8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2008

NUMEREX CORP.

(Exact Name of Issuer as Specified in Charter)

Pennsylvania	0-22920	11-2948749
--------------	------------	----------------
(State or other jurisdiction         of incorporation)	(Commission File Number)	(I.R.S. Employer   Identification No.)

1600 Parkwood Circle

Suite 500

Atlanta, Georgia

-------------------

(Address of principal executive offices)

30339

-----

(Zip code)

(770) 693-5950

--------------

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR   230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange

     Act (17 CFR 240.13e-4(c))

Item 2.02   Results of Operations and Financial Condition.

On November 6, 2008, Numerex Corp. (the “Company”) issued a press release announcing its financial results for the quarter ending September 30, 2008.  The text of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.   In the press release, the Company uses a non-GAAP financial measure, “non-GAAP earnings,” and includes a reconciliation of this measure to GAAP.  The Company believes that this presentation of non-GAAP earnings provides useful information relating to its financial condition and results of operations, which provides management and investors with a more complete understanding of the Company’s past performance and certain additional financial or business trends.  The Company believes that the line on the Company’s consolidated statement of operations entitled, “Net earnings,” is the most directly comparable GAAP measure to non-GAAP earnings.

The information contained in this Current Report (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, or incorporated by reference in any filing by the Company under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing.

Item 9.01   Financial Statements and Exhibits.

(d)       Exhibits.

99.1 Press Release, dated November 6, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                                           NUMEREX CORP.

Date:  November 6, 2008	/s/ Alan B. Catherall
	Alan B. Catherall
	Chief Financial Officer

Exhibit Index

99.1 Press Release, dated November 6, 2008

EX-99.1 CHARTER

Exhibit 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE

NUMEREX REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS

Company Surpasses 700,000 M2M Network Connections;

Records a 31% Year over Year Increase in Recurring Network Service Revenues

ATLANTA, November 6, 2008 - Numerex Corp. (NASDAQ: NMRX), aleading provider of full-service, highly secure machine-to-machine (M2M) network services and solutions, today announced financial results for the third quarter of 2008, reporting  net earnings of $77,000 compared to a net loss of $(217,000) for the comparable period of 2007. Basic and fully diluted earnings per share were $0.01 for the third quarter of 2008, which compares to basic and fully diluted losses per share of $(0.02) for the third quarter of 2007. Net earnings for the third quarter of 2008, excluding non-cash stock option compensation expense as well as amortization expense related to acquisitions (“non-GAAP” earnings), was $227,000 compared to a net loss of $(36,000) for the comparable quarter in 2007. All non-GAAP information is reconciled in the “Non-GAAP Condensed Consolidated Statement of Operations” table below.

Key financial results for the third quarter and first nine months of 2008 compared to the third quarter and first nine months of 2007:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2008		2007			2008			2007
Revenues (millions)	$	19.0	$	16.0		$	56.9		$	45.3
Net earnings (loss) (‘000)	$	77	$	(217	)	$	(323	)	$	(113	)
Net EPS	$	0.01	$	(0.02	)	$	(0.02	)	$	(0.01	)
Non-GAAP earnings (loss) (‘000)	$	227	$	(36	)	$	186		$	313
Non-GAAP EPS	$	0.02	$	(0.00	)	$	0.01		$	0.02

“We are pleased with the Company’s overall quarterly performance and to report strong M2M activity across our traditional and newly-opened markets,” said Stratton Nicolaides, Numerex chairperson and CEO. “We remain focused on business conducive to increasing our recurring service revenues and network connections while vigilantly controlling costs and strengthening our balance sheet. We continue to invest our resources – both human and capital – into initiatives that broaden our M2M deliverables. The acquisition of Ublip in October rounded out our service and software platforms, improving our market positioning as a single source provider of M2M solutions. Also, we were successful in reducing inventories and accounts receivable balances, significantly increasing our cash position during the quarter.”

Highlights since the release of the Company’s second quarter results include:

·   Continued strong growth of M2M service revenues. Numerex added a net 85,000 new network connections during the quarter and well over 200,000 additional network connections since the beginning of this year. The Company ended the quarter with 702,000 connections, reflecting 70% growth in its base compared to the third quarter of last year. This achievement is all the more impressive given that the majority of the connections this time last year were riding on analog networks, which have now been substantially decommissioned.

·   Completed the acquisition of Ublip, an M2M software and solutions company. It is believed that simplifying the deployment process is important to promoting sustainable growth in the M2M industry. Typically, customers must identify the hardware, select wireless networks, build communications software as well as develop the front-end web application - a complex, resource intensive, and time consuming process. Management expects that the Company’s enhanced technology platforms and newly acquired expertise will “jumpstart” the application development process, effectively shortening the development cycle and easing a customer’s experience in launching an application. As a result of this acquisition, Numerex reinforced its offerings and enhanced its position as a single source provider for the M2M industry.

·   Expanded relationships with emergency response providers using Numerex’s satellite solutions and initiated testing for cargo tracking project.

