Wireless Matrix Corporation
TSX : WRX

Wireless Matrix Corporation

March 12, 2009 08:01 ET

Wireless Matrix Achieves Record Revenue of $9,930,000 Positive Cash Flows and Net Income

RESTON, VIRGINIA--(Marketwire - March 12, 2009) - Wireless Matrix Corporation (TSX:WRX), the leading provider of mobile resource management solutions targeting field service organizations is pleased to provide the results for its three and nine months ended January 31, 2009 (third quarter of fiscal year 2009).

All currency expressed in U.S. dollars.

Wireless Matrix strengthened its balance sheet and financial metrics during the third quarter 2009 generating cash flows from operations of $2,178,000, an improvement of $541,000 when compared with the same period in the last fiscal year and ended the quarter with a cash balance of $17,933,000 up from $14,078,000 at the end of fiscal year 2008.

During this period of financial uncertainty, Wireless Matrix has seen continued increased interest and adoption of its software-as-a-service solution suite, FleetOutlook®, resulting in a 7% increase in total subscribers over the third quarter of fiscal year 2008 to approximately 67,000 subscribers and has continued to maintain a healthy, high quality sales pipeline. This increase in subscribers has resulted in:

- Recurring service revenue of $6,862,000, a 7% increase over the prior year comparable period.

- Total revenue growth of 5% over the third quarter of fiscal year 2009 to $9,930,000.

- Service gross margin of $5,046,000, an increase of 10% over the prior year's comparable quarter.

- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1,310,000, an increase over the prior fiscal year's third quarter of 71% and the fourth consecutive quarter of adjusted EBITDA over the $1,000,000 threshold, a new record for the Corporation.

- Net income for the third quarter fiscal 2009 of $338,000, an increase of 493% over the net loss in the third quarter fiscal 2009 of $86,000.

"Clients continue to embrace our application suite to reduce operating costs and drive productivity gains, and our sales pipeline remains robust due in large part to the rapid returns our solutions offer." said J. Richard Carlson, president and chief executive officer of Wireless Matrix. "We are further investing in research and development to ensure sustained innovations to drive further productivity gains for our clients. To that end, we have released into production our first low cost GPS wireless broadband device, the Reporter 100, and will soon release an in-cab personal navigation solution."

Wireless Matrix has also reiterated its annual financial guidance for fiscal year 2009. As part of this guidance, the Corporation targeted service revenues of at least $27,000,000, representing a double-digit increase over fiscal year 2008, and adjusted EBITDA between $3,000,000 and $4,000,000, a 60% growth year-over-year. The Corporation is on track to meet these levels through the addition of long-term revenue contracts entered into during fiscal year 2009 and the ongoing growth of the sales pipeline.

The first nine months of fiscal year 2009 included application and data subscriber additions in the rail industry from existing major operators like Union Pacific; additional activations from Time Warner in the cable and broadband space; further penetration of the utility vertical and several rural cooperatives; and additions in other vertical markets including the oil and gas sector.

However, subscriber growth has been at a slower rate than initially identified by Wireless Matrix due to the turbulent economy. The Company has announced several sales win subsequent to quarter end and believes it has developed a strong sales pipeline that will lead to consistent subscriber additions in the next several quarters. The previously projected subscriber levels are now expected to be reached in the first quarter of fiscal year 2010.

"We are extremely proud to have produced record financial results that provide us the financial strength to grow through the overall economic downturn. Our long-term contracts with stable Fortune 500 clients, coupled with a strong gross margin services business and a fixed infrastructure have allowed us to create ongoing positive cash flows, despite slower than anticipated growth in our subscriber base." said Maria C. Izurieta, chief financial officer of Wireless Matrix.



Financial Highlights:

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All currency in
thousands except per Three months ended Nine months ended
share and ARPU data January 31, January 31,
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2009 2008 2009 2008
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Network services
revenues $ 5,041 $ 4,605 $ 14,870 $ 13,038
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Application services
revenue 1,821 1,798 5,365 4,684
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6,682 6,403 20,235 17,722
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Hardware revenues 3,068 3,092 8,610 8,722
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Total revenues 9,930 9,495 28,845 26,444
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Gross margin 5,607 5,035 16,442 13,894
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Service gross margin % 74% 72% 73% 71%
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Hardware gross margin % 18% 15% 18% 16%
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Gross margin % 57% 53% 57% 53%
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Operating expenses 4,297 4,269 13,070 12,759
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Adjusted EBITDA 1,310 766 3,372 1,135
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Net income (loss) $ 338 $ (85) $ 1,192 $ (1,329)
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Basic and diluted
(loss) income per
share: $ 0.00 $ (0.00) $ 0.01 $ (0.02)
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Weighted average
number of common
shares outstanding -
basic 82,447,331 82,074,833 82,569,095 79,686,626
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Weighted average
number of common
shares outstanding -
diluted 82,974,703 82,074,833 83,183,909 79,686,626
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Cash balance $ 17,933 $ 12,232 $ 17,933 $ 12,232
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Working Capital 13,908 12,164 13,908 12,164
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Total subscribers 66,933 62,350 66,933 62,350
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Average Revenue Per
Unit (ARPU) $ 33.15 $ 33.55 $ 33.19 $ 33.34
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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.wirelessmatrix.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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