WebTech Wireless Inc.
TSX : WEW

WebTech Wireless Inc.

June 13, 2008 16:01 ET

WebTech Wireless Reports a Record $6 Million in Revenue for Q3 FY 2008 and Restates Q1 and Q2 Results Due to ABCP

BURNABY, BRITISH COLUMBIA--(Marketwire - June 13, 2008) - WebTech Wireless Inc. (TSX:WEW), a leading supplier of mobile telematics, today reported revenue of $6.0 million for the quarter ended April 30, 2008 for nine months year-to-date revenue of $16 million. Reported results represent an increase of 54% over prior year same quarter revenue of $3.9 million and an increase of 39% over prior year, year-to-date revenue of $11.5 million. Net loss for the quarter was $1.9 million (($0.03) per common share) compared with a loss of $18.7 million (($0.35) per common share) for the prior comparable quarter. Year to date loss is $5.4 million (($0.09) per common share) vs. a prior year to date loss of $19.0 million (($0.36) per common share).

Revenues increased in all markets except South America, continuing a trend seen in Q1 and Q2 of this year. For the first time ever, European sales exceeded $1 million in the quarter for a year on year increase in the quarter of 35%, and North American sales at $3.6 million were 34% above the prior comparable quarter. Sales to the Company's new distributor in Brazil also contributed to the significant growth in the quarter.

The Company reported a gross profit margin for the quarter which was consistent with standard historical rates at 51% compared with 64% for the prior year quarter. The prior year quarter was higher than average due to a higher than normal mix of high margin subscription revenue in that period. For the nine month period, gross profit margin was reported as 51% vs. 53% for the prior year.

The Company has previously reported that it expected to report a loss of as high as $2.3 million in the quarter on certain Asset Backed Commercial Paper ("ABCP") it holds. The actual loss of $2.3 million from this ABCP has been booked year to date and is being reported as follows: Q3 - $0.8 million, Q2 - $0.9 million and Q1 - $0.6 million. As the recognition of the losses for Q2 and Q1 were not previously reported in those quarters, the financial statements for those quarters have been restated. The reclassification of the ABCP from short term to long term assets is also reflected in the restated financial statements.

At quarter end, the Company reported total assets of $29 million (July 31, 2007: $37 million) and working capital of $22 million (July 31, 2007: $32 million).

"We are reporting revenues of $6 million for the quarter - our largest ever, and our year-to-date revenue of $16 million puts us ahead of the revenue reported for all of last year," said Scott Edmonds, Chief Financial Officer. "While we are reporting a loss - largely due to the impairment of our ABCP and non-recurring legal and related fees, we continue to expand our geographical reach and to contain growth in expenses."

The Company announces that it will hold a conference call on June 16, 2008 at 8:00 AM 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 1-800-931-6429 or 1-212-231-2902 (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.

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 000's)

30-Apr-08 31-Jul-07
--------- ---------
(Unaudited)

ASSETS
Current
Cash and cash equivalents $ 8,573 $ 22,344
Accounts receivable, net of allowance 5,586 4,128
Inventory, net of allowance 8,536 7,640
Prepaid expenses and deposits 982 1,583
-------- --------
23,678 35,695

Property and equipment (Note 7) 1,471 1,021
Property under development (Note 7) 205 -
Long term investments (Note 8) 3,669 -
-------- --------
$ 29,023 $ 36,716
-------- --------
-------- --------

LIABILITIES
Current
Accounts payable and accrued liabilities $ 1,718 $ 3,533
Current portion of deferred revenue 428 260
-------- --------
2,146 3,793

Long term
Deferred lease inducement 556 110
Deferred revenue 105 -
-------- --------
661 110

2,807 3,903
-------- --------

SHAREHOLDERS' EQUITY
Share capital (Note 9) 59,544 60,142
Contributed surplus (Note 10) 1,721 858
Deficit (35,050) (28,187)
-------- --------

26,216 32,813
-------- --------
$ 29,023 $ 36,716
-------- --------
-------- --------

Commitments (Note 14)

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, COMPREHENSIVE LOSS AND DEFICIT
(Amounts in 000's except per share amounts)
(Unaudited)

Three months ended Nine months ended
30-Apr-08 30-Apr-07 30-Apr-08 30-Apr-07
--------- --------- --------- ---------

Revenue $ 6,056 $ 3,922 $ 15,976 $ 11,468

Cost of goods sold 2,941 1,408 7,868 5,345
--------- --------- --------- ---------

