SOURCE: Remote Dynamics

March 25, 2008 07:30 ET

Remote Dynamics Reports 2007 Financial Results

Units in Service Increase

PLANO, TX--(Marketwire - March 25, 2008) - Remote Dynamics (OTCBB: RDYM) (www.remotedynamics.com), a provider of asset tracking and fleet management solutions, reports its financial results for 2007.

Gary Hallgren, Chief Executive Officer of Remote Dynamics, said, "The Company made a significant amount of progress this year as we continued to implement the transition plan that we started in late 2006. Although, because of this transition and our reverse merger accounting, it is difficult to make year-over-year comparisons, we believe our results demonstrate the strength of our business and the quality of our operations.

"In 2007, we completed a significant cost and operational-based restructuring with the objective of making our business self-supporting and eventually profitable. The restructuring included rightsizing our workforce, clearing away non-critical expenses, reducing debt from our legacy business, and developing a sales and marketing strategy to accelerate unit sales and subscriber growth. We are now focused on expanding our footprint in the industry and gaining significant traction in this marketplace."

Mr. Hallgren concluded: "The REDIview product line will provide the foundation for our revenue growth in the coming year and we expect to enhance the product line by adding new functionality in the areas of dispatching, security, and maintenance. We also will remain focused on increasing units in service and revenue, while improving financial results."

Highlights for 2007 include:

--  Revenue reached $4.7 million
--  Gross profit was $3.0 million
--  Gross profit margin was 63%
--  Transformed sales team with a new emphasis on providing solutions to
    customers and delivering new revenue to the company
--  Increased REDIview units in service by 18% to 9,500+ at year-end
--  Adjusted EBITDA (a non-GAAP financial measure) improved in the second
    half of the year
    

Non-GAAP Financial Measures

See Adjusted EBITDA Presentation below for a definition of Adjusted EBITDA and a reconciliation to the most comparable GAAP financial measure.

Status of Secured Convertible Notes and Liquidity

Subsequent to the end of the year, Remote Dynamics announced that approximately $2,669,891 in principal amount of its outstanding secured convertible notes have reached their maturity date and are due and payable. In addition, the Company is not in compliance with certain of its other obligations relating to its secured convertible notes. The failure to comply with the obligations relating to these securities exposes the Company to demands for immediate repayment (in some cases, at a premium to outstanding principal) as well as default interest and liquidated damages claims by the security holders.

Mr. Hallgren said: "Our liquidity situation remains challenging. We plan to continue to explore alternatives to restructure or otherwise satisfy our obligations to our note holders. However, we do not currently have the cash on hand to repay amounts due under the notes if the holders elect to exercise their remedies."

As part of its efforts to restructure and satisfy its note holder obligations, the Company previously announced that:

--  Holders of $1.5 million in principal amount of its secured convertible
    notes agreed to extend the principal payment schedule and maturity date of
    the notes from February 23, 2008 until August 31, 2009.
--  The Company resumed making payments to certain of its note holders of
    amounts due under the notes in the form of common stock. An initial payment
    was made in March 2008 in the form of 7.8 million shares of the Company's
    common stock in satisfaction of $172,595 of obligations due under the
    notes.
    

About REDIview

REDIview provides users with business critical information such as vehicle speeding and idling for safety and fuel conservation. It reports current status and asset utilization enabling cost analysis reports for all aspects of the deployment. REDIview offers traditional asset management combined with a robust maintenance module, a strong reporting engine and integration tools. More information on REDIview is available online at http://www.remotedynamics.com.

About Remote Dynamics, Inc.

Remote Dynamics, Inc. markets, sells and supports a state-of-the-art asset tracking and fleet management solution that contributes to higher customer revenues, enhanced operator efficiency and improved cost control. Combining the technologies of the global positioning system (GPS) and wireless technologies, the company's solution improves our customers' operating efficiencies through real-time status information, exception-based reporting, and historical analysis. The company is based in Plano, Texas. More information about Remote Dynamics is available online at http://www.remotedynamics.com.

Safe Harbor Statement

Some of the information in this letter may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that these statements involve risks and uncertainties and actual events or results may differ materially. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are general market conditions, unfavorable economic conditions, our ability to execute our business strategy, the effectiveness of our sales team and approach, our ability to target, analyze and forecast the revenue to be derived from a client and the costs associated with providing services to that client, the date during the course of a calendar year that a new client is acquired, the length of the integration cycle for new clients and the timing of revenues and costs associated therewith, potential competition in the marketplace, the ability to attract and retain employees, our ability to maintain our existing technology platform and to deploy new technology, our ability to sign new clients and control expenses, and other factors detailed in the Company's filings with the Securities and Exchange Commission, including our recent filings on Forms 10-KSB and 10-QSB.

