[0] Centrinity Reports Record Revenue, Product Milestones in Third Quarter.Business Editors MARKHAM, Ontario Markham (2006 Population 261,573[0]) is located in York Region, directly north of Toronto, and is part of Toronto's CMA. It is larger than many Canadian cities. Despite its qualifications regarding population, it has not had the title of city conferred upon it by the , Canada--(BUSINESS WIRE)--Aug. 22, 2000 Centrinity Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CTI (Computer Telephone Integration) Combining data with voice systems in order to enhance telephone services. For example, automatic number identification (ANI) allows a caller's records to be retrieved from the database while the call is routed to the appropriate party. ), a world leader in the development and marketing of unified communications The real time redirection of a voice, text or e-mail message to the device closest to the intended recipient at any given time. For example, voice calls to desk phones could be routed to the user's cellphone when required. and collaborative groupware Software that supports multiple users working on related tasks in local and remote networks. Also called "collaborative software," groupware is an evolving concept that is more than just multiuser software which allows access to the same data. technologies, today reported record revenue of $3.7 million for the third quarter of fiscal 2000. "The third quarter of fiscal 2000 was one of tremendous progress for Centrinity," said president and chief executive officer, Myles In Greek mythology, Myles was a son of Lelex, king of Laconia. He was brother to Polycaon, and was the father of Eurotas, who was father to Sparta after whom the city of Sparta was named. Myles was also known as the Miller, and has been regarded as the inventor of the mill. McGovern Mc·Gov·ern , George Stanley Born 1922. American politician. A U.S. senator from South Dakota (1963-1981), he opposed the Vietnam War and was defeated as the 1972 Democratic candidate for President. . "Not only did we gain well-deserved well-deserved adj → merecido well-deserved well adj → (bien) mérité(e) well-deserved well adj → visibility from a new listing on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. , being recognized as an industry leader by IDC and exciting new product launches, but we exceeded even our own expectations with record revenue growth and order volume. "We also reached important milestones on the product front during the quarter," McGovern continued. "These included being recognized by International Data Corp. for our product leadership in Integrated Collaborative Environments, and the launch of two exciting new products: an enhanced version of FirstClass FirstClass is a client/server groupware, email, online conferencing, voice/fax services, and bulletin-board system for Windows, Macintosh, and Linux. The product is currently owned by Open Text's FirstClass Division, has over 9 million users[1] and runs on Windows, Gold and our revolutionary unified communications solution, FirstClass Unified Messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. (UM), a telephony-grade, fully unified technology that allows users to directly capture, consolidate, sort and prioritize pri·or·i·tize v. pri·or·i·tized, pri·or·i·tiz·ing, pri·or·i·tiz·es Usage Problem v.tr. To arrange or deal with in order of importance. v.intr. messages from any source -- e-mail, voice or fax -- any time, any where, from any device. "FirstClass UM is already being well received by the market. New contracts signed during the quarter included two orders from each of Canada and the U.S. for FirstClass UM, which we began shipping at the end of June." Revenue for the three months ended June 30, 2000, rose 97 percent to $3.7 million -- nearly double the $1.9 million generated in the same quarter last year after accounting for the June 1999 acquisition of the SoftArc group on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, and up 48 percent from $2.5 million last quarter. Strong growth was mainly attributable to escalating global demand for Centrinity's state-of-the-art solutions and initial success in upgrading existing customers to their new FirstClass Gold solution -- an advanced communication, collaborative learning Collaborative learning is an umbrella term for a variety of approaches in education that involve joint intellectual effort by students or students and teachers. Collaborative learning refers to methodologies and environments in which learners engage in a common task in which each and calendaring software for building online educational communities. Since the beginning of this fiscal year, Centrinity has successfully upgraded approximately 1 million users to FirstClass Gold, representing more than 20 percent of its entire installed base. While Centrinity continued to exhibit robust revenue growth in the third quarter, losses rose due to development and marketing costs associated with the introduction of FirstClass UM and the enhanced version of FirstClass Gold. At the same time, Centrinity deployed the capital invested by shareholders through the $25 million special warrant financing in February 2000. