Float My BoatAirIQ to Acquire Boatracs Business and Enter the Marine Market; Marine Fleets Further Advance AirIQ's Telematics Services Consolidation
9/14/04
TORONTO, Sep 14, 2004 (BUSINESS WIRE) --
AirIQ Inc. (TSX:IQ), a leader in the Telematics industry, announces that it has entered into an agreement to acquire assets of Boatracs, LLC, of San Diego, California, a Telematics Service Provider to the commercial marine industry throughout North America.
The acquisition is structured as an asset purchase transaction through its US subsidiary, AirIQ U.S., Inc., with a purchase price of US$5,000,000 (CDN$6,500,000). The acquisition is subject to and conditional upon AirIQ obtaining financing and other customary closing conditions. AirIQ has up to 120 days from September 14, 2004, to complete financing arrangements.
"We are pleased to be able to add the marine vertical to our broad suite of service offerings. Boatracs is clearly a pre-eminent brand in the commercial marine sector," explains Donald Simmonds, President and CEO of AirIQ. "Furthermore, the addition of this profitable venture, a noteworthy step in our consolidation strategy, accelerates our progression towards a positive cash flow position," Mr. Simmonds continues. "With the completion of this acquisition on the current timetable, and with the anticipated performance of our existing businesses, we anticipate being cash flow positive in the first quarter of 2005."
Boatracs is an established location-based service provider to the offshore commercial marine industry serving both supply vessels (known in the industry as "workboats") and oceanic commercial fishing operations. A long term exclusive license from Qualcomm Incorporated for the coastal waters and inland waterways of the US and the Gulf of Mexico, allows Boatracs to use OmniTRACS(R) satellite technology to supply its services. Under AirIQ ownership, it is expected that Boatracs will expand its service offering to new markets, grow its offshore subscribers in North America and add AirIQ's proven terrestrial-based services for inland commercial and consumer marine applications.
The Boatracs division of AirIQ will be led by industry veteran David Brandos, currently the Vice President of Business Development for Boatracs. Dave is a champion of the wireless data and location-based services industries having held previous executive or board roles at Qualcomm, Alltel Communications, Pharos, Aeris.net and the Cellular Telecommunications & Internet Association (CTIA).
Boatracs' unaudited annualized revenues, based on the second quarter ended June 30, 2004, are approximately US$5,436,000 (CDN$7,066,000). The Boatracs business is anticipated to produce approximately US$850,000 (CDN$1,105,000) of annualized earnings before interest, depreciation and amortization (EBITDA), based on the second quarter of 2004, and various steps that will be taken post closing to integrate duplicative processes.
Concurrent with the signing of the asset purchase agreement, AirIQ has delivered a deposit to Boatracs in the amount of US$200,000 (CDN$260,000) which is non-refundable except in certain circumstances. In the event that the closing does not occur within 60 days, AirIQ may extend the closing date for two 30-day periods by delivering to Boatracs an additional deposit, in each case, of US$75,000 (CDN$97,500).
All CDN dollar figures in this news release have been converted on the basis of $1.30 Canadian for each $1 US.
About AirIQ
AirIQ trades on The Toronto Stock Exchange under the symbol IQ. A leader in the Telematics marketplace, AirIQ is headquartered in Pickering, near Toronto, Canada. The Company operates as a wireless Internet applications service provider specializing in Telematics. Telematics is the name given to information and control messages sent wirelessly to and from vehicles. AirIQ's services are offered primarily to three large commercial markets (rental vehicle, commercial transport and heavy equipment fleets) and to the consumer market. AirIQ gives vehicle owners the abilities to manage and protect their mobile assets. AirIQ's services include: vehicle locating, boundary notification, automated inventory, maintenance reminders, security alerts, vehicle disabling, unauthorized movement alerts and many more features. For additional information on AirIQ, its products and services, and the recent successful acquisition of Aircept.com, LLC, please visit the Company's website at www.airiq.com or call 1(888)606-6444.
About Boatracs
For over a decade, Boatracs has been setting the pace in the maritime communications field, providing cost-effective integrated hardware and software solutions for over 400 commercial fleets. The Boatracs solution is backed by a Network Operations Center that operates 24 hours a day, 7 days a week, 365 days a year. Boatracs helps its customers achieve significant cost savings by automating workflow and integrating their operations management. For more information, please call (619)-438-6000 or visit www.boatracs.com.
Forward-looking Statements
This news release contains forward-looking information based on management's best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains words such as "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes and results may differ materially from those expressed in such forward-looking statements. AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.
EBITDA is not a recognized measure under Canadian generally accepted accounting principles (GAAP). Management believes that, in addition to net income (loss), EBITDA is a useful supplemental measure as it is used by certain investors as one measure of AirIQ's financial performance. Investors should be cautioned, however, that EBITDA should not be construed as an alternative to net income (loss) determined in accordance with GAAP as an indicator of AirIQ's performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. AirIQ's method of calculating EBITDA may differ from other companies and, accordingly, EBITDA may not be comparable to measures used by other companies.