NHC Communications Inc. ends fiscal year with a 204% increase in fourth quarter sales
06:01 GMT-04:00 Wednesday, September 13, 2000
- Quarterly revenue grows to record $8.6 million;
- Earnings per share of $0.06
Highlights for the quarter:
- Execution of contract with major competitive local exchange carrier
(CLEC) customer ahead of schedule, delivering 99 units in fourth
quarter
- Won new customer, Uunet Italia, during the fourth quarter
- Announced joint sales and marketing agreement with LINMOR Technologies
Inc. to provide integrated performance managed cross-connect solution
- Significantly strengthened senior management team
- Opened US subsidiary
MONTREAL, Sept. 13 /CNW/ - NHC Communications Inc. (TSE: NHC), a leading provider of carrier class test access and deployment solutions for the Digital Subscriber Line (DSL) service market, ended its fiscal year on a high note, announcing a record 204 percent increase in fourth quarter sales. NHC's fourth quarter and fiscal year ended August 4, 2000.
"Quarterly sales and EBIT (earnings before interest and taxes) reached all time highs for one quarter in the Company's 15-year history," said Sylvain Abitbol, President and CEO of NHC. "NHC had strong sequential growth throughout fiscal 2000 and we expect this trend to continue into 2001."
Sales for the quarter were $8.6 million, up 204% from $2.8 million for the comparable period last year. Operating income from continuing operations was $908,000 compared with a loss from continuing operations of $1.6 million in the fourth quarter of 1999. Net income for the quarter increased $2.5 million to $805,000, or $0.06 per share, compared to a net loss of $1.7 million, or $0.14 per share for the same period in 1999.
For the year, sales increased 33% to $15.7 million, from $11.7 the previous year. Operating loss from continuing operations was $1.5 million compared with a loss of $2.4 million a year ago. Net loss for the year was $2.8 million and included restructuring costs of $1.2 million. For the year, the loss per share was $0.20 compared with a loss per share of $0.17 last year.
Other financial and operational highlights for the year included:
- $1 million in net earnings, excluding restructuring costs;
- Profitability achieved despite significant increase in US sales and
marketing expenses;
- Excellent working capital management; ratios of days of sales and
inventory turns superior to industry standards;
- Positive EVA (Economic Value Added); NHC has maximized its capital
available to finance future growth. This has been achieved by
maintaining capital employed of previous quarters, despite significant
growth in sales.
Contract wins and backlog
A $20 million contract with a major US-based Competitive Local Exchange Carrier (CLEC) contributed to NHC's strong performance. The forecast number of VCCS(TM) units to be sold to this customer rose thus increasing the value of the contract to approximately $26 million, if fully realized, over the next two years. As at August 4, 2000, NHC had shipped 143 VCCS(TM) units, almost all during the last half of the fiscal year (38 units in the third quarter and 99 units in the fourth quarter).
At the end of fiscal 2000, the Company also announced that Uunet Italia, a WorldCom company, purchased NHC's VCCS(TM) solution for the deployment of DSL technology. NHC's VCCS(TM) solution will be used for the provision of high- speed Internet services in selected markets across Italy. Uunet's first installation of VCCS(TM) is scheduled for the first quarter 2001.
Since the beginning of the current quarter, one month ago, NHC's shipments to date and its current order backlog, to be shipped during the remainder of the quarter, have risen to $4.7 million.
During the year, NHC took several steps to ensure its success in the global DSL market, including:
- Establishing several strategic alliances with key DSL vendors in the US
and Europe to benefit from cross-sales referrals and shared customer
bases;
- Strengthening of NHC's senior management team to include leading
industry executives and a new Board member with extensive experience in
the field of telecommunications; and
- Opening NHC Communications USA, Inc., a wholly-owned subsidiary, to
facilitate the acceleration of NHC's sales and marketing efforts in the
fast growing US DSL market.
"We have invested in an aggressive marketing program to sustain the Company's recent sales momentum in the United States and Europe," continued Mr. Abitbol. "Looking ahead, our focused growth strategy positions us for continued success in the global DSL market."
NHC's focused growth strategy has several key elements:
- Marketing to CLECs, Incumbent Local Exchange Carriers (ILECs) and
Multiple Tenant Units (MTUs) with a complete line of products based on
the same software platform;
- Partnerships with major test equipment, DSLAM and OSS vendors to
benefit from cross sales referrals;
- Partnerships with key international vendors seeking to provide totally
integrated solutions for managing DSL networks through recently
released "Tool Kit Software";
- VCCS' modular design allows for smaller initial configurations and for
our customers to expand as their own market penetration evolves.
The ability to return to equity markets significantly enhanced NHC's financial position. In March 2000, the Company completed a successful special warrants offering, contributing to a strong cash balance of $9.6 million at the end of the year, compared with $1.5 million at the end of fiscal 1999. During the year, NHC also completely paid down its operating bank loan and in the fourth quarter, redeemed the Company's remaining secured convertible debentures. As at August 4, 2000, shareholders' equity stood at $13.3 million compared with $5.5 million at July 31, 1999.
"NHC is in a strong financial position to fund growth," said Mr. Abitbol. "With a strong balance sheet, increased cash balance, and reduced debt levels, the Company is enjoying renewed interest from the equity markets.
"In this regard, NHC's management is at all times exploring various opportunities to increase shareholder value, improve the profile of the Company and increase liquidity. Among such opportunities being considered, and typical of any company in the high-tech sector, would be the exploration of obtaining a listing on NASDAQ. However, at this time, no filing has been made and no definitive timetable has been set for a possible NASDAQ listing."
NHC Communications Inc. is an international leader in the design and manufacture of innovative remotely controlled physical layer cross-connect solutions for established and next-generation voice/data networks. With a unique range of technologies developed from years of experience, NHC is now at the heart of today's corporate enterprise service market and the telecommunications industry.
NHC may be contacted through its web site: www.nhc.com |
