Wireless Matrix Corporation
TSX : WRX

Wireless Matrix Corporation

September 11, 2008 08:01 ET

Wireless Matrix Achieves 2nd Consecutive Quarter of Net Income

RESTON, VIRGINIA--(Marketwire - Sept. 11, 2008) - Wireless Matrix Corporation (TSX:WRX), the leading provider of wireless data solutions targeting field service organizations is pleased to provide the results for its three months ended July 31, 2008 (first quarter of fiscal 2009).

All currency expressed in U.S. dollars.

Wireless Matrix continued to strengthen its leadership position in the mobile resource management space through increased adoption of its software-as-a-service solution suite, FleetOutlook. FleetOutlook has attracted key enterprise clients resulting in a 14% increase in total subscribers over the first quarter 2008 and 2,654 gross subscriber additions with sales wins across all vertical markets and service lines. This growth in subscribers fueled a 25% increase in service revenue and generated $1,022,000 in adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") for the quarter. The Corporation also achieved $371,000 in net income for the three months ended July 31, 2008 (first quarter of fiscal 2009), an increase over the prior year's first quarter of 193%.

"The first quarter of fiscal 2009 was another quarter of strong execution for Wireless Matrix" said J. Richard Carlson, president and chief executive officer of Wireless Matrix. "Despite challenges in the overall economy, we grew our top line revenue and our higher margin service revenues by double digits leading to a 307% increase in adjusted EBITDA, our second consecutive quarter of net income and strong cash flows. Most importantly, enterprise clients continue to embrace our application suite, especially those concerned with high fuel prices."

The Corporation's feature-rich FleetOutlook application has lead to sizable subscriber gains to end the first quarter of fiscal 2009 with 65,508 application and data communication subscribers, a growth of 16% in application subscribers alone from the same period last year. During the quarter, Wireless Matrix experienced growth in each of its key vertical markets. The quarter included subscriber additions in the rail industry from major operators including CSX and Union Pacific; additional activations in the cable & broadband space from Cable One and Time Warner; further penetration of the utility vertical from Dominion Resources and several rural cooperatives; and additions in other vertical markets including the oil and gas sector.

"Many companies have adopted Wireless Matrix's solutions to reduce operating costs, particularly fuel costs which has hurt their operating results", said Maria C. Izurieta, chief financial officer of Wireless Matrix. "Our FleetOutlook solution suite includes easy-to-use tools which drive reduced fuel costs, creating a rapid return on our clients' investment which in turn has generated a healthy and growing sales pipeline for Wireless Matrix despite challenging economic times."

Other financial highlights include:

- Grew hosted applications subscribers base to over 37% of total subscribers, the Corporation's fastest growing segment.

- Generated recurring subscriber service revenue of $6,687,000, with growth over last year's comparable quarter of 25%. Of which, application revenues accounted for 27% of service revenues, an increase of 34% over the first quarter of fiscal year 2008.

- Total revenue growth of 17% over the first three months of fiscal 2008 to $9,214,000.

- Increased service gross margin to $4,958,000, an increase of 31% over the prior year's comparable quarter.

- Achieved adjusted EBITDA of $1,022,000 for the first quarter fiscal 2009, an increase over the prior fiscal year's first quarter of 307%.

- Generated net income for the first quarter 2009 of $371,000 and an increase of 193% over the net loss in the first quarter 2008 of $397,000.

- Drove cash flows from operations of $1,044,000, an improvement of $2,499,000 when compared with the same period in the last fiscal year.

- Grew the cash balance from $14,078,000 at the end of fiscal 2008 to $14,572,000 at the end of the first quarter fiscal 2009, resulting in a solid balance sheet.



Financial Highlights:

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All currency in thousands except per share and Three months ended,
ARPU data July 31,
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2008 2007
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Network services revenues $ 4,896 $ 4,018
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Application services revenue 1,791 1,332
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6,687 $ 5,350
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Hardware revenues 2,527 2,500
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Total revenues 9,214 7,850
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Gross margin 5,374 4,187
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Service gross margin % 74.1% 70.9%
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Hardware gross margin % 16.5% 15.7%
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Gross margin % 58.3% 53.3%
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Operating expenses 4,352 3,936
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Adjusted EBITDA 1,022 251
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Net income (loss) $ 371 $ (397)
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Basic and diluted (loss) income per share: $ 0.00 $ (0.01)
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Weighted average number of common shares
outstanding- basic 82,640,039 74,919,366
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Weighted average number of common shares
outstanding- diluted 83,383,214 74,919,366
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Cash balance $ 14,572 $ 12,727
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Working Capital 17,855 17,764
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Total subscribers 65,508 57,008
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Average Revenue Per Unit (ARPU) $ 33.46 $ 34.28
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About Wireless Matrix:

Wireless Matrix provides enterprise-class wireless data solutions for business-critical mobile and remote asset operations. The Corporation delivers real-time data services across cellular, satellite and WiFi networks; a variety of modems and hardware platforms; and transportation applications that increase productivity and reduce operating expenses with service fleet operations. Wireless Matrix is headquartered in Reston, VA, and has offices in San Francisco, CA, and Burnaby, British Columbia. For more information visit www.wrx-us.com.

Forward Looking Statements:

General information regarding the Corporation set forth in this document, including management's assessment of the Corporation's future plans and operations contains forward looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's and management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of estimates, effective integration of acquisitions, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources, ability to integrate and realize anticipated benefits from acquisitions, ability to resell third party network communications at favorable rates, and to effectively manage growth. The Corporation's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward looking statements will provide what, if any benefits to the Corporation. All data presented herein should be read in conjunction with the Corporation's regulatory filings, with the appropriate Securities Commission and SEDAR. These filings, including the Corporation's Annual Information Form ("AIF"), are located at www.sedar.com.

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

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