Silverstar Holdings Reports Record Fourth Quarter and Fiscal 2007 Results




      Q4 Revenues Total $12.0 Million, vs. $470,000 in Q4 FY2006;

          Q4 GAAP Net Income $2.6 Million or $0.25 per share;

         Q4 Operating EBITDA $4.6 Million or $0.45 per share.

BOCA RATON, Fla., Sept. 27, 2007 (PRIME NEWSWIRE) -- Silverstar Holdings, Ltd. (Nasdaq:SSTR) , an international publisher and developer of interactive entertainment software, reported record financial results for its fourth quarter and fiscal year 2007 ended June 30, 2007.

Fourth Quarter Fiscal 2007 Financial Results

As compared to the previous quarter and same period a year ago:



 * Revenues for the quarter totaled $12.0 million, an increase of 161%
   from $4.6 million in the previous quarter, and a 2500% increase
   from $470,000 a year ago. The increase over the previous and
   year-ago quarters is primarily due to the performance of Empire
   Interactive, PLC, which Silverstar acquired in December 2006.

 * Net income totaled $2.6 million or $0.25 per share, compared to a
   loss of $2.8 million in the previous quarter or ($0.27) per share
   and a loss of $868,000 or ($0.10) per share a year-ago.

 * Operating EBITDA (Earnings before Interest Taxes Depreciation and
   Amortization), a non-GAAP measure, totaled a record $4.6 Million or
   $0.45 per share, as compared to an operating EBITDA loss of
   $0.3 million or ($0.03) per share in the previous quarter and
   operating EBITDA loss of $0.6 million or ($0.06) per share a year
   ago. The company recorded depreciation and amortization charges of
   approximately $2.0 million in the fourth quarter, compared to
   $950,000 in the same period last year. A reconciliation of
   operating EBITDA to operating income is included at the end of this
   release.

Full Year Fiscal 2007 Financial Results



 * Revenues for fiscal 2007 totaled a record $19.8 million, an
   increase of 500% from $3.3 million in fiscal 2006. The gain is
   primarily attributable to the contribution of seven months of
   increasing revenues from the company's Empire Interactive
   subsidiary, which generated revenues of approximately $17.2 million
   in fiscal 2007. During fiscal year 2006, revenues were generated
   solely by the operations of the company's Strategy First
   subsidiary.

 * Net loss totaled $2.4 million or $0.25 per share compared to a loss
   of $2.0 million or $0.21 per share in 2006. Depreciation and
   amortization charges totaled $4.7 million in fiscal 2007, as
   compared to $180,000 in fiscal 2006.

 * Operating EBITDA, a non-GAAP measure, totaled a record $3.1 Million
   or $0.31 per share, as compared to an operating EBITDA loss of
   $1.1 million or $0.12 per share in fiscal 2006.

"The record results for the fourth quarter exceeded our expectations," said Clive Kabatznik, CEO of Silverstar Holdings Ltd. "Revenues, operating EBITDA and net income improved dramatically as we expeditiously leveraged the company's new large back catalog and began the transition to next gen game platforms, like Xbox 360, Nintendo, DS and Wii; and introduced new titles. We also stepped up our release schedule, releasing 12 skus in the fourth quarter, up more than 50% over last quarter. Finally, we continued to build on Empire's international presence, particularly its strong and unique European distribution network. The outlook for next fiscal year is already looking strong, with at least 50 more SKUs due out in 2008."

Other Q4 Highlights



 * FlatOut Ultimate Carnage, released on Xbox 360 in Europe in
   June 2007, was a top 10 seller for 11 consecutive weeks. This
   highly successful introduction was complemented by the signing of
   Warner Bros. Interactive Entertainment to distribute the product to
   North and South America.

 * Double Dragon, released on Xbox Live Arcade, was a number one
   seller upon launch with more than 55,000 copies downloaded in the
   first week.

 * Silverstar's Strategy First subsidiary expanded its relationship
   with GameTap, the first broadband entertainment network from Turner
   Broadcasting System, Inc. (TBS), so that every game released by
   Strategy First through 2012 will be available for exclusive online
   play and for purchase in GameTap's new online digital retail
   storefront.

Fiscal 2008 Outlook

Silverstar plans to release at least 50 SKUs during the fiscal year 2008. Most prominent among these will be the North American release of FlatOut Ultimate Carnage on Xbox 360 on October 2, 2007. Other near-term releases include FlatOut Head-on for PSP and the FlatOut PC version are expected to be released internationally in the second or third fiscal quarter, with Jackass on PS2 and PSP being released in Europe in the second quarter.

Based on the current release schedule, most of the company's new high profile titles for fiscal 2008 will be released during the October through June period. Management anticipates revenues will exceed $40 million for the full fiscal year 2008, with operating EBITDA in the range of 17.5% to 25.0% or $7 million to $10 million. As anticipated, management expects the first fiscal quarter to be weakest of the year, with 100% to 110% of the operating EBITDA anticipated in the final three quarters of the fiscal year.