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , excluding direct cost of sales and amortization, were $6.9 million, compared with $3.3 million on a pro forma basis in the same quarter last year. In the second quarter of this year, these expenses were $3.7 million. Recruitment investments accounted for most of the increases in research and development expenditures and recruitment and public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most investments accounted for those in sales and marketing, while the necessary expansion of office facilities led to the increase in administrative expenses. Also, $0.8 million of third-quarter operating expenses of FC Sweden AB, Centrinity's Scandinavian acquisition made late in the second quarter, contributed to the increase. Loss before amortization of goodwill or other intangibles was $3.7 million, as compared with $1.6 million in the second quarter. The net loss for the quarter was $5.5 million, or 28 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , vs. $3.2 million, or 16 cents per share, in the previous quarter. In the third quarter of fiscal 1999, the net loss was $1.0 million, or 10 cents per share. The net loss in the third quarter of fiscal 1999 would have been approximately the same had the SoftArc acquisition been included in the results on a pro forma basis. For the first nine months of fiscal 2000, net losses were $10.8 million, or 63 cents per share, compared with $2.0 million, or 19 cents per share, in the first nine months of fiscal 1999 (excluding any pro forma adjustment for the SoftArc acquisition). Third-Quarter Highlights -- FirstClass UM was sold to British Columbia's Richmond School Richmond School is a large secondary, coeducational Comprehensive school located in Richmond in North Yorkshire, England. It serves a wide Catchment area across most of the north-west corner of North Yorkshire, including Swaledale. District to support 2,400 district employees and 24,000 students at 55 locations. -- Centrinity entered a strategic partnership with MorningStar Systems Inc., a leading collaborative knowledge management consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a and an Open Text Corporation Affinity Partner, and GemStone gemstone Any of various minerals prized for beauty, durability, and rarity. A few noncrystalline materials of organic origin (e.g., pearl, red coral, and amber) also are classified as gemstones. Systems Inc., a provider of advanced, integrated platforms for B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the applications, to build a dynamic new B2B Internet service. -- FirstClass Intranet Server software was ranked in the leadership quadrant quadrant, in analytic geometry quadrant. 1 In analytic geometry, one of the four regions of the plane determined by two lines, the x-axis and the y-axis. of the IDC Grid for Integrated Collaborative Environment Software, alongside prominent names such as Lotus Domino/Notes and Microsoft Exchange Messaging and groupware software for Windows from Microsoft. Exchange Server is an Internet-compliant e-mail system that runs under Windows NT/2000 and Windows Server 2003. It can be accessed by Web browsers, the Exchange client, versions of Outlook and the earlier Windows Inbox. . -- Centrinity acquired the rights to database integration software that enables FirstClass users to quickly create online information systems with customized access to existing databases. -- Centrinity shares commenced trading on the Toronto Stock Exchange. -- FirstClass UM was sold to Nevada's Clark County Clark County is the name of twelve counties in the United States of America:
District, the seventh-largest and fastest-growing school district in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , which expects to ultimately expand its system to accommodate 300,000 users. -- Centrinity launched an enhanced version of FirstClass Gold that includes Windows 2000 compatibility; an IP Notifier Notifier or Notifier Fire Control Systems is the largest manufacturer of engineered fire alarm systems with over 400 distributors worldwide, and regional support operations on every continent. that alerts users to incoming mail; support for Palm Computing computing - computer connected organizers; and a fully licensed version of FirstClass Rapid Application Developer, a database development and integration tool. -- A group of rural hospitals and healthcare facilities in Texas chose FirstClass Intranet Server Gold as their primary collaborative communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems for Telemedicine ("long distance" medicine) Using a videoconferencing link to a large medical center in order that rural health care facilities can perform diagnosis and treatment. A specialist can monitor the patient remotely taking cues from the general practitioner or nurse who is actually examining -- a project to improve access to healthcare in approximately 200 remote locations across Texas. -- FirstClass UM was sold to Lester B. Pearson School Board The Lester B. Pearson School Board (LBPSB) is an