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Novume Solutions, Inc. Issues Letter to Stockholders
CEO Provides Update on Developments to Date and 2018
Outlook
CHANTILLY, VA / ACCESSWIRE /
May 3, 2018 /
Novume
Solutions, Inc. (NASDAQ: NVMM) (“Novume” or the
"Company"), a holding company of
leading specialty professional services firms, today issued
the following letter to its stockholders:
Dear
Novume Stockholders:
I am very pleased to provide you with an update on our progress
since the formation of Novume. Over the past 24 months, we’ve
been working to build an end-to-end outsourcing platform for
companies competing in the U.S. federal government contracting or
Gov Con market. It’s been an exciting experience and we are
encouraged by the many opportunities we see before us. Although
we’re still in the early innings and few in the investment
audience are tuned into our game, we have some dynamic near-term
growth kickers in place and the potential to significantly expand
our top-line through both organic growth and opportunistic
acquisitions. These are strong positives that should ultimately
increase our visibility and support a revaluation of our stock
price.
New
companies are formed in many ways. I’ve been involved in
founding successful companies in the hospitality, telecommunications, gaming and
finance industries. In 2014, I turned my attention to the
government contracting sector. Here I saw a highly fragmented
industry with over 500,000 contractors, the vast majority of which
were in sore need of non-core operational support. To fill this
unmet demand, we formed Novume’s predecessor, KeyStone
Solutions. Working with a team of highly skilled professionals who
had in-depth knowledge of the Gov Con sector, we took an aggressive
series of actions designed to facilitate building an end-to-end
service platform and unleash our growth
potential:
●
We acquired AOC Key Solutions,
Inc. in March
2016
●
We acquired Firestorm Solutions,
LLC and Firestorm Franchising, LLC in January 2017
●
We
signed an agreement of merger with Brekford Corp. in February
2017
●
We arranged for and closed on the sale of 80.1% of
Brekford’s vehicle upfitting business and created
Global
Public Safety in February 2017 as the first of our Enterprise Initiative
companies
●
We
completed an offering of $5 million of Series A Preferred Stock in
March 2017
●
We then identified a disruptive business model for
Brekford’s photo-enforcement business and put them on a
course to launch the Argos Guardian Move
Over Camera™ in
2018
●
We completed the merger with Brekford Traffic
Safety, forming Novume, in
August 2017
●
We acquired Global Technical
Services, Inc. and Global Contract Professionals, Inc.
in October 2017
●
We
purchased the assets of BC Management, Inc. in December
2017
●
We
purchased the assets of Secure Education Consultants, LLC in
January 2018
●
In
January 2018, we completed the process of listing our common stock
on the NASDAQ Capital Market
All of our acquisitions share common attributes -- they are
profitable stand-alone operations with services that expand,
enhance or add to our existing capabilities. They exploit
economies-of-scale across various disciplines and they create
additional cross-selling opportunities for us. I am pleased to
report that each of the businesses we have acquired is now
profitable at the operating level and all are growing
organically.
So here’s a summary of where we stand today. Our primary
businesses fall into one of three areas: Government Contract
Support; Risk Mitigation and Crisis Management, and Specialty
Staffing. Our fourth is the Enterprise Initiative, which consists
of carefully structured investments that represent low-cost,
high-reward opportunities for us.
Let me provide you with a little more detail on the current status
of each of these, how we have strengthened our board and our
outlook for 2018.
Current Operations
Government Contracting Support – The March 2018 passage of the Consolidated
Appropriations Act (CAA) has opened up a number of key
opportunities for us. AOC Key Solutions has been actively
positioning itself to benefit from the release of new RFPs in
several key areas including defense, homeland security,
infrastructure, veteran’s affairs, health and human services
and intelligence. Several billion dollars from this bill are being
devoted to information technology modernization including
cybersecurity, shared services, cloud migration, big data and
artificial intelligence, all of which are opening new business
opportunities for our clients. AOC Key Solutions is also now
working with other Novume subsidiaries in the areas of staffing,
traffic safety and school safety, which represent other critical
component areas within the CAA.
Risk Mitigation & Crisis Management – One of the most significant opportunities
in this group is in the business of addressing school and workplace
violence using our proprietary online behavioral risk threat
assessment training program, called BeRThaTM.
With over 132,000 schools in the U.S. and over $1 billion currently
being appropriated at the federal level to address school violence,
Firestorm’s scalable solution can support the vast majority
of schools that either have a sub-standard prevention plan or no
plan at all. Other opportunities for Firestorm include crisis and
risk management consultation within the insurance industry, risk
management services for some of the largest companies in the
country and continuity planning for the Gov Con market, where
Firestorm is collaborating with AOC Key Solutions to win new
business. Firestorm is also working on enhancing its solutions with
artificial intelligence.
Specialty Staffing –
Demand for technicians and engineering talent is currently at an
all-time high and Global Contract Professionals and Global
Technical Services are pursuing internal and external talent to
accommodate this demand on a daily basis. We continue to win
business in this space, which should help drive both top and bottom
line growth this year, and we see new opportunities unfolding in
areas such as IT and professional staffing. Additionally,
increasing synergies across other Novume businesses look to provide
additional outlets for solid growth and continuity among both of
our Global business units.
Enterprise Initiatives –
An exciting development within this area is at Brekford Traffic
Safety, which is currently field testing the Argos Guardian system,
which uses innovative vehicle-mounted detectors to enforce the
“move over” laws that currently exist throughout the
U.S. and Canada. Scheduled for release in July, Argos Guardian will
be a subscription-based service targeting hundreds of thousands of
police and utility vehicles in an effort to reduce the hundreds of
fatalities and significantly higher number of injuries that occur
every year involving roadside workers. At Global Public Safety, our
other Enterprise Initiative business, the 19.9% ownership stake we
retained in our police vehicle up-fitting business will provide us
with an annual profit distribution which should fall right to our
bottom line. Global Public Safety is a prime example of a low cost,
high reward investment that generates value for Novume shareholders
with no operational cost or balance sheet
exposure.
