Tranzeo Wireless Technologies Inc.
TSX : TZT

Tranzeo Wireless Technologies Inc.

November 12, 2009 16:17 ET

Tranzeo Wireless Reports Third Quarter 2009 Results

PITT MEADOWS, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2009) - Tranzeo Wireless Technologies Inc. (TSX:TZT), a leading producer of high-speed wireless broadband communication systems, today announced its financial results for the third quarter 2009.

Financial Highlights:

- Revenue was $3.5 million compared with $4.4 million year over year and compared with $3.3 million in the prior quarter. The decrease in sales year over year was primarily due to reduced demand for our Wi-fi product line from the United States market which we attribute to the economic downturn. Our Wimax product line opportunity is gaining strength and ramping as we currently have a large backlog position for 2010.

- Tranzeo's current backlog position of all sales purchase orders for 2009 and 2010 is US$16.2M.

- Gross profit declined to $1.0 million from $1.4 million for 2008 which was the result of a decrease in sales.

- We reported a net loss of $0.7 million compared to a net loss of $0.1 million for 2008.

- EBITDA was a loss of $0.1 million, or $0.00 per share, for 2009, compared to a gain of $0.3 million, or $0.01 per share for 2008.

- The Company issued 4,078,570 Units at a price of $0.56 per Unit for total gross proceeds of $2,284,000.

Recent Developments:

- Received a US$5.4M purchase order from Aperto Networks to deliver Aperto-branded WiMAX subscriber units in 2010

- Received a US$5.4M purchase order for the first volume production order of WiMAX subscriber units targeted for Indonesian Operators in 2010

- Received a US$3.4M purchase for WiMAX OEM-branded WimAX subscriber units. Shipments are to start Q1 of 2010

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipate", "plan", "expect", "believe", "intend" and similar expressions to identify forward-looking statements that relate to our business, management, operating results and financial condition. These statements are not historical facts, but reflect our current expectations regarding future results or events. In particularly, purchase orders are not binding purchase agreements and as such are subject to counter-party risk. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risk Factors" and other sections of our Annual Information Form and MD&A and in other filings which may be found on SEDAR at www.sedar.com.

About Tranzeo

At the forefront of the growing fixed wireless industry, Tranzeo Wireless Technologies Inc. (TSX:TZT) designs, builds and distributes a full range of high-bandwidth wireless data network products, including WiMax products. Our innovative approach and in-house expertise ensures our products are reliable yet affordable, offer state-of-the-art features, and are easy to install, operate and deploy. We are continually adding products and features to provide our customers with the latest available innovations and end-to-end fixed wireless solutions, through a growing global network of distributors. For more information about our company and our products, visit www.tranzeo.com.



TRANZEO WIRELESS TECHNOLOGIES INC.

Interim Consolidated Balance Sheet

--------------------------------------------------------------------------
Sept 30, 2009 Dec. 31, 2008
(Unaudited)
------------------------------

Assets
Current assets:
Accounts receivable $ 3,812,561 $ 3,289,007
Prepaid expenses 588,541 768,822
Inventories 4,312,379 6,786,039
------------------------------
8,713,481 10,843,868

Property plant, and equipment 10,568,072 11,482,421
Deferred development costs 7,347,392 5,945,883
Future income taxes 3,332,112 2,533,191
------------------------------
$ 29,961,057 $ 30,805,363
------------------------------
------------------------------

Liabilities and Shareholders' Equity
Current Liabilities:
Bank Indebtedness $ 2,923,847 $ 3,116,276
Accounts payable and accrued liabilities 3,636,712 4,835,195
Equipment Loan 70,800 84,960
Due from Related Party 223,421 -
Short Term Note Payable - 2,000,000
Current portion of capital lease 736,218 998,169
------------------------------
7,590,998 11,034,600
Capital lease obligation 101,494 644,858
------------------------------
7,692,492 11,679,458
------------------------------

Shareholders' equity:
Share Capital 22,308,553 17,525,344
Contributed Surplus 1,331,892 1,015,298
Retained Earnings (deficit) (1,371,880) 585,263
------------------------------
22,268,565 19,125,905
------------------------------
$ 29,961,057 $ 30,805,363
------------------------------
------------------------------


TRANZEO WIRELESS TECHNOLOGIES INC.
Interim Consolidated Statements of Operations and Deficit
(Unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
--------------------------------------------------------
Sales $ 3,454,507 $ 4,414,293 $ 9,954,917 $ 16,179,099
Cost of goods
sold 2,427,303 2,982,826 6,949,575 10,777,152
------------ ------------ ------------ -------------
Gross Profit 1,027,204 1,431,467 3,005,342 5,401,947
------------ ------------ ------------ -------------

