SOURCE: Remote Dynamics, Inc.

August 14, 2009 13:34 ET

Remote Dynamics Reports Q2 2009 Financial Results

PLANO, TX--(Marketwire - August 14, 2009) - Remote Dynamics (OTCBB: RMTD) (www.remotedynamics.com), a provider of asset tracking and fleet management solutions, reports its financial results for the second quarter ended June 30, 2009.

Gary Hallgren, CEO of Remote Dynamics, commented, "We rebounded from the first quarter's negative adjusted EBITDA of $18,000 to post positive adjusted EBITDA of $8,000 in the second quarter. The REDIview™ subscriber base increased as well, after dipping slightly in the first quarter due to higher customer defaults. Despite the tough economic conditions, we have been successful in continuing to demonstrate value to our customers by delivering a quick return on investment. "

Highlights for the quarter included:

--  REDIview subscriber base increased 7.8% from June 30, 2008 and a 0.7%
    increase since December 31, 2008.  Ending REDIview units were 11,283 versus
    10,462 on June 30, 2008.
    
--  Total revenue for the three months ended June 30, 2009 totaled $1.30
    million compared to $1.27 million during the three months ended June 30,
    2008.  In accordance with our revenue recognition policies, REDIview unit
    sales and the associated cost of sales are deferred and recognized over the
    customer's contract life.  Our future revenues will be solely dependent
    upon sales of our REDIview product line.  The failure of the marketplace to
    accept our REDIview product line would have a material adverse effect on
    the Company's business, financial condition and results of operations.
    Service revenue for the three months ended June 30, 2009 totaled $925,000
    compared to $850,000 for the three months ended June 30, 2008.  This 9%
    increase is primarily attributable to an increase in units in service.
    Average units in service increased 9%, from 10,234 units in the second
    quarter of 2008 to 11,141 in the second quarter of 2009.  Ratable product
    revenue for the second quarter of 2009 was $313,000 compared to $356,000
    for the comparable period in 2008.  The 12% decrease is due to the
    completion of the amortization of the deferred performance obligation in
    2008 which contributed to $144,000 of revenue in the comparable period of
    2008 which was not included in the 2009 period.  The amortization of the
    deferred performance obligation was complete as of December 31, 2008.  This
    decrease was predominantly offset by an increase in ratable product revenue
    of $101,000.
    
--  Total gross profit margin was 58% for the three months ended June 30,
    2009 compared to 61% for the three months ended June 30, 2008.  Service
    margin for the second quarter of 2009 was 65% compared to 61% for the
    second quarter of 2008.  This increase is primarily attributable to reduced
    costs of airtime and mapping.  Ratable product margin was 38% for the
    second quarter of 2009 compared to 66% for the first quarter of 2008.
    Excluding the amortization of the deferred performance obligation, ratable
    product margin in the first quarter of 2008 would have been 42%.
    
--  Total operating expenses totaled $949,000 for the three months ended
    June 30, 2009 compared to $922,000 for the three months ended June 30,
    2008.  The slight increase from the comparable period in the prior year is
    due to additional general and administrative expenses.
    
--  Interest expense totaled $0.3 million for the three months ended June
    30, 2009 and the three months ended June 30, 2008.  The current period
    interest expense primarily consists of the accretion of the Series B Notes
    of $262,000.
    
--  Adjusted EBITDA was $8,000 for the second quarter of 2009 compared to
    $59,000 for the same period in 2008.  Excluding the amortization of the
    deferred performance obligation recorded in the same period, adjusted
    EBITDA for the second quarter of 2008 would have been negative $85,000.
    The improvement in adjusted EBITDA, excluding the effect of the
    amortization of the deferred performance obligation, is attributable to
    growth in the installed base as well as our efforts to improve gross
    margins.
    

Other Highlights for 2009 include:

--  In the first six months of 2009, we issued 5,902,916,798 shares of
    common stock as partial principal payments on the Series A Notes in
    satisfaction of $888,387 of obligations due under the notes.  Additionally,
    during the same period, we issued 3,255,173,554 shares of common stock as
    partial payments on the Series B Notes in satisfaction of $429,404 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 2009 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.
    

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.

--Financial Tables Follow--

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


                             Three months ended        Six months ended
                                  June 30,                 June 30,
                               2009        2008         2009        2008
                           -------------  --------  -------------  -------
Revenues
  Service                  $         925  $    850  $       1,869  $ 1,654
  Ratable product                    313       356            620      692
  Product                             59        68             97      133
                           -------------  --------  -------------  -------
     Total revenues                1,297     1,274          2,586    2,479
                           -------------  --------  -------------  -------

Cost of revenues
  Service                            328       334            648      689
  Ratable product                    194       122            382      235
  Product                             20        42             24       55
                           -------------  --------  -------------  -------
    Total cost of revenues           542       498          1,054      979
                           -------------  --------  -------------  -------
Gross profit                         755       776          1,532    1,500
                           -------------  --------  -------------  -------
Expenses:

  General and
   administrative                    398       370            831      771
  Sales and marketing                175       165            361      350
  Engineering                        174       182            351      408
  Depreciation and
   amortization                      202       205            403      408
                           -------------  --------  -------------  -------
    Total expenses                   949       922          1,946    1,937
                           -------------  --------  -------------  -------
    Operating loss                  (194)     (146)          (414)    (437)