Strengthening Our Board
In
anticipation of our NASDAQ listing, we added two new independent
members to our board of directors.
Our
first new independent director is Christine Harada, who has over 20
years of experience in leading government and management consulting
organizations. Ms. Harada currently is a Bold Innovator at XPRIZE
Foundation, responsible for developing an XPRIZE for Clean Air.
XPRIZE is an innovation engine, a facilitator of exponential change
and a catalyst for the benefit of humanity. Concurrently, she is a
Fellow with the Los Angeles CleanTech Incubator. Before returning
to the private sector, Ms. Harada served as Federal Chief
Sustainability Officer and provided oversight for
sustainability-related initiatives across the federal government.
Her successes include developing and implementing policies that
resulted in an 18% reduction in federal government greenhouse gas
emissions, a 23% reduction in energy use at federal facilities and
177 billion gallons of drinkable water saved. She also was
responsible for $4B in federal building that led to estimated
efficiency gains that will save 1.4 million tons of CO2 emissions
annually.
Prior
to her White House role, Ms. Harada was the Acting Chief of Staff
and U.S. General Services Administration where she was responsible
for the overall operations supporting 12,000 federal workers with
an annual operating budget of $26B. While at the GSA, Ms. Harada
also served as Associate Administrator, Government-wide Policy and
Chief Acquisition Officer responsible for transforming a
“business model” to provide more proactive,
evidence-based policies, and increased transparency at the agency.
Ms. Harada’s private sector experience also includes serving
as a Global Manager at the Boston Consulting Group and a Principal
at Booz Allen Hamilton.
In
September 2017, we appointed Marta
Tienda, Maurice P. During Professor in Demographic Studies and
Professor of Sociology and Public Affairs at the Woodrow Wilson
School of Public and International Affairs at Princeton University,
to our board of directors. Professor Tienda brings a wealth of
experience to our board, serving as an independent trustee of the
Board of Trustees of the Teachers Insurance Annuity Association
(TIAA), the Alfred P. Sloan Foundation and the Jacobs Foundation of
Switzerland. She is the Director of the Wilson School’s
Program in Latino Studies and also a member of the Research
Advisory Committee of the American Education Research Association
and the Mellon Foundation Advisory OCI
Committee.
With
these additions, Novume now has seven directors, including four
independent directors. Our board is one of our strongest assets,
having broad and extensive experience with public companies,
finance, marketing and/or government entities, all of which provide
meaningful contributions and counsel to help guide management in
the execution of our growth strategy and serve our
shareholders.
2018 Outlook
On a
run-rate basis, we exited 2017 with annual revenue of over $44
million. We are excited about our plans for 2018, having solidified
the base upon which we can build each of our businesses. Looking
forward, we expect to continue to grow our businesses organically
and pursue opportunistic acquisitions as they are identified. For
our businesses already in place, the opportunities we are most
excited about in terms of near-term growth are Brekford’s
Argos Guardian and Firestorm’s BeRThA program.
In summary, we have come a long way in a short span of time. I am
convinced that our strategic approach to building sustainable value
in the service sector will serve us very well in the months and
years ahead and further establish Novume as an industry leader. We
look forward to sharing future product and M&A developments
with you, expanding our customer relationships and generating a
more substantive stream of revenue across our various businesses.
For more information on Novume, please visit our website at
www.novume.com
and view our corporate
presentation.
On behalf of the entire Novume management team and our board of
directors, I thank all of our employees for their dedication and
commitment to Novume’s success and you, our shareholders, for
your continued loyalty and support.
Sincerely,
Robert
A. Berman
Chief
Executive Officer
May 3,
2018
About Novume Solutions, Inc.
At its
core, Novume Solutions™ is about people – the right
people solving complex problems. Novume helps federal government
contractors to capture business, manage risk, run client back-end
services and perform their contract requirements. Novume provides
the scale and mass to deliver critical, specialized and
difficult-to-find human and infrastructure resources and expertise
at the enterprise level. For more information, please visit
novume.com.
Forward-Looking Statements
This
press release includes statements concerning Novume Solutions, Inc.
and its future expectations, plans and prospects that constitute
”forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
For this purpose, any statements that are not statements of
historical fact may be deemed to be forward-looking statements. In
some cases, you can identify forward-looking statements by terms
such as ”may,” ”should,”
”expects,” ”plans,”
”anticipates,” ”could,”
”intends,” ”target,”
”projects,” ”contemplates,”
”believes,” ”estimates,”
”predicts,” ”potential,” or
”continue,” by the negative of these terms or by other
similar expressions. You are cautioned that such statements are
subject to many risks and uncertainties that could cause future
circumstances, events, or results to differ materially from those
projected in the forward-looking statements, including the risks
that actual circumstances, events or results may differ materially
from those projected in the forward-looking statements,
particularly as a result of various risks and other factors
identified in our filings with the Securities and Exchange
Commission. All forward-looking statements contained in this press
release speak only as of the date on which they were made and are
based on management’s assumptions and estimates as of such
date. We do not undertake any obligation to publicly update any
forward-looking statements, whether as a result of the receipt of
new information, the occurrence of future events, or
otherwise.
Company contact:
info@novume.com
Investor contact:
Ed
McGregor/Jody Burfening
LHA
Investor Relations
212-838-3777
emcgregor@lhai.com
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