Company Posts 25% Year over Year Subscription Growth, GAAP Profitable, Reaffirms Guidance for 2011
Numerex Corp, a leading provider of business services, technology, and products for the worldwide machine-to-machine (M2M) market, today announced financial results for its first quarter ended March 31, 2011.
“Numerex is poised to benefit from the commercialization of key projects, recently forged alliances with M2M industry leaders, and new product launches,” stated Stratton Nicolaides, chairperson and CEO of Numerex. “We continue to invest in our Business Solutions client programs with new hires and state-of-the-art infrastructure required to meet anticipated demand from wireless operators and global enterprise groups. We believe that our focus on scaling our M2M service platforms will allow us to pursue additional growth opportunities and result in improved operating leverage.”
Key metrics for the first quarter 2011 include:
|Three Months Ended|
|Total M2M Revenues ($ millions)||13.5||12.7|
|M2M Service Revenues ($ millions)||9.0||7.9|
|GAAP Net Earnings/(loss) ($ thousands)||230||(31)|
|Earnings per share ($)||0.02||0.00|
The Company’s Financial Highlights include:
- Increased subscriptions by 25% to 1,224,000 at the end of the first quarter of 2011, compared to 977,000 recorded at the end of the first quarter of 2010. During the quarter ended March 31, 2011, the Company added 53,000 net subscriptions, as compared to 40,000 net subscriptions added in the first quarter of 2010.
- Reported consolidated revenue of $13.8 million compared to $13.0 million in the first quarter of 2010. During the quarter ended March 31, 2011, the Company reported service revenues of $9.2 million and hardware revenues of $4.6 million compared to $8.2 million in service revenues and $4.8 million in hardware revenues, respectively, during the same period in 2010.
- Consolidated gross margin for the three months ended March 31, 2011 was 44.2% compared to 44.2% during the same period in 2010.
- GAAP earnings from operations were $270,000 compared to $45,000 in the first quarter of 2010. The increase was due to an improved revenue mix of higher-margin service revenues that were partially offset by the growth in sales and marketing expenses. GAAP net earnings for the three months ended March 31, 2011 were $230,000 compared to a loss of $31,000 during the same period in 2010.
- Ended the first quarter of 2011 with cash and cash equivalents of $4.1 million compared to $10.3 million at December 31, 2010. The decrease in cash and cash equivalents was primarily due to a litigation settlement of $5.5 million, which included a repurchase of 320,833 shares at $9.04 per share.
- On April 25, 2011, announced an increase to the Company’s credit facility from $5 million to $10 million and the filing of a $30 million universal shelf registration statement. No amounts are currently outstanding under the credit facility.
The Company’s Operational Highlights include:
- Announced a co-marketing agreement with Tekelec, the mobile broadband solutions company, to deliver intelligent M2M solutions to global service providers. The solutions combine Numerex’s M2M service platforms; embedded and integrated devices; and M2M service expertise, with Tekelec’s M2M service enablement solution, including Subscriber Data Management, Policy and Session Management, Mobile Messaging, and Performance Intelligence Center.
- Numerex and Enfora, a subsidiary of Novatel Wireless, announced an agreement to enable Intelligent Global Pooling Systems (iGPS Company, LLC) to provide global monitoring of its innovative all-plastic pallets with embedded RFID tags through the use of the Numerex WorldPass global network service.
- Renewed its contract with the QinetiQ group, in which the Company plays a pivotal role, to provide continuing support to FEMA’s disaster relief operations.
- Announced collaboration with Cinterion that will combine Cinterion’s portfolio of wireless modules with the Company’s network and application technology to provide a full range of integrated M2M services.
|Financial Outlook for Fiscal 2011|
|Annual Subscription Growth||25%-30%|
|Annual M2M Service Revenue Growth||18%-23%|
Numerex Corp is a leading provider of business services, technology, and products used in the development and support of machine-to-machine (M2M) solutions for the enterprise and government markets worldwide. The Company offers Numerex DNA® that includes hardware and smart Devices, cellular and satellite Network services, and software Applications that are delivered through Numerex FAST™ (Foundation Application Software Technology). Customers typically subscribe to device management, network, and application services through hosted platforms. Business services enable the development of efficient, reliable, and secure solutions while simplifying and speeding up deployment through streamlined processes and comprehensive integration services. Numerex is ISO 27001 information security-certified. “Machines Trust Us®” represents the Company’s focus on M2M data security, service reliability, and round-the-clock support of its customers’ M2M solutions. For additional information, please visit www.numerex.com.