$$$$NEWS$$$Attention Business/Financial Editors:
Nuvo Reports Record Results for Q4 & Fiscal 2000
Revenues Increase 75% Q4 over Q4, 63% Year over Year
Twelve Consecutive Quarters of Revenue Growth
OTTAWA, ON, Dec. 7 /CNW/ - Nuvo Network Management Inc. (CDNX:NNM), today
announced record results from operations for the fourth quarter and fiscal
year ended September 30, 2000.
Revenues for the fourth quarter ended September 30 were $2,885,209, an
increase of 75% over revenues of $1,646,332 in the fourth quarter of fiscal
1999. Revenues for the fiscal year ended September 30, 2000 were $9,387,330, a
63% increase over revenues of $5,755,774 in fiscal 1999. Nuvo has now recorded
twelve consecutive quarters of revenue growth since the Company focused on
developing and delivering network management services in fiscal 1998.
The fourth quarter net loss was $286,602 as compared with net income of
$33,439 in the fourth quarter of fiscal 1999. The net loss in fiscal 2000 was
$1,061,566 as compared with net income of $283,021 in fiscal 1999. Consistent
with management's expectations, the loss primarily reflects investments in
R&D, sales/marketing and corporate infrastructure spending required to
properly position the Company to seize the growing opportunity in the
management of mission critical e-business networks.
"We achieved our growth targets in fiscal 2000 while taking the necessary
measures to invest in new service offerings and scale our business
infrastructure," said Kevin Vachon, Chairman and CEO. "Our partner
relationships are stronger, our customer base is larger, our service portfolio
is more comprehensive and we are operationally more efficient. Also, we have
successfully recruited a strong team of senior executives across all
departments in the Company. We are now positioned to further leverage our
network management expertise into new global opportunities in fiscal 2001 and
beyond."
In addition to the record revenue growth in fiscal 2000, Nuvo attained
many important operational milestones during the year:
- Nuvo's customer base increased from 38 to 55 composed of industry
leading corporations across diverse vertical markets. With Nuvo's
impeccable customer retention rate, downstream annuity revenues from
upselling of services remain important characteristics in Nuvo's
subscription-based business model;
- R&D expenditures were $1,390,124, increasing to 15% of revenues from 7%
in fiscal 1999. R&D conducted in fiscal 2000 included the development
of Nuvo webCenter(TM), a server management offering, security
management and Voice over IP (VoIP) management projects;
- A 63% increase in revenues in fiscal 2000 was achieved with a 36%
increase in headcount from 75 to 102, indicating improving operational
productivity;
- Nuvo advanced service quality measures in fiscal 2000. Nuvo now boasts
industry-leading metrics such as Mean Time to Act (MTTA) of under 2
minutes. Customers are proactively notified of network problems 98.3%
of the time from Nuvo's 7/24 Network Operations Center (NOC) and Nuvo's
service level agreements (SLAs) have resulted in customers consistently
attaining high network availability targets;
- The Company expanded its corporate facilities in Ottawa, Toronto and
Montreal during fiscal 2000 followed by the recent establishment of
Nuvo's US headquarters in Chicago;
- The appointment of key senior management in fiscal 2000 included Ron
Brophy, VP Marketing; Ken Flack, EVP Technical Operations; and Ray
Kindiak, CFO and EVP Corporate Development. This has been followed by
the recent hiring of Bob Welling, VP Sales - Canada and Jon Toops, VP
Sales - US;
- The Company directly raised $5.3 million in a special warrants
financing from current institutional shareholders and new investors,
delivering a strong vote of confidence in Nuvo's corporate
advancements. As at the fiscal 2000 year end, the Company had $5.3
million in cash and short-term investments. This maintains Nuvo's
strong financial position to support future growth.
About Nuvo
----------
Nuvo provides remote network management services to enterprises requiring
mission-critical solutions for their complex network infrastructures.
Employing over 100 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 Systems, IBM, Sprint Canada
and Netricom, Nuvo delivers services to Fortune 500 corporations and
government departments located in Canada and the United States requiring
global network management solutions.
The Canadian Venture Exchange has neither approved nor disapproved the
content of this press release.
NUVO NETWORK MANAGEMENT INC.
