Wireless Matrix Announces Second Quarter Fiscal 2013 Results
HERNDON, VA - (December 20, 2012) - Wireless Matrix Corporation (TSX: WRX), the leading provider of software and communications to improve service fleet performance metrics, today announced financial and operating results for the three and six months ended Oct. 31, 2012.
All currency is expressed in U.S. dollars.
Q2 Quarter 2013 Highlights
- Total subscriber base was 103,259 at quarter end, with 2,750 application subscribers added this quarter.
- Total revenues were $7.2 million in Q2 2013, compared to $7.6 million the previous year.
- Application-related revenue was $3.9 million, up 14% from $3.4 million in Q2 2012.
- Overall gross margin was 69%, a 5% increase compared with 64% in Q2 2012. Service gross margin was 79% versus 78% a year earlier.
- Adjusted EBITDA was $0.1 million, compared to $0.3 million in Q2 2012.
- Net loss was $1.2 million in Q2 2013, compared with a net loss of $0.7 million in 2011 resulting from lower satellite overage revenue and completion of proprietary hardware deferred amortization as anticipated.
- Significant product expansion, both in devices and service features, highlighted by the introduction of enhanced versions of FleetOutlook® and new devices to track fixed and other assets.
- Won contract with prestigious university in the western United States to provide fleet tracking for up to 1,100 vehicles.
- Expanded marketing partnership with key wireless carrier subsequent to quarter end.
- Expanded existing relationship with a cable company and renewed our agreement with a pay-for-television client.
“During the second quarter, we added a new vertical industry, education, and renewed several key customers as well as making good progress in expanding our partnerships and our products – two priorities to increase sales in future quarters,” said Maria C. Izurieta, acting chief executive officer and chief financial officer of Wireless Matrix. “A major highlight was the expansion of our marketing partnerships by growing our relationship with a key wireless carrier and adding new partners. In addition, our recent product innovations have broadened our addressable market, providing opportunities for telemetry based services and tracking non-vehicle based assets.”
* See Non-IFRS Measures below
Financial and Operating Review
Application-related service revenue was $3.9 million in the second quarter of fiscal 2013, an increase of 14% from $3.4 million in Q2 2012. The increase is primarily due to significant net additions of application subscribers, including those added through the SkyGuard, LLC acquisition. Satellite-related service revenues of $2.3 million decreased by 11% from $2.6 million in Q2 2012. Significant unexpected satellite overage usage was incurred by a client in Q2 2012, and current usage levels have since returned to expected levels. Hardware and license revenues of $1.1 million were down from $1.7 million a year ago as deferred amortization declined as expected due to amortization schedules continuing to wind down on previously sold equipment. Excluding this, hardware revenue would have increased 12% over the same period last year. Total revenues in the second quarter were $7.2 million, compared with $7.6 million a year earlier.
Wireless Matrix ended the second quarter with 103,259 total subscribers, compared with 103,231 at the end of Q2 fiscal 2012.
Overall gross margin was 69% in the second quarter of 2013, an improvement of 5% over the previous year. Hardware gross margin declined from 15% to 12%, while service gross margin rose to 79% from 78%. The improvement in overall margin was primarily due to services comprising a higher proportion of total revenues.
Adjusted EBITDA* was $100,000 in the second quarter of 2013, compared to $286,000 in Q2 2012.
Wireless Matrix had a cash balance of $7.2 million at October 31, 2012, compared to $7.1 million at July 31, 2012. The Corporation has no debt.
The Corporation announced on December 20, 2012, that it has reached an agreement to sell all the shares of Wireless Matrix USA Inc., a Delaware corporation and wholly-owned subsidiary of Wireless Matrix (“Wireless USA”) to CalAmp Corp. (“CalAmp”), a leader in wireless communications solutions, for $53.0 million in cash (“Transaction”). Wireless USA is the primary operating subsidiary of the Company. The agreement is subject to the approval of the shareholders of the Corporation, CalAmp securing funding to complete the purchase and other closing conditions. The Transaction is expected to close within approximately 75 days. Upon closing of the Transaction, the Corporation plans to undergo an orderly liquidation and to return 100% of the remaining capital to its shareholders (less a reasonable expense fund for its representatives to conduct this transaction and liquidation) and de-list from the Toronto Stock Exchange.
Wireless Matrix has scheduled a conference call dial-in number is 800.404.8174. A replay of the conference call will be available on the Company’s website subsequent to the call at www.wirelessmatrix.com or by dialing 800.558.5253 (code#21628972), until 11:59 p.m. ET on December 22, 2012.
About Wireless Matrix
Wireless Matrix Corporation (TSX: WRX) provides fleet solutions to improve delivery metrics. The company’s software and wireless data solutions provide intelligence for managing, measuring and monitoring service execution. Users consistently report greater on-time arrivals, increased productivity and lower total operating expenses. The Wireless Matrix solution suite includes FleetOutlook®, a web-based platform providing fleet operators complete visibility of their operations and vehicle mounted cellular and satellite wireless data communication services. Wireless Matrix is headquartered in Herndon, Va. For more information visit www.wirelessmatrix.com.
In addition to providing measures in accordance with International Financial Reporting Standards, Wireless Matrix presents certain supplemental measures that are used by Management to manage and measure operations. These are gross margin, operating expenses, adjusted EBITDA, ARPU, and churn rates. These measures do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS) and are therefore unlikely to be comparable to similar measures presented by other companies. Investors are urged to refer to the ďSupplemental Non-IFRS measuresĒ section in our Management Discussion and Analysis for more details.
Forward Looking Statements
General information regarding the Corporation set forth in this document, including management’s assessment of the Corporationís future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties, some of which are beyond the Corporation’s and managementís control, including but not limited to, the impact of general economic conditions, industry conditions, market demand, dependence on key customers, and their contract renewals at existing ARPU and with the number of their subscribers on our services, financial conditions and wherewithal of customers, non-infringement on third-party technology, ability to grow through acquisition, technological aptitude and scalability and reliability of products, intellectual property rights, inventory management, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of estimates, industry competition, availability of qualified personnel and management, ability for sales and marketing investments to garner intended results, stock market volatility, timely and cost-effective access to sufficient capital from internal and external sources, ability to integrate and realize anticipated benefits from acquisitions, ability to procure, utilize and resell third party network communications and hardware at favorable rates, ability to successfully transition satellite wireless data communications subscribers to our next generation broadband satellite offering, ability to drive shareholder value through strategic initiatives, and ability to realize cost savings and margin improvements from restructuring initiatives and outsourcing activities and to effectively manage growth. The Corporationís actual results, performance or achievement could differ materially from those expressed in or implied by, these forward-looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward-looking statements will provide what, if any, benefits to the Corporation. All data presented herein should be read in conjunction with the Corporationís regulatory filings, with the appropriate Securities Commission and SEDAR. These filings, including the Corporationís AIF, are located at www.sedar.com.