English-language school board in the province of Quebec, the largest[4] of the nine English school boards in the province. , the largest English language English language, member of the West Germanic group of the Germanic subfamily of the Indo-European family of languages (see Germanic languages). Spoken by about 470 million people throughout the world, English is the official language of about 45 nations. board in Quebec with 27,000 students in 43 elementary and 16 high schools. Highlights Subsequent to Quarter End -- Centrinity signed a three-year contract valued at more than $1 million to upgrade the FirstClass Gold solution it provides to SkoleKom, the Danish National Conferencing See teleconferencing. Service, whose current base of 260,000 users may expand to as many as 3 million by 2003. -- Albert Lin, principal and senior portfolio manager for The Abernathy Group The Abernathy Group is an asset management firm run by Steven Abernathy. Nelson’s Financial Information [1] has ranked Abernathy as one of the nation’s top money managers every year since 1994. , a leader in technology equities, joined Centrinity's board of directors. -- Centrinity strengthened its senior management team with the appointment of former investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. Richard LePage as executive vice president and chief financial officer, and technology industry veteran Barry Singer as vice president, Corporate Development. The fourth quarter of fiscal 2000 is off to a strong start with the signing of the highly promising SkoleKom contract, part of more than $4.6 million in recent new business. Outlook McGovern said: "With the full development of our Unified Communications product now complete and shipments underway, we are very strongly positioned to be a leader in the UC market. Our FirstClass UM goes well beyond unified messaging, with its carrier-grade scalability and reliability. "Our planned product and marketing development activities, particularly the official launch of FirstClass UM through telcos (incumbent, second generation and wireless), cablecos, Internet and application service providers and system integrators See systems integrator. in September will continue to positively impact Centrinity's bottom line. "The strength of our product and marketing plans, and the strong upward trend in worldwide demand for Centrinity's solutions, should all contribute to significant revenue growth and profitability as we fully exploit the UC opportunity. Furthermore, our new recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue model, which is based on ongoing licensing fees rather than one-time sales, will improve the stability and predictability of future earnings. "Centrinity is clearly a high-growth company in a high-growth market. With our TSE listing, the recognized leadership of our products, our growing customer base and our success in attracting talented new members to our management team, we are better positioned than ever to both shape and dominate our marketplace." Conference Call Reminder Centrinity will hold a conference call today, Tuesday, Aug. 22, 2000, to discuss third-quarter financial results for the three months ended June 30, 2000, and to provide updates on operating progress. The call begins at 11 a.m. ET, and can be accessed by calling 888/674-1998. A telephone postview service will also be in place from approximately one hour after the conference ends until midnight ET, Tuesday, Aug. 29. It can be accessed by calling 800/558-5253 and entering reservation No. 1611 6633. About Centrinity Inc. Serving more than 6 million users in more than 8,000 organizations in 55 countries, Centrinity is a high-growth software company with technological leadership in the burgeoning global market for unified messaging solutions and related network-based collaboration tools A collaboration tool is something that helps people collaborate. The term is often used to mean collaborative software, but collaboration tools were being used before computers existed, a piece of paper can for example can be used as collaboration tool. . The company's products include FirstClass Intranet Server Gold, FirstClass Collaborative Classroom Gold and Zebu zebu (zē`by  ), domestic animal of the cattle family, Bos indicus, found in parts of E Asia, India, and Africa. , which are widely
used in commercial and education markets.
Centrinity is listed under the symbol "CTI" on the Toronto Stock Exchange. Centrinity's corporate Web site is located at http://www.centrinity.com This news release may include statements about expected future events and/or financial results that are forward looking in nature and subject to risks and uncertainties. The company cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what the company currently foresees. Note to editors: FirstClass is a registered trademark of SoftArc, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Centrinity Inc. Centrinity, the Centrinity logo and Zebu are trademarks of Centrinity Inc. All other trademarks are the property of their respective owners.
June 30, 2000 Centrinity Inc. (formerly MC2 Learning Systems Inc.)
