NNM has $$$$$$$$$$$$$$$$$$ NEWS OUT!!!
Nuvo Reports FY2000 Q1 Results
Revenues Increase 51% Q1 00 over Q1 99
Managed Networks Increase 30% Q1 00 over Q4 99
OTTAWA, ON, February 11 /CNW/ - Nuvo Network Management Inc. (CDNX:NNM),
a leading remote network management services provider, is pleased to announce
its results for the first quarter of fiscal 2000 ended December 31, 1999.
Revenues for the quarter ended December 31, 1999 were $1,750,667, a 51%
increase over the same period of fiscal 1999 and a 6% increase over the fourth
quarter of fiscal 1999. Nuvo has now recorded nine sequential quarters of
revenue growth since the business was refocused to network management services
in 1997. Recurring revenues represented 78% of sales, up from 74% in fiscal
1999. Consistent with management's expectations, the Company experienced a
net loss of $296,974 or $(0.004) per share in the first quarter of fiscal
2000, as compared with a profit of $138,712 in the same period of fiscal 1999.
``We are very pleased with our financial performance given our objectives
of investing in building infrastructure for rapid growth,' said Kevin Vachon,
Chairman and CEO. With our clients and client prospects beyond their Y2K
concerns, we are very excited about accelerated growth for the balance of
fiscal 2000 and beyond.'
In addition to meeting its financial targets, Nuvo attained important
operational accomplishments during the quarter, including:
- Increase during the quarter in the number of networks managed from 30
to 39;
- Continued blue-chip customer development from our main channel
partners;
- Focused R&D spending being 6% of sales, resulting in the launch on
January 26th, 2000 of webCenter (being the complete webification of
Nuvo's rNMS Series core services) and new engineering services launched
February 7, 2000;
- Expansion of sales and marketing, with key new hires in the areas of
direct sales, product management, marketing and channel management.
During the quarter, market awareness of remote network management
services continued to grow. In addition to expanded industry coverage, the
following recent statistics further highlight the market opportunity for Nuvo:
- The worldwide market for Managed Network Services (a component of
Nuvo's market) is growing faster than originally projected with network
operations representing the fastest growth portion of MNS, at 58% of a
total MNS market of US$4.5 billion by 2002 (Yankee Group 12/99);
- Internet traffic is growing at a rate of 100% every 3 months and other
packet data traffic is growing by 70% annually (AT&T 2/00).
With the explosive growth in corporate data network traffic and the trend
to outsourcing continuing, Nuvo, with its scaleable network management
infrastructure in place, is ideally positioned to exploit this opportunity in
the remainder of fiscal 2000 and beyond.
Nuvo provides remote network management services to enterprises requiring
mission-critical solutions for their complex network infrastructures.
Employing over 80 industry professionals, Nuvo delivers web-enabled, end to
end services for LAN/WAN-based networks and networks of the new Internet
economy. Through channel partners including Cisco, Sprint and IBM, Nuvo
delivers services to Fortune 500 corporations and government departments
located in Canada and the United States requiring global network management
solutions.
Nuvo Network Management Inc.
Consolidated Balance Sheet
Three Months Ended December 31, 1999 (Canadian Dollars)
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December 31, September 30,
1999 1999
Unaudited Audited
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Assets
Current:
Cash $ 1,089,026 $ 1,620,459
Accounts receivable 1,455,873 1,861,061
Inventories 991,529 123,356
Prepaids & deposits 319,387 408,162
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3,855,815 4,013,038
Shareholder Loans Receivable 477,174 513,858
Goodwill 1,147,585 1,123,912
Capital Assets 1,222,854 1,176,733
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Total Assets $ 6,703,428 $ 6,827,541
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Liabilities
Current:
Accounts payable and accrued
liabilities $ 1,425,967 $ 1,510,746
Contract billings in excess of
revenue earned 254,079 391,863
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1,680,046 1,902,609
Long Term Obligations 317,095 249,539
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Total Liabilities 1,997,141 2,152,148
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Shareholders' Equity
Share capital 19,047,311 18,719,443
Deficit $ (14,341,024) $ (14,044,050)
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Total equity 4,706,287 4,675,393
Total Liabilities and Equity $ 6,703,428 $ 6,827,541
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NOTICE TO READER
We have compiled the consolidated balance sheet as at December 31, 1999
and the statements of income and cash flows for Nuvo Network Management Inc.,
for the three months ended December 31, 1999 from information provided by
management. We have not audited, reviewed or otherwise attempted to verify
the accuracy or completeness of such information. Readers are cautioned that
these statements may not be appropriate for their purpose.
Cox, Merritt & Co. LLP
Chartered Accountants, Kanata, Ontario
January 10, 2000
Nuvo Network Management Inc.
Consolidated Statement of Operations
Three Months Ended December 31, 1999 (Canadian Dollars)
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Fiscal Quarter Ended
December 31, December 31,
1999 1998
Unaudited Unaudited
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Sales
Network management services $ 1,516,472 $ 1,143,046
Network hardware & software 234,195 13,303
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1,750,667 1,156,349
Cost of Sales
Network management services 713,855 309,606
Network hardware & software 154,360 10,189
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868,215 319,795
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Gross Margin 882,452 836,554
Operating Expenses
Sales, general and administrative 943,736 602,451
Interest and taxes 6,718 8,770
Research and development 115,178
Amortization and depreciation 113,794 86,621
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1,179,436 697,842
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Profit/(Loss) (296,974) 138,712
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Profit/(Loss) Per Share $ (0.004) $ 0.002
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Consolidated Statement of Cash Flows
Three Months Ended December 31, 1999 (Canadian Dollars)
-------------------------------------------------------------------------
Fiscal Quarter Ended
December 31, December 31,
1999 1998
Unaudited Unaudited
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Cash Flows From Operating Activities
Receipts from customers $ 2,018,072 $ 824,415
Payments to suppliers (2,791,306) (679,362)
Interest paid (6,718) (8,770)
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(779,952) 136,283
Cash Flows From Financing Activities
Repayment from shareholder loans receiva 36,684 0
Increase (repayment of) in long term obl 67,556 (7,461)
Proceeds from issuance of share capital 327,868 0
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432,108 (7,461)
Investing Activities
Purchase of capital assets (183,589) (57,072)
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Increase (Decrease) In Cash During
The Period (531,433) 71,750
Cash and Cash Equivalents, Beginning
Of Period 1,620,459 146,725
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Cash and Cash Equivalents, End Of Period $ 1,089,026 $ 218,745
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NOTICE TO READER
We have compiled the consolidated balance sheet as at December 31, 1999
and the statements of income and cash flows for Nuvo Network Management Inc.,
for the three months ended December 31, 1999 from information provided by
management. We have not audited, reviewed or otherwise attempted to verify
the accuracy or completeness of such information. Readers are cautioned that
these statements may not be appropriate for their purpose.
Cox, Merritt & Co. LLP
Chartered Accountants, Kanata, Ontario
January 10, 2000
The Canadian Venture Exchange has neither approved nor disapproved the
content of this press release.
%SEDAR: 00003630E
-30-
For further information: Doug Carwardine, Vice President, Business
Development, Nuvo Network Management Inc., Tel: (613) 721-6886, Ext. 117,
e-mail: dcarwardine@nuvo.com, www.nuvo.com
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