GPS Industries, Inc.
OTC Bulletin Board : GPSN

GPS Industries, Inc.

April 17, 2007 06:31 ET

GPS Industries Reports Double-Digit Revenue Growth in 2006

Fiscal Highlights Include the Elimination of Debt and Capital Infusion of More Than $15.7-Million Trends on Revenues and Expenses Support Management Expectations to Attain Positive Cash Flow

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 17, 2007) - GPS Industries, Inc (GPSI) (OTCBB:GPSN), the only provider of Wi-Fi powered, advertising enhanced GPS systems for golf facilities, resorts and residential communities, today announced that as reported in its Form 10KSB filed with the Securities and Exchange Commission, operating trends continue to support management expectations to achieve record sales growth in 2007 and exiting the fiscal year with positive cash flow.

"We are pleased to affirm that 2006 has set the stage for achieving positive cash flow in 2007," commented GPSI's President and Chief Executive Officer, Robert Silzer, Sr. "Sales of our patented Inforemer Golf Management System has gained tremendous momentum. Our international divisions are achieving new benchmarks, particularly in Europe. Our marketing efforts in North America are resulting in higher awareness levels and with expanded representation now in key US markets we're developing the most robust sales pipeline in the industry."

Under the terms of an agreement reached Q4, the Company received a capital investment of $15.7 Million aggregate from: Greg Norman's Great White Shark Enterprises (GWSE); and Leisurecorp LLC (Leisurecorp), part of the Istithmar group. Based in the United Arab Emirates, Istithmar is an alternative investment house owned 100 percent by Dubai World, which is in turn wholly owned by the Government of Dubai. The $15.7-million investment in GPSI was made through the purchase of 1,574,089 newly issued Series B convertible preferred shares and related warrants. In connection with their investment, GWSE and Leisurecorp also received the right to invest an additional $13 Million in GPSI within 120 days of their original investment.

In a related transaction, certain Officers and Directors of the Company agreed to convert $3.7 Million of outstanding short-term obligations in exchange for common and preferred stock of the Company.

A portion of the investment funds were used to redeem outstanding convertible debentures that were issued to entities affiliated with N.I.R. Group, LLC. Accordingly, all financial obligations under such debentures have now been extinguished. The net effect of these transactions is the removal of more than $9-million in derivative liabilities off the balance sheet and the virtual elimination of the Company's long-term debt.

For the fiscal year ended December 31, 2006, the Company recorded total revenue of $6.6 million, compared to $5.8 million reported for the twelve months ended December 31, 2005. This 13% increase in revenue is primarily attributable to a 16% increase in the number of sales and installations of the Company's Inforemer technology. The improvement over fiscal 2005 reflects the Company's increased marketing and sales efforts and the growing reputation of the Inforemer system.

Cost of goods sold remained substantially the same in fiscal 2006 as in fiscal 2005. However, as a percentage of revenues, cost of goods sold decreased from 59% to 52% year over year due to enhanced efficiencies in manufacturing and due to improvements made throughout the installation procedures. Selling and marketing expenses were higher in fiscal 2006, largely as a result of a more powerful marketing push that substantially increased the Company's promotional activities, including heightened visibility at trade shows and industry events. Also impacting these costs was the expansion of the Company's sales force.

Operations, engineering, research and development expenses in fiscal 2006 increased by $1.2 million over fiscal 2005. This was attributable to major development projects to optimize the Inforemer system. These efforts resulted in major improvements to the Company's golf management technology, including an upgrade in computing power, enhanced visual appearance, and the ability of the units to broadcast full motion video and stereo sound.

"We continue to anticipate that our revenues will increase dramatically in the current fiscal year," added Silzer "Clearly our revenue in '06 was up, our cost-of-goods was down, and we reduced general and administrative expenses significantly, from 88% in 2005 to 72% in 2006."

Mr. Silzer continued, "The line items showing an increased from 2005 to 2006 actually reflect our forward momentum, with some costs up as a consequence of amplified marketing efforts that netted key strategic alliances with major organizations such as PGA Magazine and the NGCOA. Along similar lines, our R&D costs did indeed rise, but that investment has quickly paid off with some remarkable enhancements that further our technological advantage in the marketplace."

"Ultimately," concluded Silzer, "when you combine our product development and marketing gains with the elimination of long-term debt and a substantial cash infusion, it is clear we are ideally positioned for tremendous performance in 2007 and beyond."

About GPS Industries (GPSI)

GPS Industries, Inc. (OTCBB:GPSN) is a technology solutions provider whose customizable, patent-protected applications in GPS and Wi-Fi software and hardware offer superior return on investment in the vertical markets of golf course management and residential community development. In the golf industry vertical, the Company's INFOREMER-HD™ GPS System features an integrated Wi-Fi communications network, award-winning display units delivering the most powerful on-course advertising opportunities in the golf industry, and a comprehensive suite of software applications that empower course management to control expenses and maximize revenues throughout all aspects of course operations. In the community development vertical market, the Company's WiStream applications provide developers with uniquely powerful, community-wide turnkey wireless ISP, asset tracking, security, communications and property sales technology solutions. GPSI owns key patents for these and other GPS and Differential GPS (DGPS) applications in fifteen countries worldwide, including the United States, Australia, Great Britain and Japan. For additional information, please visit: www.gpsindustries.com, www.wistream.com and www.gpsifireattheflag.com.

Forward-Looking Statements

Some statements contained in this release may be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Editors and investors are cautioned that such forward-looking statements involve risks and uncertainties that may cause the company's actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to, the company's ability to generate revenues and other factors as described in the Company's literature and filings with the Securities and Exchange Commission.

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