INTN Intac Intl (MM)

HONG KONG, Feb. 13 /PRNewswire-FirstCall/ -- On February 13, 2006, INTAC International, Inc. (NASDAQ:INTN) (FSE: WKN 805768) (the "Company"), a leading provider of integrated educational and career development services in China, today announced its results of operations for the quarter ended December 31, 2005. This is the first quarter of the Company's fiscal year ended September 30, 2006. Revenue decreased by $32.6 million to $18.2 million for the three months ended December 31, 2005 from $50.8 million for the same period in 2004. Revenues during the quarter included $17.0 million from the Company's distribution business and $1.2 million from its career development services compared to $46.6 million in distribution revenues and $4.2 million from career development services during the same period of 2004. The decrease in career development services revenue in 2005 resulted from slower than anticipated sales to the Company's Chinese school district customers. Distribution revenue decreased mainly due to the Company's shift in emphasis from the distribution business to the career development and training services business, as well as the increased competition in the wireless handset distribution industry in China. Loss from operations was $940,610 for the three months ended December 31, 2005 as compared to income from operations of $5.5 million in the same period of 2004. Net loss for the three months ended December 31, 2005 was $734,430, as compared to net income of $4.8 million for the three months ended December 31, 2004. The decline in net income is primarily due to lower sales volumes, lower distribution gross margins and higher selling, general and administrative costs due to increased business activity related to our career development and training services and increased costs associated with being a public company. "This has been a transition quarter to build from for the remainder of 2006. We have had to contribute time and resources to realign and organize our business as we develop new courses and products within our career development and training services segment. Despite the challenges this quarter, we did achieve a key goal of lowering our trade receivables and increasing our cash," commented Mr. Wei Zhou, President and CEO of the Company. About INTAC International, Inc. INTAC International, Inc. is a leading provider of integrated educational and career development services as well as management software products for educational institutions in China. INTAC International is also engaged in the distribution of premium brand wireless handset products. Forward-Looking Statements This press release contains certain "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements expressed or implied by such forward-looking statements to differ materially from those projected or implied. Factors that could cause or contribute to such differences include, among other things: our ability to effectively execute our business plan; our ability to timely complete our INTAC Mobile Telecommunications Institute courseware and facilities; our ability to attract trainees for our INTAC Mobile Telecommunications Institute training program; changes in general business conditions; the impact of competition in our industry, especially in the Asia-Pacific Rim and in the wireless handset industry; our small number of current suppliers and customers in our wireless handset distribution business; the added expense structure assumed by us as a U.S. public company; political and economic events and conditions in jurisdictions in which we operate; Internet laws and regulations of the government of The People's Republic of China, or the PRC, that are unclear and may change in the near future; regulation and censorship of information distribution in China which may adversely affect our business; political and economic policies of the PRC; the risk of the loss of the agreements, or the exclusivity terms, with the PRC's Education Management Information Center and the Ministry of Education; the high cost of Internet access that may limit the growth of the Internet in China and impede our growth; advertising and e- commerce customers that have only limited experience using the Internet for advertising or commerce purposes; the acceptance of the Internet as a commerce platform in China which depends on the resolution of problems relating to fulfillment and electronic payment; concerns about security of e-commerce transactions and confidentiality of information on the Internet that may increase our costs, reduce the use of our Internet portal and impede our growth; our network operations that may be vulnerable to hacking, viruses and other disruptions, which may make our products and services less attractive and reliable; changes in interest rates, foreign currency fluctuations and capital market conditions; and other factors including those detailed under the heading "Risk Factors" and elsewhere in the INTAC's annual report on Form 10-K for the fiscal year ended September 30, 2005, and Form 10-Q for the quarter ended December 31, 2005, as filed with the Securities and Exchange Commission. We disclaim any intention or obligation to revise any forward- looking statements whether as a result of new information, future events or otherwise. INTAC undertakes no obligation to update any forward-looking statements made in this media release. For further information, please contact: Lesley Zhang Investor Relations Director Tel: (8610) 83914053 MP: (86) 13910406802 Email: . Internet: http://www.intac-international.com/ First Call Analyst: FCMN Contact: controller@intac-asia.com DATASOURCE: INTAC International, Inc. CONTACT: Lesley Zhang, Investor Relations Director of INTAC International, Inc., +8610-83914053, MP: +86-13910406802, or Web site: http://www.intac-international.com/

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