Intermap Technologies Corporation
TSX : IMP

Intermap Technologies Corporation

August 11, 2005 07:00 ET

Intermap Reports 2005 Second Quarter Financial Results

CALGARY, ALBERTA--(CCNMatthews - Aug. 11, 2005) - Intermap Technologies Corporation (the "Company") (TSX:IMP), today reported second quarter financial results for the three and six month periods ended June 30, 2005. The Company has historically prepared its consolidated financial statements in Canadian dollars. As a result of the continued expansion of the Company's U.S. operations, a significant and growing U.S. customer base, and because the majority of its global revenue and assets are denominated in U.S. dollars, the Company has elected to adopt the U.S. dollar as its reporting currency effective January 1, 2005. The financial information for all periods have been translated into the new reporting currency. All amounts in this news release are in U.S. dollars unless otherwise noted.

Total revenues for the quarter ended June 30, 2005, were $3.8 million as compared to revenues of $5.2 million in the second quarter of 2004. The Company had expected to record an additional $2.3 million in contract service revenue during the second quarter of 2005 from its largest customer (the United States Government), but delays in the contracting process caused revenue recognition to be postponed until July 2005 of the Company's third quarter. Work on this contract was completed prior to the end of the second quarter 2005.

Total contract services revenue in the second quarter was $2.8 million, compared to $4.5 million in the second quarter of 2004. License revenues from sales of the Company's NEXTMap database during the quarter were $934,000, an increase compared to $781,000 for the second quarter of 2004. Intermap reported a net loss for the quarter of $1.9 million, or ($0.11) per share, as compared to net income of $58,000, or $0.00 per share in the second quarter of 2004.

"Quarter over quarter, revenues show a strong uptrend that we expect to see continue for the remainder of the year. Recent announcements of key sales together with near term opportunities for the Company lead us to expect continued improvement in financial results during the third quarter. Further, the projected increase in contract services work during the last half of 2005 is expected to create positive operating cash flow for the remainder of the year" commented Brian Bullock, President and CEO of Intermap.

Significant investment was made into building the Company's NEXTMap database. During the quarter, the Company completed acquisition and processing of approximately 300,000 square kilometers of data for its NEXTMap USA program which set a new record of NEXTMap data completed in a single quarter. The NEXTMap USA collection was predominantly in California, but data was also acquired in Alabama, Louisiana, Florida, Arizona and Michigan. The states of California, Florida and Mississippi are now substantially complete. Large portions of NEXTMap data for these states are currently available and sales in these regions have already begun.

Cash and cash equivalents at June 30, 2005, were $2.6 million, as compared with $3.6 million at December 31, 2004. At June 30, 2005, the Company's working capital was $3.9 million compared with $5.0 million at December 31, 2004. In the first quarter of 2005, the Company signed a commitment letter with a Canadian financial institution to provide $1.7 million of asset based financing on two of its aircraft. The loan was completed and funded during the second week of August 2005.

At the end of the second quarter, the Company had invested more than $15 million into NEXTMap USA, collecting data covering more than 1 million square kilometers of the continental United States. Intermap embarked on NEXTMap USA in 2004 to generate a national U.S. terrain elevation and imagery database accurate to one meter or better. The Company continues to work with commercial and government customers to co-sponsor the development of the NEXTMap USA database. Improvements in technology and processes have continued to reduce costs of production for NEXTMap USA. These improvements, coupled with better weather conditions during the quarter, led to even a lower cost per square kilometer than recorded during the first quarter. The Company has now reduced the costs per square kilometer by more than 65% when compared with the costs of previously completed NEXTMap Britain. Continued cost reductions are expected throughout the remainder of 2005.

Intermap's NEXTMap business model is based on building archived databases of complete national digital elevation and terrain maps, then licensing the data to multiple customers for varied applications. NEXTMap revenues partially offset declines in contract services revenue, and are expected to eventually make up the majority of Intermap's revenues.

Funding the build out of the NEXTMap database is partially provided by the Company's contract services work. As Intermap continues the transition of its business model, deriving an increasing portion of its revenues through NEXTMap data license sales, the Company expects more consistent and predictable revenues than from its past traditional contract services model.

