Centrinity Reports Record Revenue, Product Milestones in Third Quarter.Business Editors MARKHAM Markham City (pop., 1991: 154,000), southeastern Ontario. It is situated on the Rouge River, northeast of Toronto. Settled in 1794, the town was named for William Markham, archbishop of York. It annexed the nearby township of Markham in 1971. , Ontario--(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 col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. 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 third quarter of fiscal 2000. "The third quarter of fiscal 2000 was one of tremendous progress for Centrinity," said 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. , 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," Mr. McGovern continued. "These included being recognized by International Data Corporation 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 Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. , 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 - email, voice, or fax - anytime, anywhere, 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 Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and the U.S. for FirstClass UM, which we began shipping at the end of June June: see month. ." Revenue for the three months ended June 30, 2000 rose 97% 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% from $2.5 million last quarter. Strong growth was mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. one million users to FirstClass Gold, representing more than 20% of their 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 February: see month. 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 to $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 recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. investments accounted for most of the increases in research and development expenditures, 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 Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. AB, Centrinity's Scandinavian acquisition made late in the second quarter, contributed to the increase. Loss before amortization of goodwill or other intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. was $3.7 million as compared to $1.6 million in the second quarter. The net loss for the quarter was $5.5 million, or $0.28 per share, versus $3.2 million, or $0.16 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. , in the previous quarter. In the third quarter of fiscal 1999, the net loss was $1.0 million, or $0.10 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 $0.63 per share, compared to $2.0 million, or $0.19 per share, in the first of 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
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 and an Open Text Corporation Affinity Partner,
and GemStone Systems, Inc., a provider of advanced, integrated
platforms for B2B Internet applications, to build a dynamic new
B2B Internet service.
- FirstClass Intranet Server software was ranked in the leadership
quadrant of the IDC Grid for Integrated Collaborative Environment
Software, alongside prominent names such as Lotus Domino/Notes
and Microsoft Exchange.
- 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 School District,
the seventh largest and fastest growing school district in the
US, 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 that alerts
users to incoming mail; support for Palm Computing connected
organizers; and a fully licensed version of FirstClass Rapid
Application Developer, a database development and integration
tool.
- A group of rural hospitals and health care facilities in Texas
chose FirstClass Intranet Server Gold as their primary
collaborative communications software for Telemedicine - a
project to improve access to health care in approximately 200
remote locations across Texas.
- FirstClass UM was sold to Lester B. Pearson School Board, the
largest English language board in Quebec with 27,000 students in
43 elementary and 16 high schools.
Highlights Subsequent to Quarter End
- Centrinity signed a 3-year contract valued at more than $1
million to upgrade the FirstClass Gold solution we provide to
SkoleKom, the Danish National Conferencing Service, whose current
base of 260,000 users may expand to as many as three million by
2003.
- Albert Lin, Principal and Senior Portfolio Manager for The
Abernathy Group, a leader in technology equities, joined
Centrinity's Board of Directors.
- Centrinity strengthened its senior management team with the
appointment of former investment banker 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 Mr. 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 How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it and reliability. "Our planned product and marketing development activities, particularly the official launch of FirstClass UM through telcos (incumbent Refers to an entity that is currently in power. For example, in politics, the "incumbent senator" is the person who holds that office today. An "incumbent company" is an organization that has been providing goods and services for some time. See ILEC. , second generation and wireless), cablecos, internet and application service providers and system integrators See systems integrator. in September September: see month. 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 the exploit 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 one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. 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 Tuesday: see week. , August 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 11:00 a.m. (eastern) and can be accessed by calling 1-888-674-1998. A telephone postview service will also be in place from approximately one hour after the conference ends until midnight (eastern) Tuesday, August 29. It can be accessed by calling 1-800-558-5253 and entering reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 1611 6633. About Centrinity Inc. Serving over 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 Inc. is listed under the
symbol "CTI" on The Toronto Stock Exchange. Centrinity's
corporate website is located at http://www.centrinity.com
This news release may include statements about expected future events and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. financial results that are 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. 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. 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, September 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
liablities 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)
---------------------------------------------------------------
Defict, 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)
---------------------------------------------------------------
Defict, 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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