NBS Technologies Inc.: MIST Experiences Strong Growth In Revenues From Wireless Solutions.Business Editors TORONTO--(BUSINESS WIRE)--Aug. 24, 2000 NBS (National Bureau of Standards) See NIST. NBS - National Bureau of Standards: part of the US Department of Commerce, now NIST. Technologies Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :NBS.), a leading provider of wireless end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. financial transaction solutions, today reported a 12% increase in revenue for the nine months ended June June: see month. 30, 2000. "MIST mist: see fog. continues to build revenue momentum and customer response to our wireless product line is excellent. Demand is accelerating in our transaction solution business and we anticipate continued revenue growth," said Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by E. Lee, President and Chief Executive Officer, MIST. Transaction solution revenue for the third quarter was $4.4 million, up 156% from the third quarter of 1999. Mr. Lee commented, "Our MIST Freedom II units are now in use across 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. in a variety of different applications including restaurants, taxi cabs, and trade shows. Our engineering team is now developing innovative value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. gateways and other software applications to help our customers realize the many benefits of wireless technology." "We look forward to the completion of our corporate reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. over the next two quarters, and ensuring that all our energies are directed at providing our customers with innovative end-to-end wireless transaction solutions." Highlights for the Quarter Recently the Company achieved the following milestones:
- In August, the MIST Freedom II terminal was selected as the
exclusive wireless transaction terminal for use at the Electronic
Transaction Association ("ETA") convention in Chicago. The ETA is
the major North American point-of-sale industry trade association.
- The Company has moved to its new Corporate Headquarters at Evans
Avenue in Toronto. Research and development and Canadian sales for
MIST are located at the new location.
- MIST has signed a letter of intent with Unified Merchant Processing
Inc., a Canadian independent selling organization, to sell Unified
Merchant Processing up to 3,000 Freedom II units over the eighteen
months.
- MIST continues to add certifications on US and Canadian processing
networks. Recent US certifications include major processors
Paymentech, Vital, and GPS.
We believe that the market for wireless transaction solutions offers significant upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside opportunities for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , profitable growth. By offering flexible, secure and highly reliable end-to-end wireless solutions, the Company will enable a wide range of merchants and retail service providers to accept debit A monetary amount that is subtracted from an account balance. A debit from one account is a credit to another. See credit. and credit transactions in a mobile environment and have access to a wide range of value added services through the MIST Gateway. Financial Highlights Revenue for the third quarter increased 12% to $13.4 million, up from $12.0 million in the same period in the prior year. Revenue for the nine months ended June 30, 2000 was $44.5 million, up 12.3% from the nine months ended June 30, 1999. For the nine months ended June 30, 2000, income from operations increased $2.5 million to $2.6 million. The improvement is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. related to the increase in revenue in the transaction solution business and imprinting imprinting, acquisition of behavior in many animal species, in which, at a critical period early in life, the animals form strong and lasting attachments. Imprinting is important for normal social development. products. The loss before discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. remained constant at $1.3 million (($0.04) per share), reflecting increases in reorganization and other costs, interest expense and minority interest. Net loss for the quarter increased to $2.7 million (($0.09) per share), a result of a loss from discontinued operations of $562,000 and the amortization of goodwill. For the quarter ended June 30, 2000, the loss from operations decreased to $90,000 from $665,000 in the prior year's third quarter. Before discontinued operations, the loss increased to $2.1 million (($0.07) per share) from $1.1 million (($0.04) per share) due to the increase in reorganization and other costs, interest expense and minority interest. The net loss for the quarter increased to $3.0 million (($0.10 per share) from $756,000 (($0.03) per share) due to the loss from discontinued operations and amortization of goodwill. Bank indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. increased $13.5 million from September September: see month. 30, 1999, a result of a significant increase in working capital levels necessary to support future growth, investments in new product development, payments for the acquisition of C&D Holdings and the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of a portion of the long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Corporate Reorganization The Company is proceeding with the reorganization announced April 28, 2000. As part of this reorganization, the Company entered into an agreement with Trilon
