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8-K - FORM 8-K - TELULAR CORP | c04062e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - TELULAR CORP | c04062exv99w2.htm |
Exhibit 99.1
For Immediate Release July 28, 2010
Telular Corporation Reports Third Quarter 2010 Results
| Total Recurring Service Revenue Up 22.7% Year-Over-Year | |
| Company Increases Cash Balance to $24.6 million |
CHICAGO, IL USATelular Corporation (NASDAQ: WRLS)
Telular Corporation, a global leader in connecting businesses and machines over wireless networks,
today announced financial results for the third quarter ended June 30, 2010. In the third quarter,
Telular reported revenue of $11.0 million and net income of $960,000, or $.06 per diluted share.
For the third quarter of 2010, net income before non-cash items increased to $1.8 million compared
to $571,000 in the prior year period. Net income before non-cash items is a non-GAAP measure which
adds back depreciation, amortization and stock-based compensation expense to net income. For
further information, see the reconciliation of this measure to net income in accordance with GAAP,
on the last page of this press release.
In the third quarter of 2010, recurring service revenue grew sequentially from $6.8 million to $7.1
million, which also represents a 22.7% increase over the prior year period. This includes
recurring service revenue of $6.7 million from Telguard and $370,000 from TankLink. There were
over 18,000 new Telguard activations which were offset by a similar number of deactivations, of
which 14,500 came from our largest security dealer customer as a result of its effort to purge
previously cancelled accounts. Most of these deactivations related to end users who terminated
their service with this dealer within the past three years, but whose Telguard service had not been
terminated with Telular by the dealer. Telular expects this dealer to continue to have unusually
high deactivation rates through the end of the fourth fiscal quarter as the planned account
reconciliation is completed, after which overall churn is expected to normalize at an annualized
rate of approximately 7%, a rate well below the security industry average. Telguard service
revenue was able to grow sequentially even without increasing the subscriber base because units
deactivated by this large dealer generate less revenue than new activations with other security
dealers.
In the third quarter of 2010, Telular sold approximately 16,500 Telguard units resulting in
Telguard product revenues of $2.6 million. At quarter end, there were 558,000 active Telguard
accounts and 17,700 billable tanks monitored by TankLink.
Telular also announced today that it purchased approximately 86,000 shares under its stock
repurchase plan during the fiscal third quarter, and has $4.7 million remaining under the
previously authorized buy-back program.
Our recurring revenue stream continues to grow each period, and we are very focused on continuing
this trend, commented Joe Beatty, president and chief executive officer of Telular Corporation.
Our newest Telguard product, the TG-1 Express, is being very well received, and our Telguard
Advantage Program was launched July 1 with the goal of building customer loyalty and driving
volume. I am pleased with the progress being made within our TankLink line of business as
evidenced by our growing number of billable tanks and burgeoning potential in the CALA markets.
Jonathan Charak, chief financial officer of Telular Corporation, added, Through the third quarter,
our net income and net income before non-cash items have already exceeded those amounts for the
entire 2009 fiscal year. We expect our recurring service revenue for both Telguard and TankLink to
continue its sequential growth. Moreover, based on recent results, we now expect to sell between
15,000 and 25,000 new Telguard units in the fourth quarter.
Investor Conference Call
Telulars quarterly conference call will be held today at 4:30 p.m. Eastern Time. To participate on
the teleconference from the United States and Canada dial 800-762-9441 (International dial
480-629-9675). You may also monitor the call via webcast at
www.telular.com (select Earnings
Conference Calls in Investor Relations). A replay of the call will be available from Wednesday,
July 28, 2010 beginning at 6:30 p.m. ET through Sunday, August 1, 2010 ending at 11:59 p.m. ET by
dialing 800-406-7325 (enter pass code 4329707#) or internationally at 303-590-3030 (enter pass code
4329707#).
About Telular
Telular Corporation provides event monitoring and wireless access solutions for business and
residential customers, enabling devices such as phones, faxes, computers and commercial machinery
to be connected using wireless technology. With over 20 years of experience in the wireless
industry, Telular Corporation has
developed solutions to deliver remote access for voice and data without significant network
investment or disruption. Headquartered in Chicago, Telular Corporation has additional offices in
Atlanta and Miami. For more information, please visit www.telular.com.
Media Contact:
Pam Benke
Telular Corporation
pbenke@telular.com
(678) 909-4616
Pam Benke
Telular Corporation
pbenke@telular.com
(678) 909-4616
Please be advised that some of the information in this release presents the Companys
intentions, beliefs, judgments and expectations of the future and are forward-looking
statements. It is important to note that the Companys actual results could differ
materially from these forward-looking statements. Additional information concerning factors
that could cause actual results to differ materially from those in the forward-looking
statements is contained from time to time in the Companys SEC filings, including but not
limited to the Companys report on Form 10-K for the fiscal year ended September 30, 2009.
Copies of these filings may be obtained by contacting the Company or the SEC.
TELULAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AND STATEMENTS OF CASH FLOWS
(Dollars in thousands, except share data)
BALANCE SHEETS
June 30, | September 30, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 24,595 | $ | 17,904 | ||||
Trade receivables, net |
6,286 | 7,589 | ||||||
Inventories, net |
5,737 | 7,803 | ||||||
Prepaid expenses and other current assets |
299 | 273 | ||||||
Total current assets |
36,917 | 33,569 | ||||||
Property and equipment, net |
2,118 | 2,193 | ||||||
Other assets |
4,548 | 4,563 | ||||||
Total assets |
$ | 43,583 | $ | 40,325 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
$ | 5,115 | $ | 4,903 | ||||
Total stockholders equity |
38,468 | 35,422 | ||||||
Total liabilities and stockholders equity |
$ | 43,583 | $ | 40,325 | ||||
Outstanding shares |
14,905,151 | 14,911,688 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
(Unaudited) | (Unaudited) | |||||||
Net cash provided by (used in) continuing operations: |
||||||||
Net cash provided by operating activities |
$ | 7,415 | $ | 5,819 | ||||
Net cash used in investing activities |
(582 | ) | (3,107 | ) | ||||
Net cash used in financing activities |
(142 | ) | (9,012 | ) | ||||
6,691 | (6,300 | ) | ||||||
Net cash provided by discontinued operations |
| 3,333 | ||||||
Net increase (decrease) in cash and cash equivalents |
$ | 6,691 | $ | (2,967 | ) | |||
TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues |
||||||||||||||||
Net product sales |
$ | 3,948 | $ | 6,600 | $ | 15,072 | $ | 18,601 | ||||||||
Service revenue |
7,054 | 5,751 | 20,308 | 16,348 | ||||||||||||
Total revenue |
11,002 | 12,351 | 35,380 | 34,949 | ||||||||||||
Cost of Sales |
||||||||||||||||
Net product cost of sales |
3,310 | 5,099 | 12,460 | 13,848 | ||||||||||||
Service cost of sales |
2,704 | 2,540 | 8,101 | 7,348 | ||||||||||||
Total cost of sales |
6,014 | 7,639 | 20,561 | 21,196 | ||||||||||||
Gross margin |
4,988 | 4,712 | 14,819 | 13,753 | ||||||||||||
Operating Expenses |
||||||||||||||||
Engineering and development expenses |
1,044 | 1,142 | 3,552 | 3,655 | ||||||||||||
Selling and marketing expenses |
1,382 | 1,707 | 4,567 | 5,014 | ||||||||||||
General and administrative expenses |
1,659 | 1,337 | 4,640 | 4,451 | ||||||||||||
Total operating expenses |
4,085 | 4,186 | 12,759 | 13,120 | ||||||||||||
Income from operations |
903 | 526 | 2,060 | 633 | ||||||||||||
Other income, net |
99 | 77 | 276 | 231 | ||||||||||||
Income from continuing operations before income taxes |
1,002 | 603 | 2,336 | 864 | ||||||||||||
Provision for income taxes |
42 | 7 | 84 | 13 | ||||||||||||
Income from continuing operations |
960 | 596 | 2,252 | 851 | ||||||||||||
Loss from discontinued operations |
| (557 | ) | | (397 | ) | ||||||||||
Net income |
$ | 960 | $ | 39 | $ | 2,252 | $ | 454 | ||||||||
Income (loss) per common share: |
||||||||||||||||
Basic |
||||||||||||||||
Continuing operations |
$ | 0.06 | $ | 0.03 | $ | 0.15 | $ | 0.05 | ||||||||
Discontinued operations |
| (0.03 | ) | $ | | $ | (0.02 | ) | ||||||||
Net Income |
$ | 0.06 | $ | | $ | 0.15 | $ | 0.03 | ||||||||
Diluted |
||||||||||||||||
Continuing operations |
$ | 0.06 | $ | 0.03 | $ | 0.15 | $ | 0.05 | ||||||||
Discontinued operations |
| (0.03 | ) | $ | | $ | (0.02 | ) | ||||||||
Net Income |
$ | 0.06 | $ | | $ | 0.15 | $ | 0.03 | ||||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic |
14,939,803 | 17,036,738 | 14,937,170 | 17,875,501 | ||||||||||||
Diluted |
15,325,862 | 17,143,022 | 15,351,480 | 17,927,219 |
Reconciliation of Non-GAAP Measures
We use net income before non-cash items as an additional measure of our operating performance.
This measure is not recognized under generally accepted accounting principles. The reconciliation
below demonstrates how we calculate this measure from our financial statements.
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Net income |
$ | 960 | $ | 39 | $ | 2,252 | $ | 454 | ||||||||
Non-cash compensation |
529 | 267 | 1,275 | 1,176 | ||||||||||||
Depreciation and amortization |
293 | 265 | 852 | 791 | ||||||||||||
Net income before non-cash items |
$ | 1,782 | $ | 571 | $ | 4,379 | $ | 2,421 | ||||||||
Net income before non-cash items should be considered in addition to, but not as a substitute
for, other measures of performance reported in accordance with accounting principles generally
accepted in the United States. While we believe that net income before non-cash items, as
defined above, is useful within the context described above, it is in fact incomplete and not a
measure that should be used to evaluate the full performance of Telular Corporation. Such
evaluation needs to consider all of the complexities associated with our business, including,
but not limited to, how past actions are affecting current results and how they may affect
future results, how we have chosen to finance the business and how regulations and other
aforementioned items affect the final amounts that are or will be available to shareholders as a
return on their investment. Net income determined in accordance with U.S. GAAP is the most
complete measure available today to evaluate all elements of our performance.