Tranzeo Wireless Technologies Inc.
TSX : TZT

Tranzeo Wireless Technologies Inc.

May 15, 2009 21:44 ET

Tranzeo Wireless Reports First Quarter 2009 Results

PITT MEADOWS, BRITISH COLUMBIA--(Marketwire - May 15, 2009) - Tranzeo Wireless Technologies Inc. (TSX:TZT), a leading producer of high-speed wireless broadband communication systems, today announced its financial results for the first quarter 2009.

Financial Highlights:

- Revenue was $3.2 million compared with $5.8 million year over year and compared with $3.2 million in the prior quarter. The decrease in sales year over year was primarily due to reduced demand from the United States market which we attribute to the economic downturn.

- Gross profit declined to $1.0 million from $2.1 million for 2008 which was the result of a decrease in sales, coupled with lower margins on our new Wimax products.

- We reported a net loss of $0.6 million compared to net earnings of $0.3 million for 2008.

- EBITDA was a loss of $0.1 million, or $0.00 per share, for 2009, compared to a gain of $0.9 million, or $0.03 per share for 2008.

Operational Highlights:

- We received a significant purchase order from Aperto Networks to deliver Aperto-branded WiMAX subscriber units.

- In partnership with PT. Teknologi Riset Global(TRG), we will begin shipping the first WiMAX subscriber units to Indonesian carriers in Q2 09.Tranzeo and TRG have been collaborating on a family of WiMAX devices which will be incorporated into TRG's total WiMAX solution and targeted for Indonesian carriers with licensed spectrum at 3.3GHz and soon to be 2.3GHz.

- We have signed an agreement with an OEM WiMAX base station partner to supply OEM-branded customer premise equipment with product to be delivered over a period of 24 months.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipate", "plan", "expect", "believe", "intend" and similar expressions to identify forward-looking statements that relate to our business, management, operating results and financial condition. These statements are not historical facts, but reflect our current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risk Factors" and other sections of our Annual Information Form and MD&A and in other filings which may be found on SEDAR at www.sedar.com.

About Tranzeo

At the forefront of the growing fixed wireless industry, Tranzeo Wireless Technologies Inc. (TSX:TZT) designs, builds and distributes a full range of high-bandwidth wireless data network products, including WiMax products. Our innovative approach and in-house expertise ensures our products are reliable yet affordable, offer state-of-the-art features, and are easy to install, operate and deploy. We are continually adding products and features to provide our customers with the latest available innovations and end-to-end fixed wireless solutions, through a growing global network of distributors. For more information about our company and our products, visit www.tranzeo.com.



TRANZEO WIRELESS TECHNOLOGIES INC.

Interim Consolidated Balance Sheet

March 31, 2009 December 31,2008
(Unaudited)
--------------------------------

Assets
Current assets:
Accounts receivable $ 3,215,752 $ 3,289,007
Prepaid expenses 761,804 768,822
Inventories 4,861,056 6,786,039
-------------- ------------
8,838,612 10,843,868

Property, plant, and equipment 11,193,644 11,482,421
Deferred development costs 6,429,215 5,945,883
Future income taxes 2,835,002 2,533,191
-------------- ------------
$ 29,296,473 $ 30,805,363
-------------- ------------
-------------- ------------

Liabilities and Shareholders' Equity
Current Liabilities:
Bank Indebtedness $ 3,248,177 $ 3,116,276
Accounts payable and accrued liabilities 4,052,181 4,835,195
Equipment Loan 80,240 84,960
Current portion of capital lease obligation 949,058 998,169
Short Term Debt 2,000,000 2,000,000
-------------- ------------
10,329,656 11,034,600
Capital lease obligation 428,473 644,858
-------------- ------------
10,758,129 11,679,458
-------------- ------------

Shareholders' equity:
Share capital 17,525,344 17,525,344
Contributed surplus 1,040,796 1,015,298
Retained earnings (deficit) (27,796) 585,263
-------------- ------------
18,538,344 19,125,905
-------------- ------------
$ 29,296,473 $ 30,805,363
-------------- ------------
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TRANZEO WIRELESS TECHNOLOGIES INC.

Interim Consolidated Statements of Operations and Deficit (Unaudited)

Three Months Ended
March 31,
2009 2008
------------------------------
Sales $ 3,167,877 $ 5,760,949
Cost of goods sold 2,182,245 3,686,435
------------ ------------
Gross profit 985,632 2,074,514
------------ ------------

Expenses
Sales and marketing 336,191 541,076
Research and development - amortization of
deferred costs 273,000 58,850
General and administrative 690,391 655,081
Share based compensation 25,498 -
Amortization 318,096 208,626
------------ ------------
1,643,176 1,463,633
------------ ------------

Earnings (loss) before other items (657,544) 610,881
------------ ------------

Other expenses
Interest Expense 205,300 89,360
Foreign exchange loss 2,026 11,734
------------ ------------
207,326 101,094
------------ ------------

Net earnings (loss) before income taxes (864,870) 509,787

Income tax expense (recovery) (251,811) 160,583
------------ ------------

Net earnings (loss) (613,059) 349,204

Retained earnings, beginning of quarter 585,263 2,383,979

------------ ------------
Retained earnings (deficit), end of quarter $ (27,796) $ 2,733,183
------------ ------------
------------ ------------

Earnings (loss) per share for the period
(Note 6)
Basic $ (0.02) $ 0.01
------------ ------------
------------ ------------
Diluted $ (0.02) $ 0.01
------------ ------------
------------ ------------

------------ ------------
Weighted average number of shares
outstanding for the year 26,370,405 26,297,563
------------ ------------
------------ ------------


TRANZEO WIRELESS TECHNOLOGIES INC.

Interim Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended
March 31,
2009 2008
------------------------------

Cash flows from operating activities:
Net income (loss) for the quarter $ (613,059) $ 349,204

Adjustments to reconcile net income to net
cash from operating activities:
Amortization of property, plant and
equipment 318,096 208,626
Amortization of deferred development costs 273,000 58,850
Interest on capital leases 41,673 65,172
Future income tax expense (recovery) (251,811) 160,583
Stock based compensation 25,498 -
------------ ------------
(206,603) 842,435

Changes in working capital assets and liabilities
Prepaid expenses 7,018 (82,840)
Accounts receivable 73,255 (2,028,006)
Accounts payable and accrued liabilities (3,398,366) (1,564,777)
Inventories 4,540,335 2,180,495
------------ ------------
Net cash flows from (used in) operating
activities 1,015,639 (652,693)
------------ ------------

Cash flows from investing activities:
Additions to property, plant, and equipment (29,319) (294,902)
Deferred development expenses (806,332) (955,911)
------------ ------------

Net cash flows used in investing activities (835,651) (1,250,813)
------------ ------------

Cash flows from financing activities:
Bank indebtedness 131,901 2,053,270
Repayment of capital lease obligations (307,169) (317,935)
Repayment of equipment loan (4,720) -
------------ ------------

Net cash flows from (used in) financing
activities (179,988) 1,735,335
------------ ------------

Net increase (decrease) in cash - (168,171)

Cash and cash equivalents, beginning of
period - 168,171
------------ ------------

Cash and cash equivalents, end of period $ - $ -
------------ ------------
------------ ------------

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CASH PAID FOR
Interest $ 205,300 $ 89,360
------------ ------------
------------ ------------
Income taxes $ - $ -
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