(2) See CA. CAI - Computer-Aided Instruction Capital Corporation and related funds providing for the acquisition of the card issuance business. The business is comprised of the imprinter In the fictional Dune saga by Frank Herbert, an imprinter is a member of the Bene Gesserit specifically trained to a high level of sexual skill, who has the task of sexual imprinting. , card solution and card issuance operations. The sale of the imprinter division is dependent upon the consent of other parties to the joint venture through which the business is conducted. The consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the third quarter and for the nine months ended June 30, 2000 include the card solution and card issuance operations as discontinued operations. The consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. at June 30, 2000 includes a reduction in the capital stock and deficit of $48.9 million, reflecting one of the initial steps in the reorganization. About MIST MIST is a leading international provider of end-to-end financial transaction, information and processing solutions to banks, transaction processors and merchants. MIST's products are designed to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , reduce operational complexity and improve customer profitability Customer profitability (CP) is the difference between the revenues earned from and the costs associated with the customer relationship in a specified period. According to Philip Kotler,"a profitable customer is a person,household or a company that overtime,yields a revenue . The Company's products include handheld handheld: see personal digital assistant. , wireless point of sale ("POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale ") terminals, fixed wired POS terminals, and various application services See ASP and Web services. provided through the newly developed MIST Gateway. The Company's products are currently used in the financial, retail, hospitality, healthcare and transportation industries, among others. MIST's established customers, developed through relationships over a period of 16 years, include banks, payment processors, retail merchants, mass merchandisers, and government benefits disbursers located in the 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. . MIST distributes its products through direct sales and various third party distribution arrangements. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations
Three Months Ended Nine Months Ended
June 30, June 30,
2000 1999 2000 1999
----------------------------------------------------------------------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
(in thousands of
Canadian dollars)
Sales $13,402 $11,964 $44,465 $39,601
Cost of sales 9,090 8,291 29,286 26,138
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Gross profit 4,312 3,673 15,179 13,463
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Expenses
Selling, general and
administrative 3,187 3,011 9,344 9,146
Research and development 502 661 1,331 2,204
Depreciation and
amortization 713 666 1,948 2,022
----------------------------------------------------------------------
4,402 4,338 12,623 13,372
----------------------------------------------------------------------
Income (loss) from operations
before undernoted items (90) (665) 2,556 91
Interest expense 869 452 2,080 1,420
Reorganization costs and other 880 (68) 899 (44)
----------------------------------------------------------------------
Loss before income taxes and
minority interest (1,839) (1,049) (423) (1,285)
Income taxes (38) 19 59 65
Minority interest 319 - 836 -
----------------------------------------------------------------------
Loss before discontinued
operations (2,120) (1,068) (1,318) (1,350)
Loss (income) from
discontinued operations 448 (312) 562 (749)
----------------------------------------------------------------------
Net loss before amortization
of goodwill $(2,568) $(756) $(1,880) $(601)
Amortization of goodwill 469 - 806 -
Net loss for the period $(3,037) $(756) $(2,686) $(601)
----------------------------------------------------------------------
----------------------------------------------------------------------
Per Share Data
Loss before discontinued
Operations $(0.07) $(0.04) $(0.04) $(0.04)
Net loss before amortization
of goodwill $(0.09) $(0.03) $(0.06) $(0.02)
Net loss $(0.10) $(0.03) $(0.09) $(0.02)
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Weighted average common shares
outstanding (thousands) 30,184 30,046 30,154 30,018
----------------------------------------------------------------------
----------------------------------------------------------------------
Consolidated Balance Sheets
(in thousands of Canadian dollars) June 30, September 30,
2000 1999
----------------------------------------------------------------------
