A Novo Broadband, Inc. Announces First Quarter Results.Business Editors/Hi-Tech Writers NEW CASTLE, Del.--(BUSINESS WIRE)--Feb. 19, 2002 A Novo Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). , Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ANVB), today announced results for its first fiscal quarter ended December December: see month. 31, 2001. Sales for the quarter increased 13% to $5.3 million from $4.7 million for the comparable period in fiscal 2001. Revenue for the quarter from core repair and logistics services increased 661% to $3.6 million compared to $473,000 for the same period last year. Revenue from non-core brokerage and distribution services and sales of refurbished equipment decreased to $1.7 million from $4.3 million. After the quarter, the Company terminated these service and sales activities, and it anticipates no material revenue from them after the second quarter. Net loss for the first quarter was $(600,379), or $(0.12) per share, compared to net income of $83,950, or $0.02 per share, in the comparable quarter of 2001. Bill Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. , recently appointed as President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , noted that the Company's improved core revenues for the quarter reflected a full three months of warranty service on Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. digital set-top boxes The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. and the commencement of service under the company's recent authorization The right or permission to use a system resource; the process of granting access. See access control. to perform warranty repairs on Scientific Atlanta's digital set-top boxes in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . He said the Company has been ramping up for production under the Scientific Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. authorization since mid-way through the first quarter. As of January 31, 2002, he said, the Company was processing repairs of Scientific Atlanta set-top boxes at a rate of 1,700 units per month and expects this service to expand over the remainder of the fiscal year, reaching anticipated levels of 12,000 units per month by the end of the second fiscal quarter and nearly 17,000 units per month by the end of the fiscal year. Kelly added that the Company's performance during the quarter had been somewhat constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by a recent shortage of working capital but that increases in production, the introduction of a number of cost-cutting measures and the receipt of advances from A Novo SA, the Company's French parent, were expected to relieve much of the pressure on the Company's cash flow. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Kelly, the Company expects to be self-sustaining from a cash flow perspective by the end of the third quarter. He indicated that the Company's cash resources had been depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d to complete the acquisition of the Broadband Services See broadband and broadband service provider. repair business in August 2001, to purchase specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. equipment for servicing Motorola and Scientific Atlanta digital set-top boxes, and to pay employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs in connection with work-force reductions. Additionally, he said, demand at certain of the Company's facilities and for certain of its non-core services was weaker than had been anticipated, and remedial action A remedial action is a change made to a nonconforming product or service to address the deficiency. Rework and repair are generally the remedial actions taken on products, while services usually require additional services to be performed to ensure satisfaction. has been taken. According to Kelly, the Company continues to focus its resources on the development of its core repair service functions. He noted that the effect of the Company's sharpened sharp·en tr. & intr.v. sharp·ened, sharp·en·ing, sharp·ens To make or become sharp or sharper. sharp focus on repair services is already discernable in its production figures. From September 2001 through January 2002, the Company's repair volume increased by 118%, from 17,000 set top boxes per month to over 37,000 units per month. Most of this increase was attributable to in-warranty repair work stemming from the Company's acquisition of the Broadband Services repair business in August 2001. Kelly said that the Company's actual production was considerably greater than levels achieved by Broadband Services prior to the acquisition and exceeded management's expectations at the time of the acquisition. A Novo Broadband, Inc. is one of a group of companies controlled by Paris-based A Novo SA. Members of the group distribute and service cable and other electronic and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment on an industrial scale in Europe and North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . The Company has its corporate office in New Castle, Delaware New Castle is a city in New Castle County, Delaware, six miles (10 km) south of Wilmington, situated on the Delaware River, at the head of Delaware Bay. In 1900, 3,380 people lived here; in 1910, 3,351. According to 2006 Census Bureau estimates, the population of the city is 4,836. and active service centers located in California, Ohio California, Ohio is a small neighborhood in the city of Cincinnati. It is located on the banks of the Ohio River. Because of this, many of its historical homes have water damage. It is not uncommon to see a home with two or three stories only being inhabited on the uppermost story. , Florida and Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). . This press release includes statements which constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are identifiable by use of such words as "belief", "expect", "anticipate" or other similar words or phrases that indicate their forward-looking character. Such statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors, which would cause or contribute to such differences, are detailed in the Company's Securities and Exchange Commission filings, including its most recent Report on Form 10-KSB. Financial statements follow.
A NOVO BROADBAND, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(dollars in thousands)
December 31, September 30,
2001 (unaudited) 2001 (audited)
---------------- --------------
CURRENT ASSETS
Cash $ 403 $ 321
Accounts receivable, net 4,374 4,268
Inventories, net 2,087 1,871
Notes receivable-related parties 150 200
Prepaid and other assets 290 163
Deferred income taxes 541 541
----- -----
Total current assets 7,845 7,364
----- -----
PROPERTY AND EQUIPMENT, at cost
Furniture and fixtures 1,161 1,217
Equipment 3,881 2,886
Leasehold improvements 956 523
Software 136 57
------ ------
6,134 4,683
Less accumulated depreciation (1,445) (1,216)
------- -------
Net property and equipment 4,689 3,467
------- -------
OTHER ASSETS
Goodwill, net 8,515 8,529
Deferred income taxes 1,887 1,552
Other assets 140 140
----- -----
Total other assets 10,542 10,221
------ ------
TOTAL ASSETS $23,076 $21,052
======= =======
CURRENT LIABILITIES
Current portion of long-term
obligations $ 190 $ 190
Notes payable - bank 1,500 500
Note payable - related party 5,072 4,972
Accounts payable 5,016 3,039
Advances from related party 100 --
Accrued expenses
Payroll and related taxes 610 991
Other 109 251
------ -----
Total current liabilities 12,597 9,943
------ -----
LONG-TERM LIABILITIES 62 83
------ -----
Total liabilities 12,659 10,026
------ ------
STOCKHOLDERS' EQUITY
Common stock 5 5
Additional paid-in-capital 13,862 13,862
Accumulated other comprehensive
loss (56) (47)
Retained deficit (3,394) (2,794)
----- -----
Total stockholders' equity 10,417 11,026
------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $23,076 $21,052
======= =======
A NOVO BROADBAND, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in thousands, except for per share data)
(unaudited)
Quarter Ended Quarter Ended
12/31/01 12/31/00
---------- ----------
Revenues $ 5,335 $ 4,726
Cost of sales 4,039 3,392
----------- -----------
Gross profit 1,296 1,334
Selling, general and
administrative expenses 2,122 1,310
----------- -----------
(Loss) income from operations (826) 24
----------- -----------
Other income (expense)
Interest income 24 110
Interest expense (133) (7)
----------- -----------
Total other income (expense) (109) 103
----------- -----------
(Loss) income before income taxes (935) 127
Benefit from (provision for)
income taxes 335 (43)
----------- -----------
Net loss income (600) 84
Other comprehensive (loss) (9) --
----------- -----------
Total comprehensive (loss)
income $ (609) $ 84
=========== ===========
Basic earnings per share:
Net (loss) income $ (0.12) $ 0.02
=========== ===========
Weighted average shares
outstanding 4,915,766 4,759,645
=========== ===========
Diluted earnings per share:
Net (loss) income $ (0.12) $ .02
=========== ===========
Weighted average shares
outstanding 4,915,766 5,073,220
=========== ===========
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