AirIQ Inc.
TSX VENTURE : IQ

AirIQ Inc.

November 29, 2012 08:45 ET

AirIQ Announces Results for Quarter Ended September 30, 2012

TORONTO, ONTARIO--(Marketwire - Nov. 29, 2012) - AirIQ Inc. ("AirIQ") (TSX VENTURE:IQ), a supplier of wireless asset management services, today announced its financial results for the three months and six months ended September 30, 2012.

"The Company has continued its good start to the 2013 fiscal year," said Donald Gibbs, President and Chief Executive Officer of AirIQ. "We are pleased to report a modest sequential quarterly growth in revenues. It should be noted that this quarter encompasses the summer months which are seasonally the slowest for the company. From an operational perspective, compared to the previous quarter, the Company improved its gross profit percentage, kept expenses constant and improved its EBITDAS," continued Mr. Gibbs.

The main highlights for the quarter were as follows:

  • Second sequential quarter of increased revenue.
  • Second sequential quarter of improved gross profit percentage.
  • Expenses have remained level for the last two quarters.
  • EDITDAS loss improved from first quarter.

On June 27, 2012, the Company signed an agreement with a former customer for the settlement of a product liability claim filed in the District Court, East Central Judicial District in Fargo, North Dakota. Payment of the settlement amount pursuant to the settlement agreement was made in installments with final payment made subsequent to the quarter end on November 1, 2012. The parties have filed a stipulation for dismissal of the action, with prejudice. As security for the installment payments, the Company had granted a first security interest on its assets, which has now been released and discharged.

Subsequent to the quarter end, on November 13, 2012, the Company was successful in closing a previously announced $300 financing comprised of a $150 loan and a non-brokered private placement for gross proceeds of $150. In addition, the Company issued an additional 350,000 common shares in satisfaction of $28 of accrued directors' fees for annual non-executive Board compensation.

Financial Highlights
Three months Three months
ended ended
30-Sep-12 30-Sep-11
Total Revenue $ 580 $ 633
Gross Margin $ 402 $ 476
Gross Margin % 69.3 % 75.2 %
Net Income (loss) $ (96 ) $ (63 )
Net Income (loss) per share, basic and diluted $ (0.01 ) $ 0.00
EBITDAS* $ (54 ) $ (11 )
Cash from operating activities $ ($1 ) $ (110 )

*EBITDAS represents earnings before interest, tax, depreciation, amortization, shared-based compensation expense and the gain on business acquisition. The Company has included information concerning EBITDAS because it believes that it may be used by certain investors as one measure of the Company's financial performance. EBITDAS is not a measure of financial performance under IFRS and is not necessarily comparable to similarly titled measures used by other companies. EBITDAS should not be construed as an alternative to net income or to cash flows from operating activities (as determined in accordance with IFRS) or as a measure of liquidity.

Unless otherwise noted herein, and except share and per share amounts, all references to dollar amounts are in thousands of Canadian dollars.

Revenues for the three months ended September 30, 2012, decreased 9.1% to $580 from $633 for the three months ended September 30, 2011. Revenues for the six months ended September 30, 2012, decreased 8.0% to $1,157 from $1,250 for the six months ended September 30, 2011. Approximately 72.1% and 72.9% of the total revenue for the three and six month periods ended September 31, 2012 respectively, represents recurring revenue from the Company's airtime customers.

Overall, gross profit for the three months ended September 30, 2012 decreased by 18.4% to $402 and 13.4% to $791 for the six months ended September 30, 2012 compared to $476 and $897 for the three months and six months ended September 30, 2011.

Sales and marketing, research and development and general and administrative expenses totalled $466 and $939, respectively for the three months and six months ended September 30, 2012 compared to $504 and $1,052, respectively for the three months and six months ended September 30, 2011.

Expense reductions for the three months ended September 30, 2012 when compared to the three months ended September 30, 2011 were achieved in the following areas; a) wages and related expense reductions of approximately $39 due to the Company's restructuring initiatives and work sharing programs, b) legal fees of approximately $21 primarily related to the reduced legal costs due to the settlement of suits c) computer operating expense savings of approximately $9 due to the reduction of co-location expenses, d) consulting cost reductions of approximately $16 and, e) other cost reductions related to insurance, share based costs and other general and administrative costs of approximately $14. These savings were partially offset by increased public reporting costs of $7 and reductions recorded in contingent and tax liabilities recorded in the three month period ended September 30, 2011 of approximately $43 and $11 related to director fees which did not reoccur in the three month period ended September 30, 2012.

Expense reductions for the six months ended September 30, 2012 when compared to the six months ended September 30, 2011 were achieved in the following areas; a) wages and related expense reductions of approximately $80 due to the Company's restructuring initiatives and work sharing programs, b) legal fees of approximately $24 primarily related to the reduced legal costs due to the settlement of suits c) computer operating expense savings of approximately $14 due to the reduction of co-location expenses, d) consulting fee reductions of approximately $5 and, e) other cost reductions related to insurance, share based payments, director fees and other general and administrative costs of approximately $33. These savings were partially offset by reductions recorded in contingent and tax liabilities recorded in the three month period ended September 30, 2011 of approximately $43 which did not reoccur in the three month period ended September 30, 2012.

The Company's net loss from continuing operations for the three months and six months ended September 30, 2012 was $96 and $207, respectively, as compared to a net loss of $63 and $229, respectively, for the three months and six months ended September 30, 2011, an increase of $33 and a decrease of $22, respectively.

The Company's unaudited consolidated condensed interim financial statements as at and for the three months and six months ended September 30, 2012, including notes thereto, and the accompanying Management's Discussion and Analysis were filed with the Canadian securities regulatory authorities and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval website (www.sedar.com) on November 29, 2012.

About AirIQ

AirIQ currently trades on the TSX Venture Exchange under the symbol IQ. AirIQ's office is located in Pickering, Ontario, Canada. The Company offers a suite of location based services that generate recurring revenues from each device deployed. AirIQ delivers services to two primary markets: Commercial Fleets and dealers that service Consumer segments. AirIQ provides vehicle owners with the ability to monitor, manage and protect their mobile assets. Services include: instant vehicle locating, boundary notification, automated inventory reports, maintenance reminders, security alerts and vehicle disabling and unauthorized movement alerts. For additional information on AirIQ or its products and services, please visit the Company's website at www.airiq.com.

Forward-looking Statements

This news release contains forward-looking information based on management's best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "hope", "goal", "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including AirIQ's perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors, which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes may differ materially from those expressed in such forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of such information, future events or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • AirIQ Inc.
    Donald Gibbs
    President and Chief Executive Officer
    (905) 831-6444, Ext. 4255
    dgibbs@airiq.com