EX-99.1 2 c92415exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(TELULAR CORPORATION LOGO)
For Immediate Release — November 5, 2009
Telular Corporation Reports Fourth Quarter and Fiscal Year 2009 Results
- Q409 Telguard Sales Up 35% Year-Over-Year
- Company Reaches 500,000 Total Subscribers Milestone, with Strong Subscriber Adds in Quarter
- Total Recurring Service Revenue Up 29% Year-Over-Year and Now Represents 50% of Total Revenue
CHICAGO, IL USA—Telular Corporation (NASDAQ: WRLS)
Telular Corporation, a global leader in connecting businesses and machines over wireless networks, today announced financial results for the fourth quarter and fiscal year ended September 30, 2009. In the fourth quarter, Telular reported revenue of $12.2 million, about flat with last quarter, and grew net income sequentially to $1.4 million or $0.09 per diluted share, from $39,000 or $0.00 per diluted share. Fourth quarter net income included a benefit to cost of sales of $670,000 resulting from successfully negotiating a reduction of a contractual liability.
For the fourth quarter of 2009, income from continuing operations before non-cash items increased to $1.9 million, including the benefit to cost of sales, compared to $1.1 million in the prior quarter. Income from continuing operations before non-cash items is a non-GAAP measure which adds back depreciation, amortization and stock-based compensation expense to income from continuing operations. For further information, see the reconciliation of this measure to income from continuing operations in accordance with GAAP, on the last page of this press release.
In the fourth quarter of 2009, Telguard product revenues increased 56% year-over-year to $4.5 million. Telguard service revenues increased sequentially from $5.4 million to $5.8 million and were up approximately 22% from the prior year period. Recurring revenue from services now represents 50% of total revenue. In the fourth quarter of 2009, Telular sold approximately 33,000 Telguard units, within the expected range, and activated approximately 36,000 new Telguard subscribers, ending the period with approximately 500,000 subscribers. TankLink and Terminal product sales were $1.7 million in the fourth quarter of 2009.

 

 

 

“Demand for our Telguard product remains strong, as we increased Telguard sales 35% from the prior year period,” commented Joe Beatty, president and chief executive officer of Telular Corporation. “Our growth is being fueled by the trend toward wireless as the primary communication path for security applications. Going forward, we expect Telguard unit sales to be in the range of 30,000 to 35,000 per quarter which will continue to drive our growth of recurring revenue.”
“We had strong performance from Telguard activations in the quarter, reaching the 500,000 total subscribers milestone on September 29, 2009. Fourth quarter recurring revenue from our Telguard service business increased 22% over the prior year period and now, when combined with Tanklink recurring service revenue, represents 50% of total revenue. We demonstrated strong operational efficiencies in the quarter, translating to improved bottom line performance, even while revenues remained flat sequentially. We have $1.2 million remaining in our stock repurchase program, a solid balance sheet with cash and cash equivalents of $17.9 million, and remain focused on maximizing long-term, shareholder value,” concluded Mr. Beatty.
For fiscal year 2009, the Company reported revenue of $47.2 million. The Company reported fiscal year 2009 income from continuing operations of $2.3 million, or $0.13 per diluted share. For fiscal year 2009, income from continuing operations before non-cash items was $4.7 million.
Investor Conference Call
Telular’s 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 877-941-2324 (International dial 480-629-9716).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 Thursday, November 5, 2009 beginning at 6:30 p.m. ET through Sunday, November 8, 2009 ending at 11:59 p.m. ET by dialing 800-406-7325 (enter pass code 4177501#) or internationally at 303-590-3030 (enter pass code 4177501#).

 

 

 

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.
Investor Relations Contact:
Brinlea Johnson
The Blueshirt Group
(212)-551-1453
brinlea@blueshirtgroup.com
Cautionary Note Regarding Forward-Looking Statements
The Company includes certain estimates, projections and other forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 in its reports and in other publicly available material. Statements regarding expectations, including performance assumptions and estimates relating to capital requirements, as well as other statements that are not historical facts, are forward-looking statements. These statements reflect management’s judgments based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer growth and retention, pricing, operating costs and the economic environment.
The words “estimate”, “project”, “intend”, “expect”, “believe”, “target” and similar expressions are intended to identify forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report. Except as is required by law, the Company is not obligated to and expressly disclaims any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this report or unforeseen events. Other risks and uncertainties are discussed in Exhibit 99 to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008 which is hereby incorporated by reference

 

 

 

TELULAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AND STATEMENTS OF CASH FLOWS
(Dollars in thousands, except share data)
BALANCE SHEETS
                 