                  REMOTE DYNAMICS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)

                                                             Year ended
                                                            December 31,
                                                            2007     2006
                                                          -------  -------
Revenues
  Service                                                 $ 3,176  $   286
  Ratable product                                           1,385      234
  Product                                                     160      144
                                                          -------  -------
     Total revenues                                         4,721      663
                                                          -------  -------

Cost of revenues
  Service                                                   1,245      229
  Ratable product                                             330      118
  Product                                                     186      294
                                                          -------  -------
     Total cost of revenues                                 1,761      641
                                                          -------  -------
Gross profit                                                2,960       22
                                                          -------  -------
Expenses:

  General and administrative                                1,766      495
  Sales and marketing                                         774      317
  Engineering                                                 719       83
  Depreciation and amortization                               949      184
  Goodwill impairment                                           -      411
                                                          -------  -------
     Total expenses                                         4,208    1,490
                                                          -------  -------
     Operating loss                                        (1,248)  (1,468)

Other income (expenses):

Interest income                                               105       21
Interest expense                                           (4,757)    (680)
Other income                                                  383        -
Loss on extinguishment of debt                               (341)    (558)
Loss on extinguishment of redeemable preferred stock         (363)    (121)
                                                          -------  -------
     Total other income (expenses)                         (4,973)  (1,338)
                                                          -------  -------
     Loss before income taxes                              (6,221)  (2,806)

Income tax benefit                                              -        -
                                                          -------  -------
     Net loss                                              (6,221)  (2,806)
                                                          =======  =======

Net loss per common share - basic and diluted             $ (4.70) $ (6.71)
                                                          =======  =======

Weighted average number of common shares outstanding:
   Basic and diluted                                        1,325      418
                                                          -------  -------


                  REMOTE DYNAMICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                   (in thousands, except share amounts)

                                                   December     December
                                                     31,          31,
                                                     2007         2006
                                                 -----------  -----------
                      ASSETS
Current assets:
  Cash and cash equivalents                      $       228  $       121
  Accounts receivable, net of allowance for
   doubtful accounts of $54 and $67,
   respectively                                          526          534
  Due from related parties                                71            -
  Inventories, net of reserve for obsolescence
   of $7 and $112, respectively                          158          287
  Deferred product costs - current portion               352          157
  Lease receivables and other current assets,
   net                                                   466          414
                                                 -----------  -----------
     Total current assets                              1,801        1,512

Property and equipment, net of accumulated
 depreciation and amortization of $154 and $112,
 respectively                                            157          371
Deferred product costs - non-current portion             336          154
Goodwill                                                 616          616
Customer Lists, net                                    2,162        2,714
Software, net                                            674          846
Tradenames, net                                           59           74
License right, net                                         -           57
Deferred financing fees, net                             191          165
Lease receivables and other assets, net                  135          352
                                                 -----------  -----------
     Total assets                                $     6,131  $     6,861
                                                 ===========  ===========

    LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                               $     1,530  $     1,386
  Accounts payable - related parties                      75           55
  Deferred product revenues - current portion          1,197        1,035
  Series A convertible notes payable (net of
   discount of $392 and $3,193, respectively)          3,801        1,242
  Series B convertible notes payable (net of
   discount of $1,543 and $113, respectively)          5,007          189
  Note payable - HFS (net of discount of $1,716)           -          284
  Note payable - related parties                         250          250
  Accrued expenses and other current liabilities       1,770        1,701
  Accrued expenses and other current liabilities
   - related parties                                      60           36
                                                 -----------  -----------
     Total current liabilities                        13,690        6,178

Deferred product revenues - non-current portion          590          894
Capital leases, less current portion                      11           79
Series B convertible notes payable - non-current
 (net of discount of $0 and $906, respectively)            -        1,509
Other non-current liabilities                             99          321
                                                 -----------  -----------
     Total liabilities                                14,390        8,981
                                                 -----------  -----------
Commitments and contingencies