"Our progress on funding NEXTMap USA has been excellent. Enthusiasm among our U.S. customers continues to grow. We have previously announced that a customer has committed to purchase the entire coastline of the U.S. for $5.5 million over a period of four years, subject to annual funding. In addition, before the end of this year, we expect to close at least two national subscriptions for the purchase of the entire NEXTMap USA. Revenue and cash flow from these subscriptions will be recognized throughout the completion of the project based on annual approved budget plans. Successfully closing these large contracts, together with the currently closed contracts, are expected to fund more than one-third of the entire cost of the NEXTMap USA program" commented Mr. Bullock.

The automotive sector has taken a significant interest in the NEXTMap database potential for three dimensional road data. 3D roads support several areas in the emerging market for Intelligent Transportation Systems (ITS) and active safety in the automotive sector. Since the start of the second quarter, Intermap management has met with more than 30 companies involved within the ITS market, including tier one automotive suppliers and manufacturers. The industry is showing increasing interest and an increase in future technology funding within this space is expected.

"The positive reaction we have been receiving from the automotive industry is encouraging," explained Mr. Bullock. "Our data meets the industry's accuracy requirements and we have begun to collect blocks of data for testing with potential partners within the sector. Our immediate objective is to provide blocks of 3D road data in critical areas to automotive companies that will commit to use the data in the development of active safety technologies under a cooperative development agreement."

Conference Call

A conference call to review the results will take place today, August 11, at 10:00am., ET (8:00am MT). Brian Bullock, President and CEO and Richard Mohr, CFO will speak on behalf of the Company. A question-and-answer period will follow a review of the financial results and update on the Company's strategies and progress on its NEXTMap business model. Detailed financial results for the quarter and management's discussion and analysis can be found on SEDAR, at www.sedar.com.

To participate in the call, please dial 416-695-7896 or 1-888-280-8277 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through August 18. Please dial 416-695-5275 or 1-888-509-0081 to listen to the rebroadcast. After this date, the recorded call will be available at www.intermap.com.

About Intermap

Intermap is digitally remapping entire countries, building unprecedented national databases, called NEXTMap, of highly accurate digital topographic maps (including elevation). Customers purchase Intermap's high-quality, low-cost data to facilitate better decision-making for numerous commercial, government, military and consumer applications.

Demand for NEXTMap data is growing as new commercial applications are emerging, including geographical information systems (GIS), engineering planning, transportation, automotive, navigation, flood modeling, irrigation, environmental management and planning, telecommunications network planning, aviation, simulation and 3D visualization. Internet applications include virtual tours, topographic maps and computer games. The products are also used to add interactive intelligence to airborne and satellite images.

Headquartered in Denver, Colorado, Intermap employs more than 280 people worldwide, with offices in Calgary, Ottawa, Munich and Jakarta. Intermap is publicly traded on the TSX under the symbol IMP. For more information, visit www.intermap.com.

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Intermap's control, including: the impact of general economic conditions, industry conditions, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to the announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Intermap's actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceed, that Intermap will derive therefrom.



INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Operations and Deficit
(In thousands of United States dollars, except per share information)
------------------------------------------------------------------------
------------------------------------------------------------------------
3 months 3 months 6 months 6 months
ended ended ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Revenue:
Contract services $ 2,841 $ 4,458 $ 3,678 $ 8,008
Multi-client data
licenses 934 781 1,886 1,980
------------------------------------------------------------------------
3,775 5,239 5,564 9,988
Operating costs:
Cost of services 1,513 1,852 2,128 3,870
Research and
development 553 272 814 510
Sales, general and
administration 2,559 2,425 4,792 4,720
Depreciation of
property and
equipment 840 452 1,635 1,001
Amortization of
multi-client data
library 245 207 596 370
------------------------------------------------------------------------
5,710 5,208 9,965 10,471

------------------------------------------------------------------------
Income (loss) before
interest and income
taxes (1,935) 31 (4,401) (483)

Interest expense (35) (27) (87) (95)
Interest income 28 61 39 78

------------------------------------------------------------------------
Income (loss) before
income taxes (1,942) 65 (4,449) (500)

Income taxes - current - 7 - 29
------------------------------------------------------------------------
Net income (loss) (1,942) 58 (4,449) (529)

Deficit, beginning of
period:
As previously reported (14,596) (8,231) (12,089) (7,152)
Adjustment to reflect
the change in
accounting for
stock-based
compensation - - - (492)
------------------------------------------------------------------------
As restated (14,596) (8,231) (12,089) (7,644)

