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News Releases Company Profile
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Source
MARKET NEWS
Date
11/24/99
Company
NUVO NETWORK MANAGEMENT INC.
Title
Record Financial Results for Fiscal 1999
NUVO
NETWORK MANAGEMENT INC ("NNM-Y;NUVOF-L")
- Record Financial Results for Fiscal 1999
Nuvo Network Management Inc. announced record results from operations
for the fiscal year ended September 30, 1999.
//st
12 months ended 12 months ended
September 30, September 30,
1999 1998
Revenues $5,755,774 $2,157,807
Gross Margin 3,561,496 1,292,568
Sales General & Administrative Expenses 2,438,232 1,235,158
Research and Development 403,904 14,272
EBITDA 719,360 43,138
Interest, Depreciation and Amortization 436,339 556,113
Net Income (loss) 283,021 (512,975)
Earnings Per Common Share $0.004 (0.007)
//et
Revenues for the year ended September 30, 1999 were $5,755,774, a 167%
increase over revenues from fiscal 1998. Fourth quarter revenues were
$1,646,332, an increase of 126% over revenues of $729,768 in the fourth
quarter of fiscal 1998. Nuvo has now recorded eight sequential quarters of
revenue growth since the business was refocused to network management
services in 1997.
Net income in fiscal 1999 was $283,021, a significant reversal from a
loss of $512,975 in fiscal 1998. Fourth quarter net income was $33,439 as
compared with $122,672 in the same period a year earlier. The Company has
now recorded five consecutive quarters of profitability.
Network management services made up 94% of total revenues in fiscal
1999 compared with 81% in fiscal 1998. Recurring network management
revenues represented 73% of total revenues compared with 66% in fiscal
1998. In addition, the gross margin increased to 62% of revenues in fiscal
1999 compared with 60% of revenues in fiscal 1998.
"Fiscal 1999 was an excellent year and we are highly enthusiastic about
our Company's future prospects", said Kevin Vachon, Chairman and CEO. "In
the course of 12 months, we achieved dramatic revenue growth, profitability
and significantly developed our recurring revenue base. Moreover, our
recent equity financing has given us the tools to build on these successes
and aggressively pursue the growing network management market".
In addition to the successful financial performance in fiscal 1999,
Nuvo attained many important operational milestones during the year:
- Increased business from Nuvo's blue chip channel partners including
Cisco Systems, IBM and Sprint Canada;
- Increased R&D spending to 7% of sales, including the development of new
web-based services scheduled for release in fiscal 2000;
- 300% expansion of the Company's Network Operations Center, including
significant scaling enhancements to its delivery capabilities in order
to meet continued future growth;
- 200%+ increase in staffing from 27 on October 1, 1998 to over 80 today,
the largest critical mass of specialized personnel delivering network
management services in Canada. Key senior management staff was also
added.
In the fourth quarter of 1999, the Company successfully raised $2.5
million of equity financing from Ventures West, Bank of Montreal Capital
Corporation and senior management. The proceeds from this financing are
being used to expand operations and increase sales and marketing, better
positioning Nuvo to capitalize on the growing demand for network management
services.
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.
//st
Nuvo Network Management Inc.
Consolidated Statement of Operations
(Canadian dollars)
Fiscal quarter ended Year ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30
1999 1998 1999 1998
Unaudited Unaudited Audited Audited
Revenues
Network Management Services 1,548,442 665,313 5,385,777 1,751,618
Network Hardware & Software 97,890 64,454 369,997 406,189
1,646,332 729,767 5,755,774 2,157,807
Cost of Revenues
Network Management Services 407,646 208,386 1,949,459 596,230
Network Hardware & Software 42,176 31,555 244,819 269,009
449,822 239,941 2,194,278 865,239
Gross Margin 1,196,510 489,826 3,561,496 1,292,568
Operating Expenses
Sales, General and
Administrative 806,642 286,793 2,438,232 1,235,158
Research and development 188,348 3,568 403,904 14,272
Interest and Taxes 14,518 2,843 18,123 15,010
Amortization and Depreciation 153,563 73,950 418,216 541,103
1,163,071 367,154 3,278,475 1,805,543
Profit/(Loss) 33,439 122,672 283,021 (512,975)
Profit/(Loss) per share $ 0.00 $ 0.00 $ 0.004 $ (0.007)
Consolidated Statement of Cash Flows
Fiscal quarter ended Year ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30
1999 1998 1999 1998
Unaudited Unaudited Audited Audited
Cash provided by (used in):
Operating activities
Gain/(Loss) 33,437 122,672 283,021 (512,975)
Items not involving cash:
Amortization and depreciation 153,563 73,950 418,216 541,103
Change in non-cash operating
working capital (661,263) (143,489) (947,262) (260,056)
(474,263) 53,133 (246,025) (231,928)
Financing activities
Increase in shareholder loans
receivable (493,237) (20,621) (493,237) (20,621)
Proceeds from issuance of
share capital 107,306 (39,953) 165,557 213,287
Proceeds from issuance of
special warrants 2,500,000 0 2,500,00 0
Proceeds from long term debt (24,170) 0 119,045 0
Proceeds from capital leases 150,869 0 150,869 0
Proceeds from issuance of
debentures 0 0 0 300,000
Repayment of long term debt (88,699) (7,070) (88,699) (32,237)
Repayment of capital lease (13,576) 0 (13,576) 0
2,138,493 (67,644) 2,339,959 460,429
Investing activities
Purchase of capital assets (288,752) (139,530) (620,200) (139,530)
Proceeds on sale of capital
assets 55,577 56,771
(288,752) (83,953) (620,200) (82,759)
Increase (decrease) in cash
during the period 1,375,478 (98,464) 1,473,734 145,742
Cash , beginning of period 244,981 245,189 146,725 983
Cash , end of period $1,620,459 $146,725 $1,620,459 $146,725
Nuvo Network Management Inc.
Consolidated Balance Sheets
(Canadian dollars)
September 30, 1999 September 30, 1998
Audited Audited
ASSETS
Current:
Cash 1,620,459 146,725
Accounts receivable 1,861,061 912,190
Inventories 123,356 249,651
Prepaids & deposits 408,162 38,823
4,013,038 1,347,389
Shareholder loans receivable 513,858 20,621
Capital assets 1,123,912 804,255
Goodwill 1,176,733 1,294,405
Total Assets 6,827,541 3,466,670
LIABILITIES
Current:
Accounts payable and accrued
liabilities 1,510,746 1,138,223
Contract billings in excess of
revenue earned 391,863 519,734
Current portion of long term debt 114,227 77,958
2,016,836 1,735,915
Long term debt 135,312 3,942
Total liabilities 2,152,148 1,739,857
SHAREHOLDERS' EQUITY
Share capital 18,719,443 16,053,884
Deficit 14,044,050 14,327,071
4,675,393 1,726,813
Total Liabilities and Shareholders'
Equity 6,827,541 3,466,670
//et
TEL: (613) 236-0909 x305 Heather McCulligh, Consultant
High Road Communications
EMAIL: hmcculligh@highrd.com
TEL: (613) 721-6886 x117 Doug Carwardine, Vice President
Strategic Marketing
Nuvo Network Management Inc.
EMAIL: dcarwardine@nuvo.com
INET : www.nuvo.com
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