2.51, or more than 10 percent, to close at $26 at the end of regular trading on the New York Stock Exchange.

The bank said that as of the third quarter, all of the assets and liabilities from it retail branches - sold in December to Citizens Financial Group Inc. - had been removed from its books.

The financial services company also moved to lower credit risk by reducing nonperforming assets by $107 million to $69 million. It said the bulk came from writing down $85 million of a $100 million loan to WorldCom, the telecommunications company now operating under bankruptcy protection.

Eric Rothman, an analyst with Williams Capital Group, said Mellon was doing well considering the markets and how other asset management companies have fared.

``All in all, it was not an overly bad quarter. They took the hit last quarter for WorldCom, and they have set themselves in a fairly decent spot, all things considered,'' Rothman said. ``The overall sum of the pieces at Mellon should do well on a much longer basis.''

Mellon earned $503 million from continuing operations in the first nine months of the year, or $1.14 a share, up from $480 million, or $1 a share, in the first nine months last year.

On the Net:

www.citigroup.com

www.bankofamerica.com

www.bankone.com

www.wellsfargo.com

www.mellon.com

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Rates rise in Treasury bill auction

By Associated Press

WASHINGTON (AP) Interest rates on short-term Treasury securities rose in Tuesday's auction.

The Treasury Department sold $17 billion in three-month bills at a discount rate of 1.630 percent, up from 1.585 percent last week. An additional $15 billion was sold in six-month bills also at a rate of 1.630 percent, up from 1.530 percent.

Both the three-month and six-month rates were the highest since Sept. 16, when the bills sold for 1.660 percent and 1.640 percent, respectively.

The new discount rates understate the actual return to investors 1.659 percent for three-month bills with a $10,000 bill selling for $9,958.80, and 1.666 percent for a six- month bill selling for $9,917.60.

In a separate report, the Federal Reserve said Tuesday that the average yield for one- year constant maturity Treasury bills, the most popular index for making changes in adjustable rate mortgages, rose to 1.59 percent last week from 1.55 percent the previous week.

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Truckers, others ensnarled in port mess

by Dick Larsen, senior editor

www.landlinemag.com

Owner - Operator Independent Drivers Association

Who would have thought an 11-day labor dispute would so completely interrupt America's supply chain, creating an estimated $2 billion-a-day loss to the economy and a gnarly muddle for 2,600 waiting trucks and hundreds of offshore ships?

Evidently, President George Bush.

Bush risked some political capital by invoking the 1947 Taft-Hartley Act, the first president to do so since Jimmy Carter, in an effort to end the dispute between West Coast dock workers and shippers.

A federal judge in San Francisco Oct. 8 ordered an 80-day cooling-off period in the labor standoff that shut down shipping operations at 29 ports, leaving retail goods, manufacturing parts and food stranded on docks or on container ships offshore.

Even as things cool off, they stand to heat up. If no settlement is reached within 60 days, a three-member panel headed by former Republican Sen. Bill Brock will issue a report telling where the two sides stand. Union members would then be required to vote on management's latest offer. However, if members reject the offer and the 80 days pass, the standoff would resume.

Moreover, backlogged goods probably will not arrive at their destinations until Jan. 1, 2003, according to some estimates. And that assumes no further slowdowns during the "cooling off" period.

In Los Angeles, for example, truckers who lined up at terminals Oct. 10 faced a turnaround time of around five hours - nearly double the norm, said Joe Nievez, president of Qwikway Trucking Co., speaking to the Daily Breeze, Torrance, CA.

Nievez said it was too early to tell if the delay was caused by the large number of truckers who rushed to the terminals or by the pace of longshoremen's work.

Meanwhile, it seems only Mexican ports, lawyers and air shippers have benefited.

For example, OOIDA member Jim Shannon and his wife Athena were stranded at the Port of Oakland with 36,000 pounds of pork destined for the Orient. After waiting several days, they traveled to Englewood, CA, to forward the meat for shipment by air via Los Angeles International Airport.

And lawyers representing shipping lines, exporters importers and insurers will hash out who pays for delays and damaged goods.