------------------------------------------------------------------------
Deficit, end of
period $ (16,538) $ (8,173) $ (16,538) $ (8,173)
------------------------------------------------------------------------
------------------------------------------------------------------------

Income (loss) per share:
Basic $ (0.11) $ 0.00 $ (0.26) $ (0.04)
Fully diluted (0.11) 0.00 (0.26) (0.04)
------------------------------------------------------------------------
------------------------------------------------------------------------



Intermap Technologies Corporation
Consolidated Balance Sheets
(In thousands of United States dollars)
------------------------------------------------------------------------
------------------------------------------------------------------------
June 30, 2005 December 31, 2004
------------------------------------------------------------------------
Assets (unaudited)

Current assets:
Cash and cash equivalents $ 2,606 $ 3,581
Amounts receivable 2,169 3,686
Unbilled revenue 2,072 900
Prepaid expenses 421 405
------------------------------------------------------------------------
7,268 8,572
Property and equipment 14,736 15,867
Multi-client data library 17,252 11,499
Future income taxes 18 18
Long-term investments 313 403
------------------------------------------------------------------------
$ 39,587 $ 36,359
------------------------------------------------------------------------
------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,499 $ 2,880
Deferred lease inducements 134 126
Deferred revenue 169 52
Current portion of obligations under
capital lease 214 308
Current portion of long-term debt 327 200
------------------------------------------------------------------------
3,343 3,566
Deferred lease inducements 252 332
Obligations under capital lease 241 346
Long-term debt 489 367
Non-controlling interest 14 14
------------------------------------------------------------------------
4,339 4,625

Shareholders' equity:
Share capital 46,102 37,672
Contributed surplus 1,398 1,085
Deficit (16,538) (12,089)
Cumulative translation adjustment 4,286 5,066
------------------------------------------------------------------------
35,248 31,734
------------------------------------------------------------------------
$ 39,587 $ 36,359
------------------------------------------------------------------------
------------------------------------------------------------------------


INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Cash Flows
(In thousands of United States dollars)

------------------------------------------------------------------------
------------------------------------------------------------------------
3 months 3 months 6 months 6 months
ended ended ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)

Cash and cash equivalents
provided by (used in):

Operations:
Net income (loss) $ (1,942) $ 58 $ (4,449) $ (529)
Items not involving
cash:
Depreciation of
property and
equipment 840 452 1,635 1,001
Amortization of
multi-client data
library 245 207 596 370
Amortization of deferred
financing charges - - - 1
Compensation expense 112 120 244 190
Deferred lease
inducements (33) - (66) -
Change in non-cash
operating working
capital (1,396) (2,776) 64 (1,335)
------------------------------------------------------------------------
(2,174) (1,939) (1,976) (302)
------------------------------------------------------------------------

Financing:
Proceeds from issuance
of common shares 30 453 8,671 16,682
Security issuance costs (18) (2) (174) (1,086)
Repayment of long-term
debt (80) (1,220) (151) (1,323)
Proceeds of long-term
debt - - 400 -
Repayment of obligations
under capital lease (83) (81) (199) (154)
Repayments of bank loan - - - (894)
------------------------------------------------------------------------
(151) (850) 8,547 13,225
------------------------------------------------------------------------

Investments:
Purchase of property
and equipment (705) (1,528) (1,564) (2,856)
Investment in
multi-client data
library (2,907) (1,306) (5,773) (2,447)
Proceeds on disposal of
long-term investment 40 44 81 90
------------------------------------------------------------------------
(3,572) (2,790) (7,256) (5,213)
------------------------------------------------------------------------

------------------------------------------------------------------------
Effect of foreign
exchange rate on cash (172) (358) (290) (317)
------------------------------------------------------------------------

Increase (decrease) in
cash and cash
equivalents (6,069) (5,937) (975) 7,393

Cash and cash
equivalents, beginning
of period 8,675 14,527 3,581 1,197

------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 2,606 $ 8,590 $ 2,606 $ 8,590
------------------------------------------------------------------------
------------------------------------------------------------------------

Supplemental cash flow
information:
Interest paid $ 36 $ 39 $ 87 $ 107
------------------------------------------------------------------------
------------------------------------------------------------------------


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