WebTech Wireless Inc.
TSX : WEW

WebTech Wireless Inc.

August 13, 2009 16:01 ET

WebTech Wireless Reports 50% Revenue Growth for the Quarter Ended June 30, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 13, 2009) - WebTech Wireless Inc. (TSX:WEW), a leading supplier of location-based and fleet Telematics services, today reported revenue of $7.2 million for the three month fiscal quarter ended June 30, 2009, and $13.9 million for the six months then ended. These revenue figures represent increases of 50% and 28% over the prior comparable figures respectively. The Company broke even for the three and six months, and has generated cash of $1,679 since its last year end.

WebTech Wireless is comparing its results for the quarter ended June 30, 2009, to its results for the quarter ended July 31, 2008 as it has changed its fiscal year end from July 31 to December 31, and July 31, 2008 represents the nearest prior year reporting date to June 30.

Highlights for the quarter include:

- Revenue of $7.2 million

- Break even on net income

- Increase in cash balances of $1.7 million since December 31, 2008 including $1.1 million generated from operations

- Gross profit margins of 62% reflecting the recognition of a very high margin software license

Revenues at $7.2 million were driven by US sales and the recognition of a one-time software license sale, which was accepted by the client in the quarter.

Profit margins at 62% were above target and historical levels due to continuing economies of scale as well as a one time contribution from the license sale.

Net loss for the three months was $169,000 ($nil per common share) and was caused primarily by a foreign exchange loss of $341,000 - largely contributed by a strong Canadian dollar in the month of May and one time legal fees related to the Company's successful appeal of a judgment against it in Brazil. Year to date the Company has lost $54,000 - due again to a foreign exchange loss, and the aforementioned one time legal charges.

Expenses for the quarter of $4.3 million were approximately 8% below prior year, and year to date expenses of $8.4 million are approximately 6% below prior year, including a one time non cash stock based compensation charge of $260,000.

As of June 30, 2009, the Company reported total assets of $27 million (December 31, 2008: $25.4 million) and working capital of $19.4 million (December 31, 2008: $17 million). The increase in working capital was the result of cash generated from operations and funds drawn against the credit facility secured by the MAVII notes.

"This was a milestone quarter for WebTech as we delivered on and recognized our first enterprise license and this is reflected in our revenue and gross margin figures," said Scott Edmonds, Chief Financial Officer, WebTech Wireless Inc. "Our strategy of operating in multiple verticals and multiple territories has protected us from the vagaries of the current recession and our large customer strategy has contributed significantly to this years growth."

A reminder that the Financial Results Conference Call will he held today, August 13th, at 5:00 pm Eastern Time (2:00 pm Pacific Time). Interested parties may participate in the call by dialing 1-800-941-1366 or (212) 231-2904 (for international callers). The conference call will be archived on the Company's website at: www.webtechwireless.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.

Forward Looking Statements

This press release contains forward-looking statements involving risks and uncertainties pertaining to, but not limited to product plans, timing, content, and pricing of products, market and industry expectations, the wireless communications industry, the mobile fleet industry, and general economic and political conditions. Given the risks and uncertainties inherent in the markets and industries referred to in this press release, WebTech Wireless cannot guarantee that any forward looking statements will be realized.

Trademarks are the property of their owners.



WEBTECH WIRELESS INC.
CONSOLIDATED BALANCE SHEET
(Amounts in thousands of Canadian dollars)


30-Jun-09 31-Dec-08
----------- -----------
(Unaudited) (audited)

ASSETS

Current
Cash and cash equivalents $ 5,568 $ 3,889
Accounts receivable, net of
allowance 7,847 7,769
Inventory, net of allowance 8,120 8,629
Prepaid expenses and deposits 725 452
----------- -----------
22,260 20,739
Property and equipment (Note 5) 1,511 1,624
Long term investments (Note 6) 3,000 3,000
----------- -----------

$ 26,771 $ 25,363
----------- -----------
----------- -----------

LIABILITIES

Current
Bank indebtedness (Note 7) $ - $ 1,000
Accounts payable and accrued
liabilities 2,186 1,991
Current portion of deferred revenue 655 685
----------- -----------
2,841 3,676
Long term
Deferred lease inducement 824 642
Deferred revenue 258 274
Long term debt secured by long term
investment (Note 8) 1,710 -
----------- -----------
2,792 916

5,633 4,592
----------- -----------

SHAREHOLDERS' EQUITY

Share Capital (Note 9) 59,879 59,689
Contributed Surplus (Note 10) 4,362 4,131
Retained Earnings (43,103) (43,049)
----------- -----------