Meanwhile, Mexican ports such as Ensenada in Baja California have received diverted shipments. One report tells of 20 trucks with merchandise ranging from bananas to Christmas toys that left Ensenada under police escort for the border city of Tijuana.

However, Mexican trucks hauling U.S.-bound fruit and vegetables underwent lengthy inspections by U.S customs officials, risking spoilage. Manuel Gomez, head of trucking association Canacar, told Reuters U.S. checks are "more exaggerated than usual," adding, "It doesn't matter that we are transporting products so their supply chain isn't interrupted."

Gomez said the delivery of goods was also delayed by the fact Mexican customs authorities had to issue special permits to allow local ports to dispatch cargo from the rerouted Asian vessels.

Meanwhile, trucking groups have asked U.S. Secretary of Transportation Norman Mineta to suspend the hours-of-service rules until the ports are cleared of the containers. Another suggestion was to expand terminal operations to 24-hours a day, seven-days-a-week.

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AmSouth Reports Third Quarter Earnings Per Share Up 16.2 Percent

BIRMINGHAM, Ala--AmSouth Bancorporation (NYSE:ASO) today reported earnings in the third quarter ended September 30, 2002, of $.43 per diluted share, a 16.2 percent increase from the $.37 per diluted share reported for the third quarter of 2001. Net income for the third quarter of 2002 was $156.0 million versus $136.1 million for the same period in 2001, a 14.6 percent increase.

AmSouth's third quarter performance resulted in a return on average equity of 20.2 percent, a return on average assets of 1.60 percent and a record low efficiency ratio of 49.5 percent.

"This quarter was marked by growth in noninterest revenues, good deposit growth effective expense control and improving credit quality," said Dowd Ritter, AmSouth's chairman, president and chief executive officer. "We are well-positioned for a rebound in the economy, and in the meantime we are continuing to deliver solid, sustainable earnings."

Net interest income was $371.4 million, a 7.3 percent increase from last year's third quarter. The net interest margin was 4.36 percent, down 25 basis points from the second quarter. The decline resulted from a combination of market forces and actions taken with an emphasis on longer-term performance. The sharp decline in long-term interest rates has accelerated prepayments on loans and investment securities. At the same time, AmSouth continues to aggressively grow deposits and, in light of slower than expected loan growth, hold surplus funding in overnight funds and other very short-term liquid assets.

Average loans for the quarter grew by $1.1 billion, a 4.5 percent increase over the same quarter in 2001, while low-cost deposits grew $889.2 million, or 5.6 percent, during the same period.

Noninterest revenue, which includes earnings from service charges, trust, investment management services and other sources of fee income, was $188.3 million for the quarter, a decrease of $4.0 million or 2.1 percent compared with the same quarter in 2001, but an increase of $7.2 million compared with the previous quarter. Third quarter noninterest expenses were $283.0 million, down 4.8 percent compared with the same quarter in 2001.

Net charge-offs were .66 percent of average net loans in the third quarter of 2002, improving from .76 percent in the previous quarter. The loan loss provision for the quarter exceeded net charge-offs by $8.5 million. The ratio of loan loss reserves to total loans was 1.45 percent at the end of the third quarter.

Total nonperforming assets at September 30, 2002, were $188.7 million, or .72 percent of loans net of unearned income, foreclosed properties and repossessions, compared to $189.5 million or .74 percent in the previous quarter. Nonperforming assets were 8.0 percent below the level for the third quarter of 2001.

About AmSouth

AmSouth is a regional bank holding company headquartered in Birmingham with $40 billion in assets, 600 branch banking offices and more than 1,200 ATMs. AmSouth operates in Tennessee, Alabama, Florida, Mississippi, Louisiana and Georgia. AmSouth is a leader among regional banks in the Southeast in several key business segments, including consumer and commercial banking, small business banking, mortgage lending, equipment leasing, annuity and mutual fund sales, and trust and investment management services. AmSouth also offers a complete line of banking products and services at its web site, www.amsouth.com.