Gross profit 3,115 2,514 8,108 6,123
--------- --------- --------- ---------

Gross margin 51.44% 64.10% 50.75% 53.39%

Expenses
Marketing and sales 2,106 1,101 5,134 3,112
Research and development 1,065 1,000 2,811 2,510
General and Administration 993 920 2,979 2,145
Amortization 111 106 386 271
--------- --------- --------- ---------

4,275 3,127 11,310 8,038

--------- --------- --------- ---------
Loss before other items (1,160) (613) (3,202) (1,915)

Other items
Interest income 87 447 419 622
Foreign exchange (loss) (45) (1,384) (269) (616)
Loss in the fair value of
long term investments
(Note 8) (831) - (2,331) -
Inventory impairment - (4,063) - (4,063)
Loss from inventory shipped - (7,814) - (7,814)
Impairment of loan
receivable - (5,251) - (5,251)
--------- --------- --------- ---------

--------- --------- --------- ---------
Net loss and
comprehensive loss
for the period $ (1,949) $ (18,678) $ (5,383) $ (19,037)
--------- --------- --------- ---------

Deficit, beginning of
the period (32,655) (2,196) (28,187) (1,837)
Loss for the period (1,949) (18,678) (5,383) (19,037)
Shares repurchased
- excess of purchase
price over carrying
value (446) - (1,480) -

--------- --------- --------- ---------
Deficit, end of period $(35,050) $ (20,874) $(35,050) $ (20,874)
--------- --------- --------- ---------
--------- --------- --------- ---------

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

Basic and fully diluted
(loss) earnings per share $ (0.03) $ (0.35) $ (0.09) $ (0.36)
Weighted average shares
outstanding during
the year 56,647,691 57,798,117 58,155,326 52,171,488

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 Nine months ended
30-Apr-08 30-Apr-07 30-Apr-08 30-Apr-07
--------- --------- --------- ---------

Operating Activities
Net loss for the period $ (1,949) $ (18,678) $ (5,383) $ (19,037)
Add items not affecting cash:
Amortization 111 98 386 271
Stock based compensation 437 106 931 271
Amortization of leasehold
inducement (17) - (24) -
Loss in the fair value of
long term investments
(Note 8) 831 - 2,331 -
Inventory impairment - 4,063 - 4,063
Loss on inventory shipped - 7,814 - 7,825
Impairment of loan
receivable - 5,262 - 5,251
--------- --------- --------- ---------

(587) (1,335) (1,759) (1,356)

Changes in non-cash working
capital items related to
operations:
Accounts receivable (768) 1,015 (1,458) (43)
Inventory (124) (1,899) (896) (5,656)
Prepaid expense and
deposits (117) (4,257) 601 (7,814)
Inventory shipped
(unrecognized revenue) - 1,728 - (2,518)
Accounts payable and
accrued liabilities (2,563) (579) (1,815) (48)
Deferred lease inducement 470 - 470 -
Deferred Revenue 60 (456) 273 129
--------- --------- --------- ---------

(3,629) (5,783) (4,584) (17,306)
--------- --------- --------- ---------

Financing Activities
Common shares issued, net
of costs 27 310 180 38,570
Shares repurchased (Note 9) (671) - (2,326) -
Loan receivable - - - (2,387)
--------- --------- --------- ---------

(644) 310 (2,146) 36,183
--------- --------- --------- ---------

Investing Activities
Purchase of intangible
assets - (24) - (81)
Purchase of capital
assets (19) (151) (594) (572)
Purchase of property
under development (164) - (448) -
Increase in long term
investment - - (6,000) -
--------- --------- --------- ---------

(182) (175) (7,041) (653)
--------- --------- --------- ---------

Net increase (decrease)
in cash during the period (4,455) (5,648) (13,771) 18,224

Cash and cash equivalents,
beginning of period 13,028 34,511 22,344 10,639
--------- --------- --------- ---------

Cash and cash equivalents,
end of period $ 8,573 $ 28,863 $ 8,573 $ 28,863
--------- --------- --------- ---------
--------- --------- --------- ---------

Cash and cash equivalents
consist of:
Cash $ 8,573 $ 28,863 $ 8,573 $ 28,863

--------- --------- --------- ---------
$ 8,573 $ 28,863 $ 8,573 $ 28,863
--------- --------- --------- ---------
--------- --------- --------- ---------

Supplemental cash flow
information
Interest paid $ (0) $ - $ 1 $ -
Income taxes paid - - - -

Noncash Transactions
Transfer of property
under development to
property and equipment $ - $ - $ 243 $ -

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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