Press Release
For Release On
September 14, 1998
For more information, contact:
Nika Herford
Vice-President, Public Relations
Net Nanny Software Inc.
Telephone: (425) 688-3008
Email: <mailto:NikaH@netnanny.com> PR@netnanny.com
Brad McLean
Investor Relations
Net Nanny Software International Inc.
Telephone: (604) 662-8522
Email: <mailto:IR@netnanny.com> IR@netnanny.com
Net Nanny Significantly Expands Revenues
and Trims Loss per Share; Company Now Reporting in U.S. Dollars
Vancouver, British Columbia, Canada, - Net Nanny Software International Inc.
(NNS.V, NNSWF) today announced its audited financial results for the fiscal
year ended June 30, 1998. Sales increased significantly to $561,000 U.S. -
an increase of $430,000 or an additional 328% over the $131,000 reported for
1997. Loss per share for the year was trimmed to $0.07 U.S. against $0.19
for 1997 due to the increase in revenues through its marketing initiatives.
The following figures are taken from the Company's audited financial
statements:
CONSOLIDATED STATEMENTS OF OPERATIONS
(expressed in U.S. dollars)
FOR THE YEARS ENDED JUNE 30, 1998, 1997, AND 1996
1998 1997 1996
$ $ $
Sales 561,698 131,303 96,497
Cost of sales 107,779 51,591 47,493
Gross margin 453,919 79,712 49,004
Expenses
General and administrative 597,483 423,937
358,060
Marketing and selling 537,619 254,687
239,699
Research and development 90,536 72,115
162,995
Amortization 24,357 333,885
59,026
Write-off of Capital assets - 112,912
-
Write-off of Other assets -
142,590 -
1,249,995 1,340,126
819,780
Loss from operations (796,076) (1,260,414) (770,776)
Interest income 38,681 -
-
Loss for the year (757,395) (1,260,414)
(770,776)
Loss per common share (0.07) (0.19) (0.14)
In addition, the Company is pleased to report that gross profit margins
improved to 82% against 62% for the prior year and the 51% recorded in 1996.
General and administrative costs were equal to 106% of sales during the
year, a dramatic improvement over the 323% of sales in 1997. Marketing and
selling costs increased 111% in 1998 due to increased advertising
expenditures and the addition of new employees with the resultant increases
in travel and marketing overheads. However, these costs, as a percentage of
sales, decreased solidly to 95% from 194% ($254,000) and 248% ($239,000) of
sales in 1997 and 1996 respectively.
Research and development costs increased 26%. The number of R&D personnel
grew significantly from one to six people with the majority of these joining
the Company in the last quarter of 1998.
Cash surplus positions in 1998 allowed the Company to earn $38,000 U.S. of
interest income for the year. The Company held $1,298,000 U.S. in working
capital at the year end and is debt-free.
"Among other things, this growth in revenues is attributable to the
additional funding received by the Company last November for increased
marketing and selling initiatives already underway" said Gordon Ross,
President and CEO of Net Nanny. "As the market for our products matures and
our position within the market is further enhanced through continuing high
brand-name recognition and industry and market awareness, we anticipate that
this will translate into significant future growth."
"As examples of this increasing market and brand recognition," Ross
continued, "the Company now receives an average of 6.5 million hits a month
on its web-site and is now in the top 5,000 of the most visited sites on the
Internet. In addition, it receives 15,000 unique visitors per day who view
some 50,000 pages every day. We believe these figures move the Company into
site traffic metrics that are attractive to a wide spectrum of advertisers."
The Company intends to capitalize on this interest through advertising space
sales.
"As more people venture online and continue to integrate the Internet into
their lives, the more popular our solutions become" continued Ross.
"Current estimates show that there are approximately 120 million Internet
users and 245 million PC users worldwide. By the year 2000, these numbers
are expected to rise to 200 million and 400 million respectively. The
demand for technology such as ours that allows a diverse global population
to maintain their data according to their own criteria and personal beliefs
is poised for explosive growth."
The Company is also pleased to report that interest in its patented
BioPassword* biometric technology alpha demo, available for download at the
biopassword.com and the netnanny.com sites, has been high.
On behalf of the Board of Directors,
Net Nanny Software International Inc.
David R. Lewis, B. Eng., C.A.
Chief Financial Officer
Certain statements identified as "forward looking statements" in this Press
Release are not based on historical facts, but are instead based upon a
number of assumptions concerning future conditions that may ultimately prove
to be inaccurate. Actual events and results may materially differ from
anticipated results described in such statements. The Company's ability to
achieve such results is subject to certain risks and uncertainties,
including but not limited to, adverse business conditions in the industries
served by the Company and the general economy, competition, new laws and
regulations impacting the products that the Company provides, and other risk
factors affecting the Company's business beyond the Company's control.
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this Press Release.
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