A Novo Broadband, Inc. Announces Second Quarter Results.Business Editors NEW CASTLE, Del.--(BUSINESS WIRE)--May 21, 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 second fiscal quarter ended March 31, 2002. Sales for the quarter increased 25% to $5.0 million from $4.0 million for the comparable period in fiscal 2001. Revenue for the quarter from core repair and logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. services increased 788% to $4.2 million compared to $473,000 for the same period last year. Revenue from non-core brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. and distribution services and sales of refurbished equipment decreased to $710,000 from $1.4 million. During the quarter, the Company elected to end brokerage and distribution activities, in order to further concentrate on meeting demand in its growing repair activities. The Company anticipates no further revenue from brokerage and distribution activities. Net loss for the first quarter was $(2,139,534), or $(0.42) per share, compared to an approximate break-even 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. , 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 six 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 increased service under the Company's authorization The right or permission to use a system resource; the process of granting access. See access control. during the first quarter 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. . Kelly added that the Company's performance during the first two quarters 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 a combination of increases in production, the introduction of a number of cost-cutting measures, the receipt of advances totaling $3.5 million from A Novo SA, the Company's French parent, and an anticipated expanded bank credit facility was expected to relieve re·lieve v. 1. To cause a lessening or alleviation of something, such as pain, tension, or a symptom. 2. To free an individual from pain, anxiety, or distress. much of the pressure on the Company's cash flow. Although the Company is currently in default under an existing bank credit facility, it expects to enter into a new and expanded bank credit facility in the next several days and believes there will be no adverse effects of its default. Additionally, he said, demand at certain of the Company's facilities 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, including the recent termination of service operations at its Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. service center and the sale of most of the assets related to that facility. 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 Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). 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 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 Florida, state, United StatesFlorida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. character. Such statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could 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.
A NOVO BROADBAND, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2002 September 30, 2001
(Unaudited) (audited)
------------ ------------
CURRENT ASSETS
Cash $ 1,816,033 $ 320,696
Accounts receivable, net 4,529,320 4,267,857
Inventories, net 1,522,535 1,871,350
Notes receivable-related parties 104,809 200,000
Prepaid and other assets 270,104 163,306
Deferred income taxes 541,000 541,000
------------ ------------
Total current assets 8,783,801 7,364,209
------------ ------------
PROPERTY AND EQUIPMENT, at cost
Furniture and fixtures 1,173,753 1,217,341
Equipment 3,662,790 2,885,684
Leasehold improvements 1,018,395 523,371
Software 136,528 57,000
------------ ------------
5,991,466 4,683,396
Less accumulated depreciation ( 1,741,421) ( 1,216,323)
------------ ------------
Net property and equipment 4,250,045 3,467,073
------------ ------------
OTHER ASSETS
Goodwill, net 8,473,684 8,528,807
Deferred income taxes 1,962,279 1,552,000
Note receivable-related party 148,898 -
Other assets 139,519 139,519
------------ ------------
Total other assets 10,724,380 10,220,326
------------ ------------
TOTAL ASSETS $ 23,758,226 $ 21,051,608
============ ============
A NOVO BROADBAND, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2002 September 30, 2001
(Unaudited) (audited)
------------ ------------
CURRENT LIABILITIES
Current portion of long-term
obligations $ 200,611 $ 190,008
Notes payable - bank 1,500,000 500,000
Note payable - related party 5,123,730 4,971,940
Accounts payable 4,550,747 3,039,259
Advances from related party 3,055,430 -
Accrued expenses
Payroll and related taxes 659,020 990,935
Other 214,723 250,429
------------ ------------
Total current liabilities 15,304,261 9,942,571
------------ ------------
LONG-TERM LIABILITIES 41,667 83,334
------------ ------------
Total liabilities 15,345,928 10,025,905
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 5,046 4,915
Additional paid-in-capital 14,000,567 13,861,873
Accumulated other comprehensive
loss ( 59,621) ( 47,304)
Retained deficit ( 5,533,694) ( 2,793,781)
------------ ------------
Total stockholders' equity 8,412,298 11,025,703
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 23,758,226 $ 21,051,608
============ ============
A NOVO BROADBAND, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
Three Months Ended Six Months Ended
March 31, March 31,
2002 2001 2002 2001
------------------------ -------------------------
Revenues $ 5,033,253 $ 3,996,083 $10,368,114 $ 8,722,483
Cost of sales 4,731,261 2,905,338 8,770,404 6,297,147
------------------------ -------------------------
Gross profit 301,992 1,090,745 1,597,710 2,425,336
Selling, general and
administrative
expenses 2,349,003 1,432,005 4,470,524 2,742,668
------------------------ -------------------------
Loss from
operations ( 2,047,011)( 341,260) ( 2,872,814) ( 317,332)
------------------------ -------------------------
Other (expense) income
Interest
expense ( 148,882)( 14,042)( 282,386) ( 21,362)
Interest
income 4,845 85,721 29,194 196,314
------------------------ -------------------------
Total other
(expense)
income ( 144,037) 71,679 ( 253,192) 174,952
------------------------ -------------------------
Loss before
income taxes ( 2,191,048)( 269,581) ( 3,126,006) ( 142,380)
Benefit from
taxes 51,514 90,409 386,093 47,158
------------------------ -------------------------
Loss from
continuing
operations ( 2,139,534)( 179,172) ( 2,739,913) ( 95,222)
Discontinued
operations:
Gain on disposal
of division,
net of tax
provision of $0,
$93,000, $0 and
$93,000 - 180,230 - 180,230
------------------------ -------------------------
Net (loss)
income ( 2,139,534) 1,058 ( 2,739,913) 85,008
Other
comprehensive
loss ( 3,105) - ( 12,317) -
------------------------ -------------------------
Total
comprehensive
(loss) income $( 2,142,639) $ 1,058 $( 2,752,230) $ 85,008
======================== =========================
Basic and diluted
earnings per share
Loss from
continuing
operations $ (0.42) $ (0.04) $ (0.55) $ (0.02)
------------------------ -------------------------
Gain on
discontinued
operations $ 0.00 $ 0.04 $ 0.00 $ 0.04
------------------------ -------------------------
Net (loss)
income per
share $ (0.42) $ 0.00 $ (0.55) $ 0.02
======================== =========================
Weighted average
shares
outstanding 5,041,219 4,843,624 4,977,803 4,801,635
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