(Unaudited) (Unaudited)
ASSETS
Current
Accounts receivable $7,597 $7,778
Inventories 7,289 4,196
Prepaid expenses and deposits 374 202
----------------------------------------------------------------------
15,260 12,176
Capital assets 13,050 13,502
Other assets 6,991 3,114
Net assets of discontinued operations 8,715 9,058
----------------------------------------------------------------------
$44,016 $37,850
----------------------------------------------------------------------
----------------------------------------------------------------------
LIABILITIES
Current
Bank indebtedness $24,088 $10,557
Accounts payable and accrued
liabilities 10,765 14,967
Deferred revenue 115 33
Current portion of long-term debt 562 5,515
----------------------------------------------------------------------
35,530 31,072
Long-term debt 7,638 8,037
Minority interest 4,371 -
----------------------------------------------------------------------
47,539 39,109
----------------------------------------------------------------------
SHAREHOLDERS' DEFICIENCY
Capital stock 42,384 90,812
Deficit (45,907) (92,071)
----------------------------------------------------------------------
(3,523) (1,259)
----------------------------------------------------------------------
$44,016 $37,850
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Capital stock
Common shares issued and outstanding 30,218,190 30,045,524
Options to purchase common shares
(share prices range between
$0.73 and $5.13) 1,549,360 1,460,360
----------------------------------------------------------------------
31,767,550 31,505,884
----------------------------------------------------------------------
----------------------------------------------------------------------
Consolidated Statements of Cash Flow
Nine Months Ended
June 30,
(in thousands of Canadian dollars) 2000 1999
--------------------------------------------------------------------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES
Loss before discontinued operations $(1,318) $(1,350)
Income (loss) from discontinued operations (562) 749
Depreciation and amortization of capital and
other assets 1,948 2,022
Amortization of deferred financing costs 221 -
Minority interest 836 -
Change in non-cash working capital (6,504) 409
--------------------------------------------------------------------
(5,379) 1,830
--------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets, net of disposals (1,445) (1,492)
Additions to other assets (2,255) (2,954)
(Increase)/decrease in net assets from
discontinued operations (357) (305)
--------------------------------------------------------------------
(4,057) (4,751)
--------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in bank indebtedness 13,531 2,810
Increase in long-term debt - 567
Repayment of long-term debt (5,352) (556)
Issuance of common shares 422 100
Minority interest 835 -
--------------------------------------------------------------------
9,436 2,921
--------------------------------------------------------------------
Increase (decrease) in cash during period - -
Cash and cash equivalents at beginning of period - -
--------------------------------------------------------------------
Cash and cash equivalents at end of period $ - $ -
--------------------------------------------------------------------
--------------------------------------------------------------------
Segmented Information
Three Months Ended Nine Months Ended
(in thousands of June 30, June 30,
Canadian dollars) 2000 1999 2000 1999
--------------------------------------------------------------------
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
Sales
Transaction Solutions $4,409 $1,719 $11,570 $8,970
Card Services 5,402 8,015 22,303 24,580
Imprinting Systems 3,642 2,398 10,773 6,570
Intersegment Items (51) (168) (181) (519)
--------------------------------------------------------------------
$13,402 $11,964 $44,465 $39,601
--------------------------------------------------------------------
--------------------------------------------------------------------
Net Income
Transaction Solutions $(509) $(1,137) $(186) $(1,609)
Card Services (415) 471 910 1,601
Imprinting Systems 891 340 2,455 924
Other (57) (339) (623) (825)
--------------------------------------------------------------------
Income (loss) from operations
before undernoted items (90) (665) 2,556 91
Interest expense (869) (452) (2,080) (1,420)
Reorganization and other
costs (880) 68 (899) 44
Income taxes 38 (19) (59) (65)
Minority interest (319) - (836) -
Income (loss) from
discontinued operations (448) 312 (562) 749
Amortization of goodwill (469) - (806) -
--------------------------------------------------------------------
$(3,037) $(756) $(2,686) $(601)
--------------------------------------------------------------------
--------------------------------------------------------------------
June 30, September 30,
2000 1999
---------------------
Assets Employed
Transaction Solutions $15,396 $9,143
Card Services 13,740 16,477
Imprinting Systems 5,950 3,371
Other 215 (199)
Discontinued Operations (net) 8,715 9,058
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$44,016 $37,850
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