    September 30,     September 30,  
    2009     2008  
    (Unaudited)        
ASSETS
                
Cash and cash equivalents
   $ 17,904     $ 21,168  
Trade receivables, net
     7,589       6,904  
Inventories, net
     7,803       10,007  
Prepaid expenses and other current assets
     273       1,023  
Assets of discontinued operations
     —       4,709  
 
            
Total current assets
     33,569       43,811  
 
                
Property and equipment, net
     2,193       2,016  
Other assets
     4,563       2,142  
 
            
Total assets
   $ 40,325     $ 47,969  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
   $ 4,903     $ 7,802  
Total stockholders’ equity
     35,422       40,167  
 
            
Total liabilities and stockholders’ equity
   $ 40,325     $ 47,969  
 
            
 
                
Outstanding shares of common stock
     14,911,688       18,960,612  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 
    Twelve Months Ended September 30,  
    2009     2008  
    (Unaudited)     (Unaudited)  
Net cash (used in) provided by continuing operations:
                
Net cash provided by operating activities
   $ 5,453     $ 7,084  
Net cash used in investing activities
     (3,341 )     (750 )
Net cash (used in) provided by financing activities
     (8,989 )     1,475  
 
            
 
     (6,877 )     7,809  
 
                
Net cash provided by discontinued operations
     3,613       3,105  
 
                
 
            
Net (decrease) increase in cash and cash equivalents
   $ (3,264 )   $ 10,914  
 
            

 

 

 

TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
                                 
    Three Months Ended September 30,     Twelve Months Ended September 30,  
    2009     2008     2009     2008  
Revenues
                                
Net product sales
   $ 6,153     $ 6,763     $ 24,754     $ 45,933  
Service revenue
     6,092       4,740       22,440       20,221  
 
                        
Total revenue
     12,245       11,503       47,194       66,154  
 
                                
Cost of Sales
                                
Net product cost of sales
     4,422       4,691       18,270       31,805  
Service cost of sales
     2,605       2,197       9,953       9,817  
 
                        
Total cost of sales
     7,027       6,888       28,223       41,622  
 
                                
Gross margin
     5,218       4,615       18,971       24,532  
 
                                
Operating Expenses
                                
Engineering and development expenses
     1,128       1,112       4,783       5,171  
Selling and marketing expenses
     1,408       1,208       6,039       6,287  
General and administrative expenses
     1,286       1,718       6,118       7,409  
 
                        
Total operating expenses
     3,822       4,038       16,940       18,867  
 
                                
Income from operations
     1,396       577       2,031       5,665  
Other income, net
     90       148       319       436  
 
                        
Income from continuing operations before income taxes
     1,486       725       2,350       6,101  
Provision for income taxes
     52       —       65       —  
 
                        
Income from continuing operations
     1,434       725       2,285       6,101  
Loss from discontinued operations
     (22 )     —       (419 )     (7,480 )
 
                        
Net income (loss)
   $ 1,412     $ 725     $ 1,866     $ (1,379 )
 
                        
 
                                
Income (loss) per common share:
                                
Basic
                                
Continuing operations
   $ 0.09     $ 0.04     $ 0.13     $ 0.32  
Discontinued operations
     (0.00 )     —       (0.02 )     (0.39 )
 
                        
Net income
   $ 0.09     $ 0.04     $ 0.11     $ (0.07 )
 
                        
Diluted
                                
Continuing operations
   $ 0.09     $ 0.04     $ 0.13     $ 0.32  
Discontinued operations
     (0.00 )     —       (0.02 )     (0.39 )
 
                        
Net income
   $ 0.09     $ 0.04     $ 0.11     $ (0.07 )
 
                        
 
                                
Weighted average number of common shares outstanding:
                                
Basic
     14,900,353       19,128,215       17,125,601       19,145,132  
Diluted
     15,231,145       19,172,400       17,205,307       19,145,132  

 

 

 

Reconciliation of Non-GAAP Measures
We use income from continuing operations 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 September 30     Twelve Months Ended September 30,  
    2009     2008     2009     2008  
    (Unaudited)     (Unaudited)  
 
                                
Income from continuing operations
   $ 1,434     $ 725     $ 2,285     $ 6,101  
 
                                
Non-cash compensation
     210       352       1,384       1,705  
Depreciation and amortization
     280       184       1,071       674  
 
                                
 
                        
Income from continuing operations before non-cash items
   $ 1,924     $ 1,261     $ 4,740     $ 8,480  
 
                        
Income from continuing operations 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 income from continuing operations 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 loss determined in accordance with U.S. GAAP is the most complete measure available today to evaluate all elements of our performance.