WebTech Wireless Inc.
TSX : WEW

WebTech Wireless Inc.

December 12, 2007 16:30 ET

WebTech Wireless Reports 21% Increase in Revenue in Releasing Financial Results for First Quarter of FY 2008

BURNABY, BRITISH COLUMBIA--(Marketwire - Dec. 12, 2007) - WebTech Wireless Inc. (TSX:WEW), a leading supplier of mobile telematics, today reported revenue of $4.7 million for the quarter ended October 31, 2007. Reported results represent an increase of 21% over prior year same quarter revenue of $3.9 million. Net loss for the quarter was $1 million ($0.02 per common share) including more than $470,000 in foreign exchange related charges compared with income of $0.03 million ($nil per common share) for the prior year.

Revenue grew by 54% year over year when revenues from the Company's now suspended operations with its former VAR, Crown Telecom ("Crown") in Brazil are excluded from the prior year results.

The Company realized an increase in revenues in all markets save Brazil. Revenue year over year from sales in North America increased by 71% with an increase in sales of 45% in Europe year over year as sales to government fleets and small to medium commercial fleets increased.

The Company reported a gross profit margin of 47% compared with 49% for the prior year. Gross profit margin on hardware and other non-recurring revenue fell by approximately 4.5 percentage points due to the foreign exchange losses however the gross profit margin from recurring revenue increased by more than 2 points over the prior year due to the scalable nature of subscriber based revenues. Gross profit declined primarily due to the strengthening of the Canadian dollar in the quarter against the US dollar.

At quarter end, the Company reported total assets of $36 million (July 31, 2007: $37 million) and working capital of $31 million (July 31, 2007: $32 million).

During the quarter, the Company restructured its arrangement with Crown whereby Crown transferred certain rights to the Company in exchange for a forgiveness of a portion of the debt owed by Crown to the Company. No monetary assets changed hands under this agreement and the debt in question has previously been written off by the Company; as such the agreement had no effect on the reported results.

"With 21% growth in revenue year over year, or 54% without Crown sales in the comparables, in our traditionally weakest quarter we have shown that WebTech's product suite is being well received across all of our markets," comments Scott Edmonds, Chief Financial Officer of WebTech Wireless Inc. "Although we lost money overall in the quarter, expenses fell more than 10% from the prior quarter despite increased spending on litigation matters in the US and Brazil, and we are working hard to ensure continued growth in revenues throughout the remainder of this fiscal year."

The Company announces that it will hold a conference call on December 12, 2007 at 5:00 PM Eastern Time and that a recording of the conference call will be posted on the Company's website at www.webtechwireless.com within 24 hours of the call. Interested parties may participate in the call by dialing 1-800-926-5124 or 1-212-231-2901 (international callers).

For further details, please view the Company's financial statements and management's discussion and analysis at www.sedar.com.

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 SHEET
(Amounts in 000's)

31-Oct-07 31-Jul-07
------------ ------------
(Unaudited) (Audited)
ASSETS
Current
Cash and cash equivalents $ 22,222 $ 22,344
Accounts receivable, net of allowance 3,996 4,128
Inventory, net of allowance 7,460 7,640
Prepaid expenses and deposits 1,262 1,583
------------ ------------

34,940 35,695
------------ ------------

Property and equipment (Note 7) 988 1,021
Property under development (Note 7) 243 -
------------ ------------

$ 36,171 $ 36,716
------------ ------------
------------ ------------

LIABILITIES
Current
Accounts payable and accrued liabilities $ 3,785 $ 3,533
Deferred lease inducement 107 110
Current portion of deferred revenue 218 260
------------ ------------
4,110 3,903
Long term
Deferred revenue 90 -
------------ ------------

4,200 3,903
------------ ------------

SHAREHOLDERS' EQUITY
Share capital (Note 8) 60,268 60,142
Contributed surplus (Note 9) 973 858
Deficit (29,270) (28,187)
------------ ------------

31,971 32,813
------------ ------------

$ 36,171 $ 36,716
------------ ------------
------------ ------------

Commitments (Note 12)

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 STATEMENT OF OPERATIONS AND DEFICIT
(Amounts in 000's except per share amounts)
(Unaudited)

Three months ended
31-Oct-07 31-Oct-06
------------ ------------

Revenue $ 4,711 $ 3,907

Cost of goods sold 2,513 1,993
------------ ------------

Gross profit 2,198 1,914
------------ ------------

Expenses
Marketing and sales 1,448 836
Research and development 834 635
General and Administration 870 443
Amortization 130 76
------------ ------------

3,282 1,990

------------ ------------
Loss before other items (1,084) (76)

Other items
Interest income 261 88
Foreign exchange (loss) gain (260) 22
------------ ------------

Net (loss) income for the period $ (1,083) $ 34

Deficit, beginning of the period (28,187) (1,837)

------------ ------------
Deficit, end of period $ (29,270) $ (1,803)
------------ ------------
------------ ------------

Basic and fully diluted (loss) earnings per
share $ (0.02) $ -
Weighted average shares outstanding during
the year 58,301,650 42,290,339

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


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

Three months ended
31-Oct-07 31-Oct-06
------------ ------------

Operating Activities
Net (loss) income for the period $ (1,083) $ 34
Add items not affecting cash:
Amortization 130 76
Stock based compensation 154 45
Amortization of lease inducement (3) -
------------ ------------

(802) 155
Changes in non-cash working capital items
related to operations:
Accounts receivable 132 (270)
Inventory 180 (1,910)
Prepaid expense and deposits 321 (718)
Accounts payable and accrued liabilities 252 (234)
Deferred Revenue 48 86
------------ ------------

131 (2,890)
------------ ------------

Financing Activities
Common shares issued, net of costs 87 265
------------ ------------

87 265
------------ ------------

Investing Activities
Purchase of intangible assets - (36)
Purchase of capital assets (97) (70)
Purchase of property under development (243) -
------------ ------------

(340) (106)
------------ ------------

Net increase (decrease) in cash during the
period (122) (2,731)

Cash, beginning of period 22,344 10,640
------------ ------------

Cash, end of period $ 22,222 $ 7,909
------------ ------------
------------ ------------

Cash and cash equivalents consist of:
Cash $ 22,222 $ 1,409
Term deposits - 6,500

------------ ------------
$ 22,222 $ 7,909
------------ ------------
------------ ------------

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

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.

Contact Information