Wireless Matrix Announces First Quarter Fiscal 2013 Results
HERNDON, VA - (September 12, 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 months ended July 31, 2012.
All currency is expressed in U.S. dollars.
First Quarter 2013 Highlights
- Grew total subscriber base to 103,125, up from 85,106 subscribers a year earlier.
- Total revenues were $7.6 million, compared to $8.2 million in the first quarter of 2012.
- Application-related revenue grew 18% to $3.9 million, up from $3.3 million a year ago.
- Recurring service revenues of $6,289 were 83% of total revenues, an increase from 72% of total revenues in the comparable prior year quarter and were 6% higher than the prior year quarter.
- Overall gross margin was 70%, up from 63% a year earlier. Service gross margin was 80%, unchanged from Q1 2012.
- Adjusted EBITDA* was $463,000, compared to $436,000 in Q1 2012.
- Net loss was $(874,000) in Q1 2013, compared to $(674,000) a year earlier.
“The first quarter was one of solid execution and growth in our services business,” said Maria C. Izurieta, acting chief executive officer and chief financial officer of Wireless Matrix. “We completed the integration of our SkyGuard acquisition, built on the success of our channel partner strategy, launched new features and functionality of our FleetOutlook platform and furthered our next generation satellite solution. These steps position the company for improving growth and profitability.”
* See Non-IFRS Measures below
Financial and Operating Review
Application-related service revenue was $3.9 million in the first quarter of fiscal 2013, an increase of $0.6 million or 18% from $3.3 million in Q1 2012. The increase is primarily due to significant net additions of application subscribers, including those added through the SkyGuard, LLC acquisition in the second quarter of fiscal 2012. Satellite-related service revenues of $2.4 million were down 9% from $2.6 million in Q1 2012. Hardware and license revenues of $1.3 million were down $1.0 million from a year ago, due to a continuing wind-down of the amortization of previously-sold equipment, as well as $0.7 million of “last buy” satellite hardware devices sold to customers in Q1 2012. Total revenues in the first quarter were $7.6 million, a decrease of $0.6 million from revenues of $8.2 million a year earlier.
Wireless Matrix ended the first quarter with 103,125 total subscribers, a net increase of 18,019 from 85,106 on July 31, 2011. Total subscribers are down from 104,660 three months earlier, as 3,105 gross additions were offset by churn of 4,640 units. The churn was associated primarily with changes in a large customer’s contracted billing plan early in the quarter.
Overall gross margin was 70% in the first quarter of 2013, an improvement from 63% a year earlier. Service gross margin was unchanged at 80%, while hardware gross margin increased from 20% to 22%. The improvement in overall margin was primarily due to services comprising a higher proportion of total revenues.
Adjusted EBITDA* was $463,000 in the first quarter of 2013, compared to $436,000 in Q1 2012, as a year-over-year improvement in gross margin was offset by increased general & administrative and research & development expenses.
Wireless Matrix had a cash balance of $7.1 million at July 31, 2012, compared to $8.8 million at April 30, 2012. The Corporation has no debt, and its $4 million line of credit remains unused.
“We expect our ongoing investments in our go-to-market capabilities and product innovation to continue to produce results in fiscal 2013,” said Izurieta. “We believe the addressable market for our services is expanding, with opportunities to sell to new customer segments, track new asset types, and tailor our offering to new uses. One of our priorities this year will be to develop our next generation high speed satellite solution that meets the evolving needs of our customers.”
Wireless Matrix has scheduled a conference call to begin at 10:00 a.m. EDT on Wednesday, September 12, 2012, to discuss these results. The conference call dial-in number is 800.704.5185. 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#21604188), until 11:59 p.m. ET on September 14, 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 “Supplemental Non-IFRS measures” 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 Corporation’s 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 management’s 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 Corporation’s 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 Corporation’s regulatory filings, with the appropriate Securities Commission and SEDAR. These filings, including the Corporation’s AIF, are located at www.sedar.com.