Other income (expenses):

Interest income                        2        11              7       26
Interest expense                    (343)     (274)          (758)  (1,099)
Other expense                          -        (1)             -       (1)
                           -------------  --------  -------------  -------
    Total other expenses            (341)     (264)          (751)  (1,074)
                           -------------  --------  -------------  -------
    Loss before income
     taxes                          (535)     (410)        (1,165)  (1,511)
Income tax benefit                     -         -              -        -
                           -------------  --------  -------------  -------
    Net loss                        (535)     (410)        (1,165)  (1,511)
                           -------------  --------  -------------  -------

Net loss per common share
 - basic and diluted       $       (0.00) $ (45.56) $       (0.00) $ (4.12)
                           =============  ========  =============  =======
Weighted average number of
 common shares
 outstanding:
   Basic and diluted       6,480,065,687         9  4,718,972,784      367
                           =============  ========  =============  =======


The accompanying notes are an integral part of these consolidated financial
statements.




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




                                                    June 30,   December 31,
                                                      2009         2008
                                                  (unaudited)
                                                  -----------  -----------
                             ASSETS
Current assets:
  Cash and cash equivalents                       $        66  $         -
  Accounts receivable, net of allowance for
   doubtful accounts of $85 as of June 30, 2009
   and December 31, 2008, respectively                    609          803
  Inventories, net of reserve for obsolescence of
   $7  as of June 30, 2009 and December 31, 2008,
   respectively                                           205          153
  Deferred product costs - current portion                540          580
  Lease receivables and other current assets, net         246          246
                                                  -----------  -----------
     Total current assets                               1,666        1,782

Property and equipment, net of accumulated
 depreciation and amortization of $245 and $212,
 respectively                                              83          102
Deferred product costs - non-current portion              317          352
Goodwill                                                  616          616
Customer Lists, net                                     1,334        1,610
Software, net                                             416          502
Tradenames, net                                            36           44
Deferred financing fees, net                               81          135
Lease receivables and other assets, net                    15           22
                                                  -----------  -----------
     Total assets                                 $     4,564  $     5,165
                                                  ===========  ===========


             LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                                $     1,283  $     1,363
  Accounts payable - related parties                       56          110
  Deferred product revenues - current portion             907          952
  Series A convertible notes payable                    2,771        3,646
  Series B convertible notes payable (net of
   discount of $805 and $1,301, respectively)           5,900        5,834
  Note payable - related parties                          250          250
  Accrued expenses and other current liabilities        2,571        2,392
  Accrued expenses and other current liabilities
   - related parties                                      223          106
                                                  -----------  -----------
     Total current liabilities                         13,961       14,653

Deferred product revenues - non-current portion           528          588
Other non-current liabilities                               8           34
                                                  -----------  -----------
     Total liabilities                                 14,497       15,275
                                                  -----------  -----------
Commitments and contingencies

Redeemable Preferred Stock - Series B (3% when
 declared, $10,000 stated value, 650 shares
 authorized, 522 shares issued and outstanding at
 June 30, 2009 and December 31, 2008, respectively
 (redeemable in liquidation at an aggregate of
 $5,220,000 at June 30, 2009))                            134          134
Redeemable Preferred Stock - Series C (8%
 cumulative, $1,000 stated value, 10,000 shares
 authorized, 5,487 and 5,274 shares issued and
 outstanding at June 30, 2009 and December 31, 2008,
 respectively  (redeemable in liquidation at an
 aggregate of $5,487,000 at June 30, 2009))                 -            -
Stockholders' deficit:
  Common stock, $0.0001 par value, 15,000,000,000
   shares authorized, 10,076,136,500 shares issued
   and 10,076,136,453 outstanding at June 30, 2009;
   677,858,548 shares issued and 677,858,501
   outstanding at December 31, 2008                     1,008           68
  Treasury stock, 47 shares at June 30, 2009 and
   December 31, 2008, respectively, at cost,
   retroactively restated                                   -            -
  Additional paid-in capital                            2,077        1,675
  Accumulated deficit                                 (13,152)     (11,987)
                                                  -----------  -----------
     Total stockholders' deficit                      (10,067)     (10,244)
                                                  -----------  -----------
     Total liabilities and stockholders' deficit  $     4,564  $     5,165
                                                  ===========  ===========

The accompanying notes are an integral part of these consolidated financial
statements.

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.

                                               Six Months Ended
                                                   June 30,
                                                2009      2008
                                              --------  --------
Net loss                                      $ (1,165) $ (1,511)
Add non-EBITDA items included in net results:
Depreciation and amortization                      403       408
Interest expense, net                              751     1,073
Other expense                                        -         1
                                              --------  --------

Adjusted EBITDA                               $    (11) $    (29)
                                              --------  --------



Excluding the amortization of the deferred performance obligation, adjusted EBITDA for the second quarter of 2008 would have been negative $253,000 compared to negative $11,000 for the second quarter of 2009. 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 info:
    Gary Hallgren
    CEO
    214-440-5210