21,139 20,771
----------- -----------
$ 26,771 $ 25,363
----------- -----------
----------- -----------

Commitments (Note 12)
Subsequent Event (Note 14)

APPROVED BY THE DIRECTORS:

"Signed" "Signed"
------------------ ---------------------
Anwar Sukkarie Peter W. Roberts


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



WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENT OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT
(Amounts in thousands of Canadian dollars except Gross margin and per
share amounts)
(Unaudited)

Three months ended Six months ended
30-Jun-09 31-Jul-08 30-Jun-09 31-Jul-08
------------ ------------ --------------------------
Revenue $ 7,249 $ 4,834 $ 13,918 $ 10,890

Cost of goods sold 2,733 2,742 5,671 5,683
------------ ------------ --------------------------

Gross profit 4,516 2,092 8,247 5,207
------------ ------------ --------------------------

Gross margin 62.30% 43.28% 59.25% 47.81%

Expenses
Sales and marketing 2,109 1,910 4,044 4,016
Research and
development 1,227 1,124 2,495 2,189
General and
administrative 848 1,537 1,606 2,530
Amortization 156 137 303 248
------------ ------------ --------------------------

4,340 4,708 8,448 8,984

------------ ------------ --------------------------
Gain/(loss) before
other items 176 (2,616) (201) (3,777)

Other items
Interest and other
(expenses)/income (5) 47 81 134
Foreign exchange
(loss)/gain (341) 159 (143) 114
Loss in the fair
value of long term
investments
(Note 6) - - - (831)
Gain on
restructuring of
long term
investments
(Note 6) - - 207 -
------------ ------------ --------------------------
Net loss and
comprehensive loss
for the period $ (169) $ (2,410) $ (54) $ (4,360)
------------ ------------ --------------------------

Deficit, beginning
of period (42,934) (35,050) (43,049) (32,654)
Loss for the period (169) (2,410) (54) (4,360)
Shares repurchased -
excess of purchase
price over carrying
value - - - (446)

------------ ------------ --------------------------
Deficit, end of
period $ (43,103) $ (37,460) $ (43,103) $ (37,460)
------------ ------------ --------------------------
------------ ------------ --------------------------

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

Basic and fully
diluted loss per
share $ (0.00) $ (0.04) $ (0.00) $ (0.08)
Weighted average
number of shares
outstanding during
the period 58,178,161 57,746,204 58,080,133 57,842,843


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



WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts in thousands of Canadian dollars)
(Unaudited)

Three months ended Six months ended
30-Jun-09 31-Jul-08 30-Jun-09 31-Jul-08
-------------------------- --------------------------
Operating Activities
Net loss for the
period $ (169) $ (2,410) $ (54) $ (4,360)
Add items not
affecting cash:
Amortization 156 137 303 248
Stock based
compensation 90 93 386 530
Amortization of
leasehold
inducement (28) (25) (62) (42)
Loss in the fair
value of
long term
investments - - - 831
-------------------------- --------------------------

49 (2,205) 573 (2,793)
Changes in non-cash
working capital
items related to
operations:
Accounts receivable (1,005) 1,241 (78) 474
Inventory 201 (1,534) 509 (1,657)
Prepaid expense and
deposits (205) (149) (273) (267)
Accounts payable and
accrued liabilities (50) 1,506 195 (1,057)
Deferred Revenue (349) (57) (46) 3
Deferred lease
inducement - 3 244 473
-------------------------- --------------------------

(1,359) (1,195) 1,124 (4,824)
-------------------------- --------------------------
Financing Activities
Common shares
issued, net of costs 4 53 35 80
Shares repurchased - - - (671)
Repayment of bank
loan (1,000) - (1,000) -
Borrowing - against
long term
investments 290 - 1,710 -
-------------------------- --------------------------

(706) 53 745 (591)
-------------------------- --------------------------\

Investing Activities
Purchase of property
and equipment (48) (184) (190) (367)
-------------------------- --------------------------

(48) (184) (190) (367)
-------------------------- --------------------------

Net (decrease)
increase in cash
during the period (2,113) (1,327) 1,679 (5,782)

Cash and cash
equivalents,
beginning of period 7,681 8,573 3,889 13,028
-------------------------- --------------------------

Cash and cash
equivalants, end
of period $ 5,568 $ 7,246 $ 5,568 $ 7,246
-------------------------- --------------------------
-------------------------- --------------------------

Cash and cash
equivalants
consist of:
Cash $ 5,568 $ 7,246 $ 5,568 $ 7,246
-------------------------- --------------------------
-------------------------- --------------------------

Supplemental cash
flow information
Interest paid $ 8 $ 2 $ 18 $ 2
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.

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