Redeemable Preferred Stock - Series B (3% when
 declared, $10,000 stated value, 650 shares
 authorized, 522 and 559.5 shares issued and
 outstanding at December 31, 2007 and December
 31, 2006, respectively  (redeemable in
 liquidation at an aggregate of $5,220,000 at
 December 31, 2007)                                      134          146
Redeemable Preferred Stock - Series C (8%
 cumulative, $1,000 stated value, 10,000
 shares authorized, 5,202 and 5,000 shares
 issued and outstanding at December 31, 2007
 and December 31, 2006, respectively
 (redeemable in liquidation at an aggregate
 of $5,202,000 at December 31, 2007)                       -            -
Stockholders' deficit:
  Common stock, $0.01 par value, 750,000,000
   shares authorized, 1,393,231 shares issued
   and 1,374,632 outstanding at December 31,
   2007, retroactively restated; 230,000,000
   shares authorized, 1,245,108 shares issued
   and 1,226,509 outstanding at December 31,
   2006, retroactively restated                           14           12
  Treasury stock, 18,599 shares at December 31,
   2007 and 2006, at cost                                  -            -
  Additional paid-in capital                             897          805
  Accumulated deficit                                 (9,304)      (3,083)
                                                 -----------  -----------
     Total stockholders' deficit                      (8,393)      (2,266)
                                                 -----------  -----------
     Total liabilities and stockholders' deficit $     6,131  $     6,861
                                                 ===========  ===========

Adjusted EBITDA Presentation

EBITDA represents net income (loss) before interest, taxes, depreciation and amortization, and in the case of Adjusted EBITDA, before goodwill impairment, gains or losses on the extinguishment of debt and preferred stock, restructuring charges and other non-operating costs. EBITDA is not a measurement of financial performance under GAAP. However, we have included data with respect to EBITDA because we evaluate and project the performance of our business using several measures, including EBITDA. The computations of Adjusted EBITDA for the year ended December 31, 2007 and 2006 are as follows.

                                    Three Months Ended
                          ---------------------------------------   Full
                          March 31, June 30,  September  December   Year
                                                 30,       31,
                            2006      2006      2006      2006      2006
                          --------- --------  --------  --------  --------
Net loss                  $       - $    (11) $   (279) $ (2,516) $ (2,806)
Add non-EBITDA items
 included in net
 results:
Depreciation and
 amortization                     -        -         8       176       184
Interest expense, net             -        -        (7)      666       659
Non-recurring reversal of
 legal accrual                    -        -         -         -         -
Goodwill impairment               -        -         -       411       411
Loss on debt
 extinguishment                   -        -         -       558       558
Loss on redeemable
 preferred stock
 extinguishment                   -        -         -       121       121
                          --------- --------  --------  --------  --------

Adjusted EBITDA           $       - $    (11) $   (278) $   (584) $   (873)
                          ========= ========  ========  ========  ========


                                   Three Months Ended
                          ---------------------------------------   Full
                          March 31, June 30, September December     Year
                                                 30,       31,
                            2007      2007      2007      2007      2007
                         ---------  --------  --------  --------  --------
Net loss                 $  (2,164) $ (1,879) $ (1,597) $   (581) $ (6,221)
Add non-EBITDA items
 included in net
 results:
Depreciation and
 amortization                  262       260       213       214       949
Interest expense, net        1,425     1,379     1,357       491     4,652
Non-recurring reversal
 of legal accrual             (230)        -         -         -      (230)
Goodwill impairment              -         -         -         -         -
Loss on debt
 extinguishment                234       107         -         -       341
Loss on redeemable
 preferred stock
 extinguishment                363         -         -         -       363
                         ---------  --------  --------  --------  --------
Adjusted EBITDA
                         $   (110)  $   (133) $    (27) $    124  $   (146)
                         =========  ========  ========  ========  ========

The company considers adjusted EBITDA to be an important supplemental indicator of its operating performance, particularly as compared to the operating performance of its competitors, because this measure eliminates many differences among companies in financial, capitalization and tax structures, capital investment cycles and ages of related assets, as well as certain recurring non-cash and non-operating items. It believes that consideration of EBITDA should be supplemental, because EBITDA has limitations as an analytical financial measure. These limitations include the following: EBITDA does not reflect its cash expenditures, or future requirements for capital expenditures or contractual commitments; EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on its indebtedness; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; EBITDA does not reflect the effect of earnings or charges resulting from matters it considers not to be indicative of its ongoing operations; and not all of the companies in its industry may calculate EBITDA in the same manner in which it calculates EBITDA, which limits its usefulness as a comparative measure.

Management compensates for these limitations by relying primarily on its GAAP results to evaluate its operating performance and by considering independently the economic effects of the foregoing items that are not reflected in EBITDA. As a result of these limitations, EBITDA should not be considered as an alternative to net income (loss), as calculated in accordance with generally accepted accounting principles, as a measure of operating performance, nor should it be considered as an alternative to cash flows as a measure of liquidity.

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