Q1 Results
WebTech Wireless Reports $10.5 Million in Revenue andFinal Restructuring Charges
Wed May 12,8:05 PM
VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 12, 2010) -WebTech Wireless Inc. (TSX: WEW.TO), a leadingprovider of vehicle fleet location-based services (LBS) and telematicstechnology, today reported revenue of $10.5 million for the fiscalquarter ended March 31, 2010. This compares to $6.7 million for the samequarter in the prior fiscal year for growth of 57%, driven by theaddition of the Company's InterFleet(TM) and NextBus(TM) businesses,acquired in late 2009 and compares to $8.3 million in the quarter endedDecember 31, 2009, for growth of 27%.
"This is our first fullquarterly period reporting consolidated results from all three of ourbrands, Quadrant(R), InterFleet and NextBus and the first period undernew management. We are obviously pleased to report revenues rising,margins improving and expenses falling. We are also pleased to beapproaching our goal of positive EBITDAS," said Scott Edmonds, WebTechWireless, President and CEO. "Feedback from our customers, distributorsand staff indicate the changes we have made and our renewed focus onexecution at all levels is having an impact. As we continue to get ourteams and operations more tightly integrated we can expect to see moresynergies and efficiencies and to further enhance our customerexperience, which will allow us to return our focus to revenue growthand our tradition of outstripping overall industry growth."
Keypoints from the quarter:
-- First quarter with revenue in excess of $10 million.
-- Recurring Subscriptions, Software and Services revenue totaled $6.2
million representing 59% of overall revenue, a trend which is expected
to continue, and which marks the first time hardware sales have
represented less than 50% of revenue.
-- Profit margins of 54% are slightly below the prior comparable period but
are significantly above those reported for the prior preceding quarter
and are two percentage points above those reported for the year ended
December 31, 2009.
-- Expenses in the quarter are 21% below expenses for the immediately prior
quarter - reflecting ongoing cost cutting implemented by new management,
and include more than $500,000 in non- recurring severance charges, and
are approximately double the expenses reported in the prior comparable
quarter, reflecting the addition of the InterFleet and NextBus business,
but also the addition of approximately $1.2 million in non-cash
Amortization and Stock Based Compensation expenses.
-- A loss of $1.9 million (
.02 per share) for the quarter which
translates to an Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock Based Compensation, ("EBITDAS") loss of
.9
million (
.01 per share), or
.4 million ($nil per share) when
severance charges from a reorganization of its sales department are
backed out of the results.
Since January 1, 2010, the Company has identified andimplemented cuts and operating changes through the integration of itsQuadrant, NextBus and InterFleet businesses which have resulted in thecarve-out of more than $2.5 million in annualized expenditures. Thebenefits of these synergies are only partially reflected in the reportedresults with the majority of the savings to be realized in futureperiods.
As of March 31, 2010, the Company is reporting totalassets of $56 million (December 31, 2009: $59 million) and workingcapital of $14 million (December 31, 2009: $17 million) with assetsbeing used to pay restructuring charges booked in Q4 2009.
Pro-forma results on a non-GAAP EBITDAS basis are determined as follows(millions):
Net loss as reported $ (1.9)
Add/Deduct:
Amortization 0.8
Stock based compensation 0.4
Tax recovery (0.2)
---------
EBITDAS/(Loss) (0.9)
Add:
One time severance charges 0.5
---------
Pro-forma results $ (0.4)
---------
Charges related to the amortization of intangibleassets acquired as part of the acquisition of the InterFleet and NextBusbusinesses, completed in October 2009 total $569,000 for the quarter,and are reflected in the table above.
Owen Moore, ChiefOperating Officer, added, "We are committed to getting this business torun on a cash flow/EBITDAS positive basis and although much remains tobe done we are heartened to see progress this early in the transitionprocess. We are particularly pleased to be reporting in excess of $10million in revenues, and hope to see continued growth this year as wecross-sell our solutions and further invest in our sales anddistribution channels."
A reminder that the Financial ResultsConference Call will be held tomorrow, May 13, 2010, at 8:00 am EasternTime (5:00 am Pacific Time). Interested parties may participate in thecall by dialing 1-800-951- 1214 or (212) 231-2900 (for internationalcallers). The conference call will be archived on the Company's websiteat: www.webtechwireless.com.