CONTACT:

AmSouth Bancorporation

Investment Community:

List Underwood, 205/801-0265

News media:

Rick Swagler, 205/801-0105

www.amsouth.com

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NetSol Technologies, Inc. Reports Fiscal Year 2002 Results; Losses Reduced by 64% to $5.9 Million From $14.0 Million and Loss Per Share Is Reduced to $0.40 From $1.12 Per Share

CALABASAS, Calif--NetSol Technologies, Inc. (the "Company" or "NetSol") (NASDAQ:NTWK), a CMM Level 2 Software Company specializing in lease and finance enterprise software applications, today reported results for fiscal year ended June 30, 2002. NetSol filed its annual Form 10-KSB along with its financial statements with the Securities and Exchange Commission today.

Revenues were $3,578,113 for June 30, 2002 as compared with $6,726,836, which is a decline of 46%. Operating expenses were reduced dramatically to $6,395,427 in fiscal year 2002 from $18,076,642 in fiscal 2001, which is a reduction of 64%. This was achieved by consolidation of operations; reduction of employee head count by 120 persons worldwide; divestment of the UK and German operations and aggressive cost cutting worldwide in administrative and general operations of the Company. The operating expenses include non-cash depreciation and amortization charges of $2,115,399, which were accelerated from 15 years to 5 years to write off goodwill and intangibles in a shorter period. Other non-cash charges included a compensation related expense of over $800,000. The Company reduced the salaries and wages to $1,461,157 in fiscal 2002 from $2,512,801 in 2001 or a reduction of $1,051,644. General and administrative expenses were reduced by $1,238,477 in fiscal year 2002. In addition, professional and non cash related expenses were also reduced by $1,386,917 in fiscal 2002. Overall, the net loss was reduced to $5,618,348 for June 30, 2002 as compared to $13,923,030; a decline of over 60%. While the Company suffered a decline in revenue, it reduced its loss per share to $0.40 in June 30, 2002 from $1.12 in June 30, 2001.

Naeem Ghauri, the Company's CEO, commented, "Undoubtedly this was the most challenging year for the Company. We were faced with the challenge of rebuilding the Company as a result of the invalid takeover attempt of the Company in April 2001 by an insurgent group of shareholders. In August 2001, the management was back in control of the Company facing the challenge of rebuilding the Company. In addition, the 9/11 terrorist attacks and the severe Information Technology ("IT") spending downturn globally, presented further challenges to the management's attempt to rebuild the Company."

He added, "Today, we are focused on getting our fixed overhead costs of running the global operation to a level in line with our recurring revenue stream. We have made a great deal of progress in this area, as it is demonstrated with the sharp decline in losses in fiscal year 2002."

He continued, "Going forward, the challenge is to grow the top line revenues, against the backdrop of a severe slowdown in IT spending. For NetSol, the silver lining is the fact that our services are greatly needed by the Fortune 1000 companies, to improve their return on investment and rapid deployment of Enterprise Business Applications. NetSol has taken a number of key business development initiatives in the Far East and Europe and, as a result of our sharp focus, we are beginning to see some possible new business engagements in the current quarter."

The management continues to be focused on building its delivery capability and has achieved key milestones in that respect. Key projects are being delivered on time and on budget, quality initiatives are succeeding, especially in maturing internal processes. The Lahore facility was able to receive a CMM level 2 assessment, as the first software house in Pakistan to obtain this assessment. The Lahore subsidiary was told that it would easily qualify for CMM level 3 and to skip that qualification and seek CMM level 4 assessment in the near future. The Lahore subsidiary is currently in the process of obtaining its CMM level 4 assessment.

The company has undertaken many new initiatives for business development in the Asia Pacific region, UK and North America.

Compared to fiscal 2001, the gross revenues for NetSol USA and NetSol eR were lower by approximately 57%, which is mainly due to a severe downturn in the U.S. technology spending. The Company's management continues to face resistance from existing and potential customers to sign new projects. In September 2002, the management made a decision to curtail new business development and marketing expenditure to reflect the current state of the technology sector. Our objective is to sustain the operation with reduced overheads during the downturn. We are, however, looking at new alliances and partnerships, where we do not have to incur upfront marketing costs by revenue sharing with other lead contractors. These tactical moves are warranted by the challenges in the IT services sector and does not change our core business model where we aim to be the lead contractor in a majority of business that we are able to gain.

