WebTech Wireless Inc.
TSX : WEW

WebTech Wireless Inc.

December 11, 2008 16:00 ET

WebTech Wireless Announces Record Quarter and a Return to Profitability with 67% Growth in Revenue

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 11, 2008) - WebTech Wireless Inc. (TSX:WEW), a leading provider of location-based and fleet telematics services, today reported revenue of $7.8 million for the quarter ended October 31, 2008, representing a 67% increase year-over-year. Profit for the quarter was $70,000.



Highlights included:

- Record revenue of $7.8 million

- Profit of $70,000 for an Earnings per Share of nil

- Compared to the preceding fiscal quarter ended July 31:

- Gross Profit grew by six percentage points to 49%

- Expenses grew at a nominal rate of 2.4%

- Working capital improved by $557,000


Revenue growth came primarily from the US and was driven by deliveries on a previously announced contract with a large US based courier company and a strengthened US dollar. Profit margins at 49% were comparable with those achieved in the first-quarter of the prior year (Aug-Oct 2007), and the average for the year ended July 31, 2008. Expenses for the quarter at $4.8 million were 46% above the same period of the prior year, but less than 3% above those of the preceding quarter.

As at October 31, 2008, the Company reported total assets of $29.8 million (Q1 2007: $35.5 million) and working capital of $19.7 million (Q1 2007: $24.8 million). The year-on-year decrease in working capital resulted from the buildup of inventory for the aforementioned company deliveries, of which commenced in the quarter, and the Company's now suspended share buyback program.

Working capital increased by $557,000 from the prior quarter as a result of increased receivables.

"We are obviously very pleased to be reporting a profit for this quarter, and while foreign exchange gains made a significant contribution to our results, we are also beginning to see the results from previously announced sales and from holding the line on expenses," said Anwar Sukkarie, Chief Executive Officer of WebTech Wireless Inc. "Our working capital is a key metric and we are particularly pleased to have seen this improve since the end of our last quarter".

About WebTech Wireless Inc.

WebTech Wireless Inc. (TSX:WEW) is a global Telematics, location-based services provider that develops, manufactures, and delivers turnkey wireless solutions designed to improve productivity and profitability. WebTech Wireless products include wireless hardware and software services running on cellular and satellite networks, and include Automatic Vehicle Location, Mapping, Reporting, Vehicle Diagnostics, Driver Status, In-vehicle Telemetry, Messaging, In-vehicle Navigation, and wireless application and Internet connectivity. WebTech Wireless is currently providing devices and services worldwide in eight languages to over forty-one countries covering five continents. WebTech Wireless' scalable solutions are used by a broad range of small, medium and Fortune 500 companies and by governments. For more information, please visit www.webtechwireless.com.

Trademarks are the property of their owners.



WEBTECH WIRELESS INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in 000's)

31-Oct-08 31-Jul-08
----------- ------------
(Unaudited)
ASSETS
Current
Cash and cash equivalents $ 4,840 $ 7,246
Accounts receivable, net of allowance 8,883 4,345
Inventory, net of allowance 10,030 10,070
Prepaid expenses and deposits 729 1,131
----------- ------------
24,481 22,792

Property and equipment (Note 7) 1,644 1,638
Property under development (Note 7) 8 86
Long term investments (Note 8) 3,669 3,669
----------- ------------

$ 29,803 $ 28,185
----------- ------------
----------- ------------

LIABILITIES
Current
Bank indebtedness $ 1,500 $ -
Accounts payable and accrued liabilities 2,761 3,224
Current portion of deferred revenue 478 383
----------- ------------
4,739 3,607

Long term
Deferred lease inducement 568 534
Deferred revenue 83 93
----------- ------------
651 627

5,390 4,234
----------- ------------

SHAREHOLDERS' EQUITY
Share capital (Note 9) 59,670 59,620
Contributed surplus (Note 10) 2,133 1,791
Deficit (37,390) (37,460)
----------- ------------

24,413 23,951
----------- ------------

$ 29,803 $ 28,185
----------- ------------
----------- ------------

Commitments (Note 13)

APPROVED BY THE DIRECTORS:

"Signed" "Signed"
------------------ -----------------------
Anwar Sukkarie R.H. (Dick) Pinder


The accompanying notes form an integral part of these financial statements.



WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT
(Amounts in 000's except per share amounts) (Unaudited)


Three months ended
31-Oct-08 31-Oct-07
------------- -------------

Revenue $ 7,840 $ 4,711

Cost of goods sold 4,007 2,513
------------- -------------

Gross profit 3,833 2,198
------------- -------------

Expenses
Marketing and sales 2,333 1,448
Research and development 1,259 834
General and Administration 1,096 870
Amortization 132 130
------------- -------------

4,820 3,282

------------- -------------
Loss before other items (987) (1,084)

Other items
Interest income 27 186
Foreign exchange gain/(loss) 1,030 (260)
Loss in the fair value of long term
investments - (600)

------------- -------------
Net income/(loss) and comprehensive loss for
the period $ 70 $ (1,758)
------------- -------------

Deficit, beginning of the period (37,460) (28,187)
Income/(loss) for the period 70 (1,758)
Deficit, end of period $ (37,390) $ (29,945)
------------- -------------
------------- -------------

Accumulated other comprehensive earnings
Balance - beginning and end of year $ - $ -

Basic and fully diluted earnings (loss)
per share $ 0.00 $ (0.03)
Weighted average shares outstanding during
the year 57,884,469 58,301,650


The accompanying notes form an integral part of these financial statements.



WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in 000's)
(Unaudited)

Three months ended
31-Oct-08 31-Oct-07
------------ ------------

Operating Activities
Net income (loss) for the period $ 70 $ (1,758)
Add items not affecting cash:
Amortization 132 130
Stock based compensation 357 154
Amortization of leasehold inducement (15) (3)
Loss in the fair value of long term investments - 600
------------ ------------

544 (877)

Changes in non-cash working capital items related
to operations:
Accounts receivable (4,538) 207
Inventory 40 180
Prepaid expense and deposits 403 321
Accounts payable and accrued liabilities 1,037 252
Deferred lease inducement 49 -
Deferred revenue 85 48
------------ ------------
(2,381) 131
------------ ------------

Financing Activities
Common shares issued, net of costs 35 87
Shares repurchased - -
------------ ------------

35 87
------------ ------------

Investing Activities
Purchase of capital assets (52) (97)
Purchase of property under development (8) (243)
Increase in long term investment - (6,000)
------------ ------------

(60) (6,340)
------------ ------------

Net increase (decrease) in cash during the period (2,406) (6,122)

Cash and cash equivalents, beginning of period 7,246 22,344
------------ ------------


Cash and cash equivalants, end of period $ 4,840 $ 16,222
------------ ------------
------------ ------------

Cash and cash equivalents consist of:
Cash $ 4,840 $ 16,222

------------ ------------
$ 4,840 $ 16,222
------------ ------------
------------ ------------

Supplemental cash flow information
Interest paid $ 1 $ -
Income taxes paid - -

Noncash Transactions
Transfer of property under development to
property and equipment $ 86 $ -


The accompanying notes form an integral part of these financial statements.


The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

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