Conference Call

Silverstar will host a conference call today at 4:30 p.m. Eastern Time. A brief presentation by management will be followed by a question and answer period. To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the Silverstar Holdings conference call and provide the conference ID.



 Domestic callers: 1-888-200-2794
 International callers: 1-973-935-8766
 Conference ID#:  9266938
 Internet Simulcast: http://viavid.net/dce.aspx?sid=00004554

 The call will be available for replay starting at 7:30 p.m. Eastern
 Time until October 26, 2007:

 Toll-Free Replay number: 1-877-519-4471
 International Replay number: 1-973-341-3080
 Replay PIN #: 9266938

If you have any difficulty connecting with the conference call or webcast, please contact the Liolios Group at 949-574-3860.

About Silverstar Holdings

Silverstar Holdings Ltd. is an international publisher and developer of interactive entertainment software. It currently owns Empire Interactive, PLC and Strategy First, Inc. Empire Interactive (www.empireinteractive.com) is a leading developer and publisher of interactive entertainment software games, including Starsky & Hutch, Big Mutha Truckers, Ford Racing and FlatOut. Empire's products are delivered on both console and PC platforms. Strategy First (www.strategyfirst.com) is a developer and worldwide publisher of entertainment software for the PC. For more information about Silverstar Holdings visit www.silverstarholdings.com

The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, regulatory approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the company's filings with the Securities and Exchange Commission.

Reconciliation of Operating Income to Operating EBITDA

In addition to other measures, management evaluates operating results based upon operating "EBITDA," which is defined as operating income before depreciation and amortization, interest expense and income taxes, each of which is presented on the company's Consolidated Statements of Operations. The company's presentation of operating EBITDA, a non-GAAP measure, may not be comparable to similarly titled measures used by other companies. Any of these items could be significant to the company's financial results. The following table reconciles operating EBITDA to operating income for the periods indicated.



                         Quarters ended June 30,  Year ended June 30,
 Operating EBITDA
  Reconciliation            2007       2006        2007        2006
                         ---------   --------   ---------   ---------
 Operating Income
  (Loss)                 $ 2,605.0   $ (623.7)  $(1,669.0)  $(1,293.2)
 Depreciation                 64.6        7.2       159.7        31.7
 Amortization of
  Intangibles               1632.5       44.7     4,235.6       148.8
 Amortization of Software
  Development Costs          283.6        0.0       337.2         0.0
                         ---------   --------   ---------   ---------
   Operating EBITDA      $ 4,585.7   $ (571.8)  $ 3,063.5   $(1,112.7)
   Operating EBITDA per
    Share                $    0.45   $  (0.06)  $    0.31   $   (0.12)
                         =========   ========   =========   =========

 Weighted Avg. # of
  Shares Outstanding -      10,206      9,151       9,727       9,102

               SILVERSTAR HOLDINGS, LTD. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                        JUNE 30, 2007 AND 2006

               ASSETS                          2007           2006
               ------                          ----           ----
 Current assets:
  Cash and cash equivalents
  (Includes restricted cash of $590,990)   $ 3,693,149    $ 9,075,259
  Cash restricted for foreign tax
   estimated liability                       1,064,040      2,933,342
  Accounts receivable, net                   6,908,846        637,135
  Inventories, net                             900,128         58,732
  Current portion of long term notes
   receivable                                  256,982        164,548
  Prepaid expenses and other current
   assets                                      669,730        292,805
  Assets available for sale                    505,650             --
                                           -----------    -----------
   Total current assets                     13,998,525     13,161,821
                                           -----------    -----------
 Property, plant and equipment, net            488,031         77,985
 Software development costs, net             5,183,033             --
 Investments in non-marketable securities    1,143,566      1,143,566
 Long term notes receivable                    214,222        458,670
 Goodwill, net                                 890,038        841,726
 Intangible assets, net                     20,611,189      1,412,854
 Deferred tax asset                            625,217             --
 Deferred charges and other assets             631,843        441,367
                                           -----------    -----------
   Total assets                            $43,785,664    $17,537,989
                                           ===========    ===========
 Liabilities and stockholders' equity
 Current liabilities:
  Lines of credit                          $ 2,875,472    $   647,797
  Current portion of long term debt                 --        180,323
  Notes payable- acquisition                 5,475,179             --
  Earn out notes payable - acquisition       3,847,426             --
  Current portion of convertible secured
   debenture                                        --        900,000
  Accounts payable                           6,959,835        304,088
  Accrued royalty expense                    2,937,887         82,643
  Accrued payroll tax expense                1,585,196         49,846
  Accrued expenses                           1,770,656        822,463
  Deposits on July 2007 private placement      630,403             --
  Estimated liability for foreign tax          616,458        600,000
                                           -----------    -----------
   Total current liabilities               $26,698,512    $ 3,587,160
                                           -----------    -----------
 Convertible secured debenture               4,790,779      2,318,455
 Other long-term liabilities                   412,363        231,892
   Total liabilities                       $31,901,654    $ 6,137,507
                                           ===========    ===========
 Preferred stock, $0.01 par value;
  5,000,000 shares authorized; no shares
   issued and outstanding                           --             --
 Common stock, Class A, $0.01 par value,
  50,000,000 shares authorized; 9,621,891
  (1,496,700 shares in treasury) and
   8,313,774 shares issued and
   outstanding, respectively                    96,218         83,138
 Common stock, Class B, $0.01 par value;
  2,000,000 shares authorized; 835,260
  shares issued and outstanding                  8,353          8,353
 Common stock, FSAH Class B $0.001 par
  value; 10,000,000 shares authorized;
  2,671,087 shares issued and outstanding          600            600
 Additional paid-in capital                 67,843,919     65,573,387
 Accumulated deficit                       (56,796,978)   (54,390,357)
 Other comprehensive income                    731,898        125,361
                                           -----------    -----------
   Total stockholders' equity              $11,884,010    $11,400,482
                                           -----------    -----------
   Total liabilities and stockholders'
    equity                                 $43,785,664    $17,537,989
                                           ===========    ===========

