Tuesday August 22, 6:33 pm Eastern Time
Press Release
SOURCE: Unique Broadband Systems, Inc.
Unique Broadband Systems Announces Improved Earnings for Fiscal 2000
Significant Growth in Both Revenue & Earnings for Fiscal 2001 Expected From Major Contracts Announced in Fiscal 2000
CONCORD, ON, Aug. 22 /CNW-PRN/ - Unique Broadband Systems, Inc. (CDNX: UBS - news), recognized worldwide as a leader in the design, development and manufacture of broadband wireless solutions, today reported its consolidated results for its fiscal year ended May 31, 2000. For the year, UBS had net earnings of $249,951 or $0.003 per common share. Excluding losses relating to the company's two satellite offices (as discussed below), the company's earnings were $495,951, which represents an increase of 514% over 1999. These results compare with earnings of $80,755 or $0.001 per common share for the year ended May 31, 1999. Consolidated sales for fiscal 2000 ($9.208 million) were slightly less than those in fiscal 1999 ($9.268 million). However, improved gross margins and a tighter control on selling and administrative expenses have resulted in higher earnings over fiscal 1999.
UBS had cash on hand in the amount of $36.5 million as at May 31, 2000 compared to $1.6 million as at May 31, 1999. This increase is due to the private placement in March 2000, which yielded net proceeds of $38 million. Capital additions in fiscal 2000 totaled approximately $2 million, the bulk of which related to leasehold improvements at the company's new state-of-the-art R&D and manufacturing facility. This facility provides UBS with increased manufacturing and production/assembly capacity, as well as the space necessary to accommodate its larger workforce, both of which are required to pursue top line sales growth.
Research and development expenses declined in fiscal 2000 from fiscal 1999. Although research and development activities actually increased in fiscal 2000, as compared to fiscal 1999, the expenses relating to such activities have been deferred to fiscal 2001 in order that they be matched against the specific contracts to which they relate, which will be completed in fiscal 2001.
Selling and administrative expenses increased over fiscal 1999 as a result, in part, of the investment by UBS in additional personnel, a new facility and the expansion of its product lines. This investment by the company was necessary in order to execute on its two large contracts with Hughes Network Systems and Hong Kong Cable T.V., as well as to continue to pursue other growth initiatives. In addition, such expenses also include $49,000 in connection with the closing of the company's Montreal operations and a loss of $197,000 arising from the company's operations in Russia. The latter loss is the result of marketing and start-up costs associated with the opening of this office. Based on the success of the Russian operations to date, management anticipates that the Company's operations in Russia will be cash flow positive and will generate net earnings for UBS, which will add to its bottom line by the end of fiscal 2002.
Sales under the contracts with Hughes Network Systems and Hong Kong Cable, which were both awarded in fiscal 2000, as well as with Bell Canada, which was awarded in the current fiscal year, are expected to materialize in the second quarter of the current (fiscal 2001) year and continue for the balance of the year. During fiscal 2000 and in the first quarter of the current fiscal year, a small amount of revenue from both Hughes and Hong Kong Cable was realized in the form of design fees relating to the prototypes UBS shipped in the first quarter of fiscal 2001.
``The results of operations for the 2000 fiscal year were in line with the expectations of management,'' stated Stephen J. Rosen, CFO of UBS. `` Based on management's expectation of the commencement and ramp-up of production under the existing contracts in this fiscal quarter, revenues for the second quarter and for the remainder of fiscal 2001 should increase. This should result in significant growth to the bottom line as well.''
With respect to its contract with Hughes, UBS has now received purchase orders totaling in excess of $70 million. Fiscal 2000 revenue reflects approximately $5 million of these orders.
``Given that deliveries under the balance of these purchase orders are expected to be made in the current fiscal year, we expect that they should add approximately $65 million to revenue in fiscal 2001,'' added Rosen.
About Unique Broadband Systems, Inc.
Unique Broadband Systems, Inc. (UBS) is recognized worldwide as a leader in the design, development and manufacture of broadband wireless solutions. UBS focuses on COFDM based high-speed mobile solutions (DAB, SDARS and High- Speed Mobile Multimedia) and fixed wireless multimedia (MMDS, MVDS and LMDS). A commitment to research and innovation has enabled UBS to expand its position in the growing markets of digital radio, satellite digital radio and the transmission of wireless multimedia. The company's extensive product line is combined with system design, installation, maintenance and technical support to provide customers with total system solutions. UBS has offices in the United States, Canada and Russia.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
Year Ended
May 31, 2000 May 31, 1999
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Sales 9,207,855 9,267,952
Cost of sales 3,740,819 4,209,740
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Gross Profit 5,467,036 5,058,212
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Expenses
Research and development 1,308,981 2,171,658
Selling and administrative 3,194,457 2,208,660
Interest on long term debt 151,537 189,591
Amortization 562,110 407,548
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5,217,085 4,977,457
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Net earnings for the year $ 249,951 $ 80,755
Earnings per share $ 0.003 $ 0.001
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Weighted average number of shares 88,954,698 69,860,158
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CONSOLIDATED BALANCE SHEETS
May 31, 2000 May 31, 1999
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Assets
Current assets $44,898,882 $ 5,032,873
Capital assets 3,006,562 1,562,077
Other assets 2,803,821 2,131,040
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$50,709,265 $ 8,725,990
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Liabilities and Shareholders' Equity
Current liabilities 1,800,972 2,039,916
Convertible debt - 457,283
Obligations under capital leases 95,693 301,335
Long-term debt 277,776 616,823
Shareholders' equity 48,534,824 5,310,633
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$50,709,265 $ 8,725,990
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CONSOLIDATED STATEMENTS OF CASH FLOWS
May 31, 2000 May 31, 1999
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Cash flows from operating activities
Net earnings for the year $ 249,951 $ 80,755
Adjustments for amortization 562,110 407,548
Adjustments for loss (gain)
on sale of capital assets 9,705 -
Adjustments for interest on
conversion of debt 7,159 -
Adjustments for interest earned on
related party loans (78,730) -
Changes in non-cash working
capital balances (4,945,305) (2,237,071)
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(4,195,110) (1,748,768)
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Cash flows from financing activities
Repayment of capital lease liability (317,804) (275,171)
Repayment of long term debt (421,702) (224,322)
Proceeds from issuance of
share capital (net) 41,815,811 3,824,014
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41,076,305 3,324,521
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Cash flows from investing activities
Purchase of capital assets (2,016,300) (252,424)
Due from related parties (9,253) 11,668
Shareholder loan (10,699)
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(2,017,746) (240,756)
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Increase in cash during the year 34,863,449 1,334,997
Cash at beginning of year 1,643,511 308,514
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Cash at end of year $36,506,960 $ 1,643,511
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visit www.uniquesys.com. |
