AirIQ Inc.

TSX VENTURE : IQ


AirIQ Inc.

August 27, 2012 16:45 ET

AirIQ Announces Results for Quarter Ended June 30, 2012 Reports Positive Cash Flow from Operations

TORONTO, ONTARIO--(Marketwire - Aug. 27, 2012) - AirIQ Inc. ("AirIQ") (TSX VENTURE:IQ), a supplier of wireless asset management services, today announced its financial results for the three months ended June 30, 2012.

"The Company had a very good start to the 2013 fiscal year," said Donald Gibbs, President and Chief Executive Officer of AirIQ. "We are pleased to report a 14.5% sequential quarterly growth in revenues. However, our reported results were reduced by revenue of our hardware devices going into the deferred pools which exceeded that being recognized in the quarter from prior periods. From an operational perspective, the level of sales activity and the quality of the Company's sales pipeline is the best the Company has seen in many years," continued Mr. Gibbs.

The main highlights for the quarter were as follows:

  1. Achieved positive cash flow from operating activities during the quarter of $67;
  2. Shipped more units in the first quarter of 2012 than any other quarter since June of 2008;
  3. Successfully integrated a third party's solution for a new oil and gas customer;
  4. Shipped units into the "Buy-Here-Pay-Here" market were the highest since re-entering the market in January of 2012; and
  5. Recurring revenue for the quarter was 73%.
Financial Highlights
Three months Three months
ended ended
30-Jun-12 30-Jun-11
Total Revenue $ 577 $ 617
Gross Margin $ 389 $ 421
Gross Margin % 67.4 % 68.2 %
Net Income (loss) $ (111 ) $ (166 )
Net Income (loss) per share, basic and diluted $ 0.00 $ 0.00
EBITDAS* $ (67 ) $ (108 )
Cash from operating activities $ 67 $ (601 )

* 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 June 30, 2012, decreased 6% to $577 from $617 for the three months ended June 30, 2011. Approximately 73% of the total revenue for the period represents recurring revenue from the Company's airtime customers.

Overall, gross profit decreased by 8% to $389 for the three months ended June 30, 2012 compared to $421 for the three months ended June 30, 2011.

Sales and marketing, research and development and general and administrative expenses totalled $474 for the three months ended June 30, 2012 compared to $547 for the three months ended June 30, 2011.

Expense reductions for the three months ended June 30, 2012 when compared to the three months ended June 30, 2011 were achieved in the following areas; a) wages and related expense reductions of approximately $40 due to the Company's restructuring initiatives and work sharing programs, b) legal fees of approximately $1 primarily related to the reduced legal costs due to the settlement of suits c) computer operating expense savings of approximately $3 due to the reduction of co-location expenses and, d) other cost reductions of approximately $38 related to audit fees, director fees, share based payment and other costs. These savings were partially offset by an increase in consulting fee expenses of approximately $11.

The Company's net loss from continuing operations for the three months ended June 30, 2012 was $111, as compared to a net loss of $166 for the three months ended June 30, 2011, an improvement of $55.

The Company's unaudited consolidated condensed interim financial statements as at and for the three months ended June 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 August 28, 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.

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