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 2013 Highlights
"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
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
"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.
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