Expenses
Sales and
marketing 407,071 501,077 1,095,782 1,635,353
Research and
development
- amortization of
deferred costs 359,618 96,350 954,122 238,550
General and
administrative 682,426 629,500 2,066,410 1,982,015
Share based
compensation 129,073 - 169,299 -
Amortization 316,566 230,895 949,338 649,514
------------ ------------ ------------ -------------
1,894,754 1,457,822 5,234,951 4,505,432
------------ ------------ ------------ -------------

Earnings (Loss)
from operations (867,550) (26,355) (2,229,609) 896,515

Other expenses
Interest Expense 92,046 163,466 482,006 419,754
Foreign exchange
loss 13,195 23,065 11,744 18,877
------------ ------------ ------------ -------------
105,241 186,531 493,750 438,631
------------ ------------ ------------ -------------

Earnings (Loss)
before income taxes (972,791) (212,886) (2,723,359) 457,884

Income taxes
(recovery) (253,115) (67,059) (766,216) 144,233
------------ ------------ ------------ -------------

Net earnings (Loss) (719,676) (145,827) (1,957,143) 313,651

Retained earnings
(deficit), beginning
of period (652,204) 2,843,457 585,263 2,383,979
------------ ------------ ------------ -------------

Retained earnings
(deficit), end of
period $ (1,371,880) $ 2,697,630 $ (1,371,880) $ 2,697,630
------------ ------------ ------------ -------------
------------ ------------ ------------ -------------

Earnings (loss)
per share for
the period
Basic $ (.02) $ (.01) $ (.07) $ .01
Diluted $ (.02) $ - $ (.07) $ .01
------------ ------------ ------------ -------------

Weighted average
number of shares
- basic 34,005,433 26,284,405 29,256,393 26,284,405


TRANZEO WIRELESS TECHNOLOGIES INC.
Interim Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
--------------------------------------------------------
Cash flows from
operating
activities:
Net income (loss)
for the period $ (719,676) $ (145,827) $ (1,957,143) $ 313,651
Adjustments to
reconcile net
loss to net
cash from
operating
activities:
Amortization 316,566 230,895 949,338 649,514
Amortization of
deferred
developments costs 359,618 96,350 954,122 238,550
Interest on
capital leases 28,113 60,128 69,788 185,271
Future income
taxes (recovery) (253,115) (67,059) (766,216) 144,233
Stock based
compensation 129,073 - 169,299 -
------------ ------------ ------------ -------------
(139,421) 174,487 (580,812) 1,531,219

Changes in working
capital assets
and liabilities:
Prepaid expenses 108,154 (69,598) 180,281 (172,178)
Accounts receivable (372,248) 579,430 (523,556) (1,865,329)
Accounts payable
and accrued
liabilities (3,883,877) (2,735,740) (3,443,934) (1,461,980)
Inventories 3,090,924 2,886,156 4,719,111 1,934,612
------------ ------------ ------------ -------------
Net cash flows
from (used) in
operating
activities (1,196,468) 834,735 351,090 (33,656)
------------ ------------ ------------ -------------

Cash flows from
investing activities
Additions to
property, plant
and equipment (58,408) (147,481) (172,598) (923,824)
Deferred development
expenses (510,639) (993,396) (2,103,430) (2,988,178)
------------ ------------ ------------ -------------
Net cash flows used
in investing
activities (569,047) (1,140,877) (2,276,028) (3,912,002)
------------ ------------ ------------ -------------

Cash flows from
financing activities:
Bank indebtedness (565,059) 617,628 (192,429) 2,661,773
Repayment of
capital leases
obligation (274,223) (306,643) (875,103) (963,966)
Repayment of
equipment loan (4,720) (4,843) (14,160) (4,720)
Repayment of short
term note payable - - (2,000,000) -
Proceeds from short
term note payable - - - 2,000,000
Proceeds from
related party 223,421 - 223,421 -
Proceeds from
equipment loan - - - 94,400
Share options
exercised 184,250 - 184,250 -
Issuance of
common shares net 2,201,846 - 4,598,959 -
------------ ------------ ------------ -------------
Net cash flows
from financing
activities 1,765,515 306,142 1,924,938 3,787,487
------------ ------------ ------------ -------------

Net increase
(decrease) in
cash - - - (168,171)

Cash, beginning
of period - - - 168,171
------------ ------------ ------------ -------------

Cash, end of
period - - - -
------------ ------------ ------------ -------------

Supplementary cash
information

Cash paid for
interest $ 92,046 $ 163,466 $ 482,006 $ 419,754


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