 The accompanying notes to these consolidated financial statements,
 which are available in the company's annual report for the period
 ended June 30, 2007 and filed with the Securities and Exchange
 Commission in Form 10-K, are an integral part of these statements.


              SILVERSTAR HOLDINGS, LTD. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS

                 For quarters ended June 30,  For years ended June 30,
                 --------------------------- -------------------------
                       2007          2006        2007         2006
                       ----          ----        ----         ----
 Net Revenues       $11,951,733    $467,295  $19,794,284   $3,316,429
 Operating Expenses:
  Cost of sales       3,358,597     124,434    6,513,072      555,184
  Development costs
   and royalties        678,105      43,529    2,133,430      942,678
  Selling, general
   and administrative 3,329,231     871,131    8,084,118    2,931,243
  Amortization of
   software
   development costs    283,626          --      337,243           --
  Amortization of
   acquired
   intangibles        1,632,529      44,745    4,235,634      148,797
  Depreciation           64,606       7,165      159,743       31,687
                    -----------  ----------   ----------   ----------
                      9,346,694   1,091,004   21,463,240    4,609,589
 Operating income
  (loss)              2,605,039    (623,709)  (1,668,956)  (1,293,160)
                    -----------  ----------   ----------   ----------
 Other income
  (expense)              (3,800)     (1,416)      (4,235)      39,959
 Foreign currency
  gains (losses)        239,450    (602,134)     246,593     (749,764)
 Acquisition costs
  incurred                   --     (36,634)          --     (321,412)
 Amortization of
  convertible debt
  discounts and
  issuance  costs       (88,883)   (461,644)    (592,405)    (769,566)
 Foreign tax expense         --    (600,000)          --     (600,000)
 Interest expense      (269,052)   (342,461)    (883,929)    (560,841)
 Interest income         79,748     308,629      484,393      633,131
                    -----------  ----------   ----------   ----------
 Income (loss) from
  continuing
  operations before   2,562,502  (2,359,369)  (2,418,539)  (3,621,653)
  income taxes
 Benefit for income
  taxes                 (25,014)         --      (11,918)          --
 Income (loss) from
  continuing
  operations          2,587,516  (2,359,369)  (2,406,621)  (3,621,653)
 Discontinued
  operations:
 Income from
  operations net of
  income taxes of $0,
  and $0,respectively        --      10,942           --      161,753

 Gain on disposition,
  net of income taxes
  of $0,and $0
  respectively               --   1,480,710           --    1,480,710
                    -----------  ----------   ----------   ----------
 Net income (loss)   $2,587,516   ($867,717) ($2,406,621) ($1,979,190)
                    ===========  ==========   ==========   ==========

 Income (loss) per
  share:
  Basic:
   Continuing
    operations            $0.25      ($0.26)      ($0.25)      ($0.39)
   Discontinued
    operations               --        0.16           --         0.18
 Net income( loss)        $0.25      ($0.09)      ($0.25)      ($0.21)
  Diluted:
   Continuing
    operations            $0.24      ($0.26)      ($0.25)      ($0.39)
   Discontinued
    operations               --        0.16           --         0.17
 Net income (loss)        $0.24      ($0.10)      ($0.25)      ($0.21)
 Weighted average
  common stock
  outstanding:
  Basic              10,205,553   9,151,177    9,726,520    9,102,286
                                 ----------                ----------
  Diluted            10,635,564   9,576,075    9,726,520    9,574,910

 The accompanying notes to these consolidated financial statements,
 which are available in the company's annual report for the period
 ended June 30, 2007 and filed with the Securities and Exchange
 Commission in Form 10-K, are an integral part of these statements.


            

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