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Consolidated Statements of Operations
Quarter and Year Ended September 30, 2000
(Canadian Dollars)
-------------------------------------------------------------------------
Fiscal Quarter Ended Fiscal Year Ended
-------------------------- --------------------------
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
Unaudited Unaudited Audited Audited
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Revenues $ 2,885,209 $ 1,646,332 $ 9,387,330 $ 5,755,774
Costs of revenues 1,326,774 449,822 4,566,338 2,194,278
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Gross margin 1,558,435 1,196,510 4,820,992 3,561,496
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Selling and
administration 1,244,534 733,503 4,403,329 2,716,835
Research and
development 623,632 400,318 1,390,124 403,904
Amortization of
goodwill 29,418 29,418 117,672 117,672
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1,897,584 1,163,239 5,911,125 3,238,411
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Operating income
(loss) (339,149) 33,271 (1,090,133) 323,085
Interest and other
income 72,513 9,418 107,851 1,918
Interest expense (19,966) (9,250) (79,284) (41,982)
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Income (loss) before
income taxes (286,602) 33,439 (1,061,566) 283,021
Income taxes
Current provision - 7,600 - 64,000
Reduction as a
result of loss
carry forwards - (7,600) - (64,000)
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- - - -
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Net income (loss)
for the period $ (286,602) $ 33,439 $(1,061,566) $ 283,021
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Basic and fully
diluted
earnings (loss) $ (0.003) $ - $ (0.013) $ 0.004
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Consolidated Statements of Cash Flows
Quarter and Year Ended September 30, 2000
(Canadian Dollars)
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Fiscal Quarter Ended Fiscal Year Ended
-------------------------- --------------------------
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
Unaudited Unaudited Audited Audited
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CASH FLOWS PROVIDED BY (USED IN)
Operations
Net income (loss)
for the period $ (286,602) $ 33,439 $ (1,061,566) $ 283,021
Add (deduct) items
not affecting
cash:
Depreciation
and amor-
tization 107,020 153,563 488,166 418,216
Other gains
and losses 4,935 - 4,983 -
Changes in non-
cash working
capital:
Accounts
receivable 56,543 (1,116,331) 573,993 (948,871)
Inventory - 49,338 - 49,338
Work in
process (405,085) 204,211 (1,532,637) 76,957
Prepaid
expenses (9,506) (308,168) (18,175) (369,339)
Accounts
payable
and accrued
liability (291,622) 31,592 81,269 372,524
Deferred
revenue 11,523 391,863 (142,651) (127,871)
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(812,794) (560,493) (1,606,618) (246,025)
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Financing
Additions
to loans
receivable - (466,667) - (554,667)
Repayment
of loans
receivable 22,799 30,281 120,593 61,430
Proceeds
from long-
term obli-
gations 72,410 181,689 510,676 269,914
Repayment
of long-
term obli-
gations (43,735) (29,892) (216,565) (52,275)
Issuance of
common
shares - net 95,833 154,904 395,764 163,655
Issuance of
special
warrants
- net 5,198,778 2,451,902 5,198,778 2,451,902
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5,346,085 2,322,217 6,009,246 2,339,959
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Investing
Purchase of
capital
assets - net 30,430 (436,246) (715,912) (620,200)
Purchase
of short-term
investments (4,401,022) - (4,401,022) -
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(4,370,592) (436,246) (5,116,934) (620,200)
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Net increase
(decrease) in
cash and cash
equivalents 162,699 1,325,478 (714,306) 1,473,734
Cash and cash
equivalents,
beginning of
period 743,454 294,981 1,620,459 146,725
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Cash and cash
equivalents,
end of period $ 906,153 $1,620,459 $ 906,153 $1,620,459
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NUVO NETWORK MANAGEMENT INC.
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Consolidated Balance Sheets
As at September 30, 2000
(Canadian Dollars)
-------------------------------------------------------------------------
September September
30, 2000 30, 1999
Audited Audited
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents $ 906,153 $ 1,620,459
Short-term investments 4,401,022 -
Accounts receivable 1,287,068 1,861,061
Work in process 1,655,993 123,356
Prepaid expenses 426,337 408,162
Current portion of loans receivable 18,000 20,000
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8,694,573 4,033,038
Loans receivable 375,265 493,858
Capital assets 1,464,347 1,123,912
Goodwill 1,059,061 1,176,733
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$11,593,246 $ 6,827,541
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LIABILITIES
Current
Accounts payable and accrued liabilities $ 1,592,015 $ 1,510,746
Deferred revenue 249,212 391,863
Current portion of long-term obligations 328,406 114,227
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2,169,633 2,016,836
Long-term obligations 215,244 135,312
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2,384,877 2,152,148
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SHAREHOLDERS' EQUITY
Share capital 10,499,889 18,719,443
Deficit 1,291,520 14,044,050
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9,208,369 4,675,393
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$11,593,246 $ 6,827,541
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%SEDAR: 00003630E
-0- 12/07/2000
For further information: Ray Kindiak, CFO and EVP Corporate Development, Nuvo Network Management Inc., Tel: (613) 721-6886, Ext. 112, e-mail: rkindiak@nuvo.com, www.nuvo.com
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