The Company has been able to refocus its business development activities by enhancing its marketing teams in Asia Pacific Region. In 2002 six more senior level marketing personnel were added to cover the markets of Asia Pacific. New contracts were added due to this initiative. In the U.S. similar efforts were made but the results have been unimpressive, primarily due to the overall slump in the technology sector.

NetSol PK was able to add some new customers to its list such as Citibank Pakistan, ICI Dulux Pakistan and other local customers. As the suite of Leasing and Finance products mature, we are confident that the loss of revenue from discontinued operations and the IT Services business will be gradually compensated by selling more of our proprietary products in the U.S. and the Far East. Our Australian subsidiary, Abraxas, has key software products, which are being developed in our NetSol PK development facility, which will be marketed in Australia as well as other markets. These products are targeted towards the banking, insurance and leasing and finance industries. Management believes that the prospects for the future of Abraxas are to have modest sales growth, anticipating being able to leverage on an enhanced product line and by expanding its customer base. The Company believes that a modest sales growth for its operating subsidiaries for fiscal 2002 is reasonable based upon its ability to further penetrate the IT market.

Some key achievements of the 4th quarter 2002 and Fiscal Year 2002 were:

-- Losses down by over 64%

-- Assessment of CMM level 2 by NetSol Technologies (Pvt) Ltd.

-- Parallel phase of CMS deployment in UMF Singapore and Daimler

Chrysler Finance Australia

-- Completion of the full ERP Leasing and Finance suite of

products

-- New contract with United Nations Development Program

-- New contract with Citibank, Pakistan

-- New contract with Askari Bank, Pakistan

-- NetSolConnect's subscriber growth to 40,000

Mr. Najeeb Ghauri, Vice Chairman and CFO, commented, "We are pleased to cut down our costs significantly at every level such as corporate and professional services at the Company's headquarters in view of the global economic downturn." He continued, "We are very fortunate to have a team of developers and management, who have demonstrated tremendous faith and confidence in the Company and its long term prospects. In this difficult market environment, over 100 employees invested in the Company by exercising stock options and helped the Company overcome short term liquidity issues."

Mr. Ghauri concluded, "A year ago, we faced bigger obstacles and challenges. The fact that we have survived the most difficult year in our history, gives me a great deal of confidence for the future. Going forward, we are a leaner, more focused and a mature provider of IT Enterprise services and products, which is key to our ultimate success."

CONTACT:

NetSol Technologies, Inc.

Naeem Ghauri, 818/222-9195

SOURCE: NetSol Technologies, Inc.

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Wells Fargo Reports Record Quarterly Earnings Per Share of $.84

SAN FRANCISCO----Wells Fargo & Company (NYSE:WFC)

In accordance with FAS 142, effective January 1, 2002, amortization of goodwill was discontinued. For comparability, all amounts for 2001 in the text and tables before the main table section beginning SUMMARY FINANCIAL DATA -- NEWS RELEASE have been adjusted to exclude goodwill amortization. For 2002, the first quarter transitional goodwill impairment charge of $276 million is excluded. The table, "ADJUSTED" EARNINGS -- FAS 142 TRANSITIONAL DISCLOSURE, reconciles reported earnings to adjusted earnings.

Third Quarter Highlights:

-- Record diluted earnings per share of $.84, up 12 percent from

prior year's $.75 per share

-- Record net income of $1.44 billion, up 10 percent from prior

year's $1.31 billion

-- Return on assets of 1.78 percent

-- Return on equity of 19.38 percent

-- Revenue, excluding market-sensitive income(a) and

acquisitions, up 10 percent from prior year

-- Non-performing assets down $126 million, or 7 percent, from

second quarter 2002

Wells Fargo & Company (NYSE:WFC) reported record diluted earnings per common share of $.84 for the third quarter of 2002, compared with

$.75 in the third quarter of 2001, up 12 percent. Net income was a record $1.44 billion, up 10 percent from $1.31 billion in the third quarter of 2001. For the first nine months of 2002, net income was a record $4.24 billion, or $2.46