A Novo Broadband Records 92% Increase in Second Quarter Revenue as It Begins Its Digital Roll Out in North America

Business Wire, May 10, 2001

Business Editors

HOLLYWOOD, Fla.--(BUSINESS WIRE)--May 10, 2001

A Novo Broadband, Inc. (OTCBB: ANVB)

Second Quarter Highlights

-- Revenues increased 92% over prior year's quarter

-- Service & repair revenues rise 139% compared to prior year's
quarter

-- Five new service agreements signed

A Novo Broadband, Inc. (OTCBB: ANVB) ("A Novo"), which provides "Total Solution" service and repair of broadband equipment to OEMs and systems operators throughout North America, today announced financial results for the second quarter ended March 31, 2001 (see attached tables).

Louis Brunel, President and CEO of A Novo, stated, "Higher revenues from service, repair and logistics activities demonstrate our continued success in expanding A Novo's existing business model into providing OEMs and system operators with digital service and repair for broadband, high-tech equipment, including cable and satellite digital set top boxes, cable modems and DSL modems. This model is based on implementing high volume processing techniques and proprietary management information tools that mirror those of Paris-based A Novo Group, Europe's largest provider of broadband equipment service and repair. The Company joined the A Novo Group in August 2000.

"We are currently implementing the equipment, systems and technology platform to perform digital service and repair at our Montreal location. We expect this facility will begin generating revenues from these activities later this fiscal year. We are in the process of duplicating these processes at our other service centers in Hollywood, Florida, Columbus, Ohio and Los Angeles, California and should have them operating by the end of this fiscal year. As we undertake this transition, we will serve our blue chip customer base of OEMs and system operators throughout North America, including Scientific Atlanta, Pace MicroTechnology, Adelphia, Comcast, Time Warner, and Videotron."

Revenues for the second quarter of fiscal 2001 increased 92% to $3,996,083. Service and repair revenues rose 139% during the second quarter to $500,000, increasing 8.2% from the first quarter of fiscal 2001. Approximately $100,000 in logistics revenue was recorded in the second quarter of fiscal 2001 versus none last year.

The loss from continuing operations for the second quarter of fiscal 2001 was $179,172, or $.04 per share, versus income from continuing operations of $41,525, or $.02 per share, last year. The loss was due primarily to costs associated with implementing the Company's expansion plans to address the growing service and repair market for broadband equipment. This includes adding new service centers, expanding the Florida facility and increasing administrative and management personnel. Margins were impacted by disproportionately higher brokerage and distribution sales, which the Company expects will decrease as a percentage of overall revenues once its new plan is fully implemented. Net income for the second quarter was $1,058, or $.00 per share, versus net income of $219,921, or $.11 per share, for the same period last year.

David E. Chisum, Chief Financial Officer, commented, "Our plans to implement our digital repair capabilities are supported by a strong financial position, highlighted by cash of $5.9 million, working capital of more than $8 million, minimal long-term debt, and the fact that our operating activities are currently providing a positive cash flow."

Mr. Brunel concluded, "We look ahead to our future with great optimism. The trend for OEMs and system operators to outsource the service and repair function is accelerating. A Novo is well positioned to capture a significant share of this market throughout North America. In this regard, during fiscal 2001 we established agreements with:

-- Pace MicroTechnology, for which A Novo was approved as an

in-warranty and out-of-warranty service center for Canada,

United States, and Mexico. Pace recently announced that it

would deliver more than one million digital decoder units to

Time Warner and Comcast in the U.S. We expect to begin

generating revenue from this agreement during the fourth

quarter of fiscal 2001;

-- Adelphia, to provide asset management services. Adelphia

serves approximately 5.5 million cable subscribers in the U.S.

Revenue was generated from this agreement during the second

quarter;

-- Ameritech New Media, to provide out-of-warranty repair for

five years. This Midwest cable provider serves approximately

300,000 homes;

-- Videotron, to provide out-of-warranty digital decoder repair

for the third largest cable operator in Canada; and

-- Alpha Technologies, to provide in warranty service in the U.S.

for power supplies. Alpha is the leading supplier of power

supplies, generators, and back-up systems to the broadband

industry in the U.S."

A Novo Broadband, Inc. (www.a-novobroadband.com) is part of the Paris-based A Novo Group (www.a-novo.com) which services broadband, electronic, and telecommunications equipment on an industrial scale in Europe, and North and South America. The Company has its corporate office in Hollywood, Florida, and four service centers located in California, Ohio, Florida, and Canada. The Company has contracts with and serves a blue chip customer base that includes Pace Micro Technology, Ameritech New Media, Adelphia, ATT Broadband, Comcast, Time Warner and Videotron.