24% Year-Over-Year Growth in M2M Subscription Base To 1.52 Million. Non-GAAP EPS Increased 25% Year-Over-Year.
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, 2012.
Stratton Nicolaides, chairperson and CEO of Numerex, said:
“The first quarter marked a solid start to the year reaching a milestone in cumulative subscriptions surpassing 1.5 million, which reflected 24% year over year growth from the end of first quarter of 2011. As a result, we are maintaining our annual subscription growth guidance of 25% to 30%.”
“Recurring revenues grew at 12.4% in the first quarter and are expected to improve significantly over the course of the year, beginning with the second quarter, and align with our growth guidance of 18% to 23%, which we affirm.”
|Financial metrics for the first quarter of 2012 include:
($ millions, except as noted*)
|Three Months Ended|
Recurring revenue and support
|Embedded device and hardware revenue||4.4||4.8|
|Non-GAAP earnings per fully diluted share (EPS)||0.10||0.08|
|GAAP earnings per fully diluted share (EPS)||0.02||0.01|
Mr. Nicolaides noted, “The Company increased earnings by over 30% compared to the first quarter of last year, as a result of improved margins and operating leverage. This favorable result was achieved even considering significant investment in engineering and in business and product development.”
The Company’s First Quarter Financial Highlights:
- During the quarter ended March 31, 2012, the Company added 83,000 subscriptions, as compared to 53,000 subscriptions added in the first quarter of 2011.
- Reported revenues of $14.5 million in the first quarter of 2012, compared to $13.8 million in first quarter of 2011. During the quarter ended March 31, 2012, the Company reported recurring revenues of $10.1 million, up 12% from $9.0 million during the first quarter of 2011. Total revenues of $14.5 million include $68,000 generated by ‘Other Services’ in the three months ended March 31, 2012 compared to $301,000 during the same period in 2011. Given the immaterially of this segment, it will no longer be separately categorized in the Statement of Operations.
- Consolidated gross margin for the three months ended March 31, 2012 was 46.7% compared to 44.2% in the first quarter in 2011, an improvement due to revenue mix and contribution margin.
- Total GAAP operating expenses were $6.4 million for the three months ended March 31, 2012 compared to $5.8 million in the first quarter of 2011. Total non-GAAP operating expenses, excluding non-cash compensation expenses were $6.0 million during the first quarter of 2012 compared to $5.6 million in the year ago period. The year over year increase in operating expense was primarily due to additional investment in engineering resources to support future growth.
- GAAP net earnings for the three months ended March 31, 2012 were $321,000 or $0.02 per fully diluted share compared to $230,000 or $0.01 per fully diluted share last year, a 40% increase.
- Non-GAAP net earnings for the three months ended March 31, 2012 were $1.6 million or $0.10 per fully diluted share compared to $1.2 million or $0.08 per fully diluted share during the first quarter of 2011, an improvement of 30%. A reconciliation of this measure to GAAP results has been provided in the financial table below and further discussion of this measure as compared to GAAP is included elsewhere in the press release.
- As of March 31, 2012, Numerex reported cash and cash equivalents of $9.2 million and long-term debt of $4.2 million.
The Company’s Operational Highlights Include:
- Unveiled Numerex new Location-Based Services (LBS) platform, which provides enterprises with secure, scalable solutions for monitoring, tracking and recovering a wide variety of mobile assets. This new platform addresses the needs of agriculture, transportation, construction and many other industries seeking to rapidly implement cost-effective tracking and monitoring solutions for mobile or semi-mobile assets.
- Launched Numerex M2M interactive platform. The new capabilities – including web services application program interfaces, website integration, and integrated smartphone applications – are part of the highly configurable, intelligent, cloud-based Platform as a Service (PaaS) that supports interactive data, location, and messaging services.
- Received the 2011 Product of the Year Award from Satellite Spotlight, a leading website delivering satellite technology news, for Numerex Satellite FLEX™.
- Selected as one of the Top 40 Innovative Technology Companies in Georgia by the Technology Association of Georgia (TAG), the state’s leading association dedicated to the promotion and economic advancement of Georgia’s technology industry.
Mr. Nicolaides concluded, “We enter the second quarter with a strong pipeline driven by the introduction of new products and the commercialization and launch of several customer solutions, which we expect will favorably impact revenues and earnings. Numerex remains well positioned to leverage its infrastructure by delivering comprehensive M2M services to a broad range of customers through its horizontal platforms.”