SOURCE: Remote Dynamics

May 15, 2008 12:00 ET

Remote Dynamics Reports Q1 2008 Financial Results

PLANO, TX--(Marketwire - May 15, 2008) - Remote Dynamics (OTCBB: RDYM) (www.remotedynamics.com), a provider of asset tracking and fleet management solutions, reports its financial results for the quarter ended March 31, 2008.

Gary Hallgren, CEO of Remote Dynamics, commented, "We continued our momentum from 2007 with a strong first quarter. We reached a significant milestone by increasing our REDIview subscriber base to over 10,000."

Highlights for the quarter included:

--  REDIview subscriber base passes the 10,000 mark, an increase of 6.5%
    from December 31, 2007 and an increase of 15.2% since March 31, 2007.
    


                                      Three Months Ended
                                           September  December
                     March 31,  June 30,      30,        31,     March 31,
                       2007       2007       2007       2007       2008
                     ---------- ---------- ---------- ---------- ----------
Ending REDIview
 units                    8,838      9,226      9,057      9,560     10,182

--  Total revenue for the quarter ended March 31, 2008 totaled $1.21
    million compared to $1.26 million for the quarter ended March 31, 2007.
    The 4.7% decrease from the comparable period in the prior year is primarily
    attributable to a $129,000 (or 19.3%) increase in REDIview service revenue
    offset by a $136,000 (or 6.3%) reduction in amortization of the deferred
    performance obligation of our installed base (recorded as part of the
    reverse merger transaction on December 4, 2006) and the discontinuation of
    our VMI service offering which is included in prior period results.
    
--  Gross profit margin improved to 60% from 57% for the quarter ended
    March 31, 2007.  This increase is primarily attributable to reduced costs
    of airtime and mapping. Of the 60% gross profit margin, 12 percentage
    points or $139,000 represents amortization of the deferred performance
    obligation of our installed base related to the reverse merger transaction
    on December 4, 2006.  The Company expects gross profit margins of greater
    than 55% to continue through 2008.
    
--  Released REDIview 2.1 with improved features and functions.
    
--  Adjusted EBITDA was negative $88,000 vs. negative $110,000 for the
    quarter ended March 31, 2007.  The return to negative EBITDA for the first
    quarter of 2008 was due primarily to a temporary increase in spending on
    product development and public relations.
    

Other Highlights for 2008 include:

--  During 2008, we made payments to certain holders of our secured
    convertible notes of amounts due under the notes by issuing shares of our
    common stock under the terms of the notes.  These payments were in the form
    of 39,656,982 shares of the Company's common stock in satisfaction of
    $278,180 of obligations due under the notes.  We expect to issue additional
    shares of our common stock in payment of amounts due under the notes during
    the remainder of 2008 and thereafter.  In general, the shares issued are
    available for immediate resale by the holders in accordance with Rule 144
    under the Securities Act of 1933, as amended.
    
--  On May 12, 2008, Bounce Mobile Systems, Inc. converted 339 shares of
    Series C Preferred Stock into 300,110,259 shares of our common stock.
    
--  On May 14, 2008, we received final commitment from investors to close
    on the fourth round of our series B secured convertible note financing,
    whereby we will receive gross proceeds of $376,000 of which $200,000 was
    already pre-funded by BMSI.  We expect to close the fourth round on or
    about May 16, 2008.
    

Non-GAAP Financial Measures

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

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 (UNAUDITED)
                 (In thousands, except per share amounts)

                                                    Three months ended
                                                        March 31,
                                                    2008          2007
                                                ------------  ------------
Revenues
  Service                                       $        804  $        735
  Ratable product                                        336           467
  Product                                                 65            62
                                                ------------  ------------
     Total revenues                                    1,205         1,264
                                                ------------  ------------

Cost of revenues
  Service                                                355           381
  Ratable product                                        113            66
  Product                                                 13            99
                                                ------------  ------------
    Total cost of revenues                               481           546
                                                ------------  ------------
Gross profit                                             724           718
                                                ------------  ------------
Expenses:

  General and administrative                             401           582
  Sales and marketing                                    185           200
  Customer operations                                     76            38
  Engineering                                            150           121
  Depreciation and amortization                          203           262
                                                ------------  ------------
    Total expenses                                     1,015         1,203
                                                ------------  ------------
    Operating loss                                      (291)         (485)

Other income (expenses):

Interest income                                           15            29
Interest expense                                        (825)       (1,454)
Other income                                               -           343
Loss on extinguishment of debt                             -          (234)
Loss on extinguishment of redeemable preferred
 stock                                                     -          (363)
                                                ------------  ------------
    Total other income (expenses)                       (810)       (1,679)
                                                ------------  ------------
    Loss before income taxes                          (1,101)       (2,164)

Income tax benefit                                         -             -
                                                ------------  ------------
    Net loss                                          (1,101)       (2,164)
                                                ============  ============