Financial Statements
Consolidated Balance Sheets
Unaudited -- prepared by management
As at June 30, Sept. 30,
2000 1999
Assets
Current assets
Cash and short-term investments $22,657,759 $3,390,435
Accounts receivable 3,178,532 1,581,718
Inventory 295,679 103,747
Income taxes recoverable 324,763 316,738
Investment tax credits receivable 37,190 559,457
Prepaid expenses and deposits 734,978 202,693
27,228,901 6,154,788
Capital assets, net of accumulated
amortization 1,838,637 1,054,086
Intangible assets, net of accumulated
amortization 9,433,909 10,631,421
$38,501,447 $17,840,295
Liabilities
Current liabilities
Accounts payable and accrued
labilities 3,668,446 1,249,052
Deferred revenue 899,269 226,067
Notes payable - 1,500,000
4,567,715 2,975,119
Deferred income taxes 38,623 38,623
4,606,338 3,013,742
Shareholders' Equity
Share capital 52,763,510 22,848,684
Deficit (18,868,401) (8,022,131)
33,895,109 14,826,553
$38,501,447 $17,840,295
Consolidated Statements of Operations and Deficit
Unaudited -- prepared by management
For the three months ended
June 30
2000 1999
Revenue $3,695,164 $294,410
Direct cost of inventory sold 314,974 $5,469
Gross profit 3,380,190 288,941
Expenses
Sales and marketing 3,583,566 754,659
Research and development 1,102,551 217,546
General and administrative 2,262,762 275,709
Amortization of capital assets 180,061 53,448
7,128,940 1,301,362
Loss before undernoted items (3,748,750) (1,012,421)
Amortization of intangibles other
than goodwill 1,317,749 -
Loss before amortization of goodwill (5,066,499) (1,012,421)
Amortization of goodwill 400,415 -
Net loss for the period (5,466,914) (1,012,421)
Deficit, beginning of period (13,401,487) (4,202,204)
Net loss for the period (5,466,914) (1,012,421)
Deficit, end of period (18,868,401) (5,214,625)
Net loss per share before amortization
of goodwill (0.26) (0.10)
Net loss per share (0.28) (0.10)
Weighted average number of
common shares outstanding 19,202,975 10,124,210
Consolidated Statements of Operations and Deficit
Unaudited -- prepared by management
For the nine months ended
June 30
2000 1999
Revenue $8,718,124 $1,198,082
Direct cost of inventory sold 624,736 5,469
Gross profit 8,093,388 1,192,613
Expenses
Sales and marketing 7,212,286 1,853,406
Research and development 2,257,916 553,579
General and administrative 4,220,483 649,531
Amortization of capital assets 442,906 105,156
14,133,591 3,161,672
Loss before undernoted items (6,040,203) (1,969,059)
Amortization of intangibles other
than goodwill 3,854,659 -
Loss before amortization of goodwill (9,894,862) (1,969,059)
Amortization of goodwill 951,408 -
Net loss for the period (10,846,270) (1,969,059)
Deficit, beginning of period (8,022,131) (3,245,566)
Net loss for the period (10,846,270) (1,969,059)
Deficit, end of period (18,868,401) (5,214,625)
Net loss per share before amortization
of goodwill (0.57) (0.19)
Net loss per share (0.63) (0.19)
Weighted average number of common
shares outstanding 17,308,591 10,363,468
Consolidated Statements of Cash Flows
Unaudited -- prepared by management
For the nine months ended June 30 2000 1999
Cash from (used in) operations
Net loss for the period $(10,846,270) $(1,969,059)
Items not involving cash:
Amortization of capital assets
and intangibles 5,248,973 105,156
(5,597,297) (1,863,903)
Net change in non-cash working capital balances
Accounts receivable (1,309,007) (705,250)
Inventory (139,086) -
Income taxes recoverable 57,216 -
Investment tax credits receivable 522,267 -
Prepaid expenses and deposits (333,278) 26,534
Accounts payable and
accrued liabilities 1,305,399 686,483
Deferred revenue 596,390 85,689
(4,897,396) (1,770,447)
Cash from (used in) investing activities
Acquisition of capital assets, net (1,021,921) (122,932)
Acquisition of technology (580,000) -
Acquisition of subsidiaries, net of cash
acquired of $854,870 (2,648,185) (15,259,580)
Less: shares issued as consideration 3,560,000 12,000,000
911,815 (3,259,580)
(690,106) (3,382,512)
Cash from financing activities
Issuance of notes payable - 1,500,000
Repayment of notes payable (1,500,000) -
Issuance of shares and warrants,
net of share issue costs 26,354,826 5,989,842
24,854,826 7,489,842
Increase in cash during period 19,267,324 2,336,883
Cash and short-term investments,
beginning of period 3,390,435 1,590,916
Cash and short-term investments,
end of period $22,657,759 $3,927,799
Interest received $554,982 36,989
Interest paid - -
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