PSE Circular for Brokers No. 699-99

April 8, 1999 PSE CIRCULAR FOR BROKERS NO. 699-99 April 7, 1999 SPI TECHNOLOGIES, INC. REPORTS RECORD RESULTS IN 1998 Listed company SPI Technologies, Inc (Philippine Stock Exchange, ticker symbol "SPI") leading exporter of information technology services, today reported record sales and earnings results for its fiscal year ended December 31, 1998. Year-end sales advanced 89% to P865 million compared with P458 million in fiscal 1997. Net income before a special non-cash charge increased 43% to P186 million from P130 million in 1997. The Company provided for a P20 million special non-cash charge related to the on-going restructuring of its Pre-Press operations in the Netherlands. The restructuring is expected to result in substantial annual cost savings as well as greatly bolster the Company's competitive position with its major client, Reed Elsevier. Cdphil In commenting on SPI's performance, Ernest L. Cu, president and CEO, said, "We took several steps during the past two years to accelerate our growth rate, and we are pleased that our efforts were reflected in our financial results. 1998 was marked by strong growth across all our core business lines, i.e. Standard Generalized Mark-up Language (SGML)-related services, Electronic Pre-Press, Litigation Support and Automated Mapping / Facilities Management. Our order backlog at the end of the year stands at its highest ever level." Mr. Cu explained that a major growth driver for SPI was the acquisition of the Electronic Pre-Press arm of Reed Elsevier in July 1997. The acquisition positioned SPI as a major player in the Electronic Pre-Press industry. Mr. Cu added that, in the past two years, management has taken steps to reposition the Company as a marketing driven provider of value added data conversion services. In 1998, SPI acquired Pacific Data Conversion Corporation (PDCC), a data conversion marketing company based in Eugene, Oregon. The acquisition gave SPI a strategic presence in the US. It also provided SPI access to an excellent production facility in China. SPI further invested in new marketing capabilities by opening offices in Germany and the US East Coast in 1999. 1999 also marks the Company's entry into a fifth business line, Software Services. The Company recently announced the formation of SPI Solutions, Inc., a new subsidiary which will focus initially on offering Enterprise Resource Planning implementation services for both Philippine and overseas clients as an implementation partner of SAP, the world's leading ERP software company. The move into Software Services is part of the Company's strategy to offer more value added information services which generate higher revenues per professional. LexLib The Company is also actively exploring opportunities in Internet-related and knowledge-based Information Technology remote services, through acquisitions and business partnerships, particularly in the US. "We believe that the Company's prospects in the years to come will continue to be positive. Our strategy to move up the technology ladder, combined with our expanded marketing coverage and financial strength, forms the building blocks for our sustained growth," Mr. Cu added. SPI provides information technology services including (1) conversion of news, professional and technical information into electronic form for major Internet and online content providers, (2) conversion of legacy document collections into a standardized electronic form for use on corporate intranets or networks, (3) conversion of evidence related documents into a searchable CD-ROM format for corporations involved in major litigation, (4) electronic mapping and database building for utilities, and (5) software services. SPI is an ISO 9002 certified exporter whose clients are located largely in North America and Europe. LLpr Authenticated by: (SGD.) ERNEST L. CU President & CEO SPI TECHNOLOGIES INC. UNAUDITED CONSOLIDATED BALANCE SHEETS DECEMBER 31,1998 ASSETS DECEMBER DECEMBER 1998 1997 CURRENT ASSETS Cash and Cash Equivalent 56,540,576 75,075,154 Accounts Receivables Trade 202,860,393 143,204,355 Others 11,245,121 22,848,432 Inventories 58,940,836 51,695,601 Prepaid Expenses and Other Current Assets 22,127,234 28,927,003 TOTAL CURRENT ASSETS 351,714,160 321,755,545 PROPERTY, PLANT & EQUIPMENT Net of Accumulated Depreciation 199,309,768 159,881,615 INVESTMENT IN SHARES OF STOCK 201,515,723 24,544,610 OTHER ASSETS 82,174,017 39,637,243 TOTAL ASSETS 834,713,668 545,814,013 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable and Accrued Expenses 187,271,467 82,533,450 Short. Term Loans 39,145,000 0 Income Tax Payable 867,163 10,812,531 Bonds Payable 0 124,150,000 TOTAL CURRENT LIABILITIES 127,283,630 217,495,981 MINORITY INTEREST IN SUBSIDIARY 4,500,000 4,500,000 STOCKHOLDERS' EQUITY Capital Stock 1.00 par value Authorized 200,000,000 shares Issued and Outstanding 97,791,450 61,841,357 Additional Paid-in Capital 170,355,165 97,147,253 Retained Earnings 334,783,423 164,829,422 TOTAL STOCKHOLDERS' EQUITY 602,930,038 323,818,032 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 834,713,668 545,814,013 ========= ========= Certified Correct: (SGD.) MA. MINA RAPADAS Comptroller SPI TECHNOLOGIES INC. UNAUDITED CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS FOR TWELVE MONTHS ENDED DECEMBER 31,1998 1998 1997 SALES 864,897,089 458,075,922 COST 562,935,714 285,350,519 GROSS PROFIT 301,961,375 172,725,403 OPERATING EXPENSES 106,541,076 71,285,247 INCOME/(LOSS) FROM OPERATION 195,420,299 101,440,156 OTHER INCOME/(EXPENSES) (9,487,787) 50,573,254 INCOME/(LOSS) BEFORE INCOME TAX 185,932,512 152,013,410 PROVISION FOR INCOME TAX 10,031,640 18,769,105 EARNINGS BEFORE MINORITY INTEREST IN EARNINGS OF SUBSIDIARY 175,900,872 133,244,305 MINORITY INTEREST IN EARNINGS OF SUBSIDIARY 3,000,000 3,000,000 NET INCOME (LOSS) 172,900,872 130,244,305 RETAINED EARNINGS, BEGINNING 181,440,841 54,210,738 CASH DIVIDEND (19,558,290) (19,625,621) RETAINED EARNINGS, END 334,783,423 164,829,422 ========= =========