Net loss per common share - basic and diluted   $      (0.32) $      (1.70)
                                                ============  ============
Weighted average number of common shares
 outstanding:
   Basic and diluted                                   3,429         1,272
                                                ============  ============




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


                                                  March 31,   December 31,
                                                    2008          2007
                                                (unaudited)
                                                ------------  ------------
                       ASSETS
Current assets:
  Cash and cash equivalents                     $         50  $        228
  Accounts receivable, net of allowance for
   doubtful accounts of $43 and $54,
   respectively                                          588           526
  Due from related parties                                 -            71
  Inventories, net of reserve for obsolescence
   of $3 and $7, respectively                            201           158
  Deferred product costs - current portion               404           352
  Lease receivables and other current assets,
   net                                                   433           466
                                                ------------  ------------
     Total current assets                              1,676         1,801

Property and equipment, net of accumulated
 depreciation and amortization of $172 and $154,
 respectively                                            145           157
Deferred product costs - non-current portion             336           336
Goodwill                                                 616           616
Customer Lists, net                                    2,024         2,162
Software, net                                            631           674
Tradenames, net                                           55            59
Deferred financing fees, net                             167           191
Lease receivables and other assets, net                  100           135
                                                ------------  ------------
     Total assets                               $      5,750  $      6,131
                                                ============  ============


        LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                              $      1,660  $      1,550
  Accounts payable - related parties                      22            55
  Deferred product revenues - current portion          1,151         1,197
  Series A convertible notes payable (net of
   discount of $0 and $392, respectively)              4,070         3,801
  Series B convertible notes payable (net of
   discount of $1,360 and $1,543, respectively)        5,135         5,007
  Note payable - related parties                         250           250
  Accrued expenses and other current
   liabilities                                         1,852         1,770
  Accrued expenses and other current
   liabilities - related parties                          81            60
                                                ------------  ------------
     Total current liabilities                        14,221        13,690

Deferred product revenues - non-current portion          592           590
Capital leases, less current portion                       5            11
Other non-current liabilities                             97            99
                                                ------------  ------------
     Total liabilities                                14,915        14,390
                                                ------------  ------------
Commitments and contingencies

Redeemable Preferred Stock - Series B (3% when
 declared, $10,000 stated value, 650 shares
 authorized, 522 shares issued and outstanding
 at March 31, 2008 and December 31, 2007,
 respectively (redeemable in liquidation
 at an aggregate of $5,220,000 at
 March 31, 2008)                                         134           134
Redeemable Preferred Stock - Series C (8%
 cumulative, $1,000 stated value, 10,000
 shares authorized, 5,202 shares issued
 and outstanding at March 31, 2008 and
 December 31, 2007, respectively (redeemable in
 liquidation at an aggregate of $5,202,000
 at March 31, 2008)                                        -             -

Stockholders' deficit:
 Common stock, $0.01 par value, 750,000,000
  shares authorized, 8,138,797 shares
  issued and 8,120,198 outstanding at
  March 31, 2008, retroactively restated;
  230,000,0000 shares authorized, 1,393,231
  shares issued and 1,374,632 outstanding at
  December 31, 2007, retroactively restated               81            14
 Treasury stock, 18,599 shares at March 31,
  2008 and December 31, 2007, respectively, at
  cost                                                     -             -
 Additional paid-in capital                            1,025           897
 Accumulated deficit                                 (10,405)       (9,304)
                                                ------------  ------------
     Total stockholders' deficit                      (9,299)       (8,393)
                                                ------------  ------------
     Total liabilities and stockholders'
      deficit                                   $      5,750  $      6,131
                                                ============  ============

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 the respective quarters are as follows.

                                    Three Months Ended
                March 31,    June 30,  September 30, December 31, March 31,
                   2007        2007        2007        2007        2008
                ----------  ----------  ----------  ----------  ----------
Net loss        $   (2,164) $   (1,879) $   (1,597) $     (581) $   (1,101)
Add non-EBITDA
 items included
 in net results:
Depreciation
 and amortization      262         260         213         214         203
Interest
 expense, net        1,425       1,379       1,357         491         810
Non-recurring
 reversal of
 legal accrual        (230)          -           -           -           -
Loss on debt
 extinguishment        234         107           -           -           -
Loss on
 redeemable
 preferred
 stock
 extinguishment        363           -           -           -           -
                ----------  ----------  ----------  ----------  ----------

Adjusted EBITDA $     (110) $     (133) $      (27) $      124  $      (88)
                ----------  ----------  ----------  ----------  ----------

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.

Contact Information

  • Contact:
    Gary Hallgren
    CEO

    Remote Dynamics, Inc.
    Address
    200 Chisholm Place
    Suite 120, Plano
    Texas 75075

    Phone 972-330-4028
    Fax 972-423-1620