·   Strengthened the Company’s balance sheet by increasing its cash position at the end of the quarter to $8.6 million compared to $6.2 million at June 30th earlier this year. This growth was not only due to our improved operating results, but was also accomplished through improved collections of Accounts Receivable and reduced Inventory balances.

Net revenues in the third quarter of 2008 were $19.0 million compared to $16.0 million reported for same quarter last year, representing a 19% year-over-year growth and increased 9% sequentially from the $17.4 million posted in the second quarter of 2008.  Core wireless M2M revenues, which represented 88% of total revenues during the third quarter, were $16.7 million compared to $14.8 million for the third quarter of 2007 and $15.7 million for the second quarter of 2008 which represent relative growth rates of 13% and 7% respectively. M2M service revenues grew 31% in the quarter to $6.5 million from $5.0 million reported in the third quarter of 2007. The Company ended the third quarter with 702,000 network connections, a 70% increase over third quarter of last year. For the first nine months of this year, M2M service revenues grew to $18.8 million, a 44% improvement over the same period last year. Overall, the Company posted a 25% growth rate in its M2M business for the first nine months of this year. This includes hardware sales that had minimal growth year over year in a quarterly comparison and grew 16% for the comparable year over year nine-month period.

In the third quarter of 2008, the Company’s satellite division recorded higher revenues and improved performance progressively over the course of the year. However, the division still generated a pre-tax loss of over $300,000 for the quarter and over $1.8 million since the beginning of the year, half of which was recorded in the first quarter. A significant portion of this loss is attributable to legal fees associated with an action filed by the division’s former managers.

Gross margins for the third quarter of 2008 were 35.2% percent compared to 33.5% for the comparable period in 2007. The year-over-year improvement in gross margins is due to two factors. The first is a change in the overall revenue mix. In the third quarter of 2007, wireless service revenues were 33% of total wireless revenues compared to 39% in the third quarter of 2008. This increase drives an overall margin improvement since service revenues have a significantly higher gross margin than those achieved through the sale of hardware. In addition, hardware margins improved in the third quarter of 2008 because of significantly fewer lower-margin hardware units sold during the quarter related to the analog-to-digital transition and an increase in higher-margin digital multimedia and satellite unit sales. Gross margins were 36% in the prior sequential quarter since service revenue was a slightly higher portion of total revenue. However, we believe that service revenues will represent a higher percentage of the revenue mix in the fourth quarter of 2008 resulting in margin improvement.

Operating expenses were $6.1 million for the current quarter compared to $6.4 million for the second quarter of 2008 and $5.3 million incurred during the third quarter of 2007. Operating expenses decreased during the current quarter as a result of recently implemented cost control measures. Operating expenses increased year-over-year primarily due to additional legal fees and the consolidation of a full quarter of expenses associated with the acquisition of the satellite business. In accordance with Financial Accounting Standard No. 123 (R), the Company recorded non-cash stock option compensation costs of $280,000 in the third quarter of 2008 compared to $246,000 in the same quarter in 2007 and over $850,000 for the nine-month period ending September.

The Company’s balance sheet improved during the quarter with increased cash balances partially due to strong collections with a consequent reduction in DSO (“Days Sales Outstanding”) and an improvement in inventory turns. As a result, the current ratio as of September 30, 2008 was 2.2 to 1, a further improvement from the prior sequential quarter of 2.1 to 1. Shareholder’s equity increased 5.1% to $49.2 million compared to $46.9 as of December 31, 2007.

Mr. Nicolaides concluded, “We continue to look for new ways to expand our M2M business, both geographically and into new vertical markets. Our long-term focus of building streams of recurring service revenues has served us well, especially in tight credit and capital markets. Our outlook for our M2M business continues to be positive through the balance of the year and foreseeable future.”

Conference Call and Web Cast Information

Numerex will conduct a conference call on November 6th at 9.00 am Eastern Time, accessible by calling (866) 885-0439 in the United States and Canada or (904) 596-2360 for international. A live web cast of the call will also via the Numerex web site at http://www.numerex.com, under the Investor Relations section. A replay of the conference call will also be available via the Numerex web site beginning two hours after the call.

About Numerex

Numerex Corp. (NASDAQ: NMRX) provides the broadest choice of secure machine-to-machine (M2M) network services and solutions. Numerex delivers a depth of expertise and excellence through its M2M service platforms - Networx, Techworx, and Flexworx - that leading companies choose to power their M2M solutions. Numerex is the first M2M Company in North America to carry ISO 27001 certification – ISO’s highest information security benchmark that ensures data confidentiality, integrity and availability. The Company offers its M2M products and services through a variety of brands including Uplink, Orbit One, and Ublip. Numerex is headquartered in Atlanta, Georgia. For additional information, visit http://www.numerex.com. For information regarding Ublip, visit http://www.ublip.com.

This press release contains, and other statements may contain, forward-looking statements with respect to Numerex future financial or business performance, conditions or strategies and other financial and business matters, including expectations regarding growth trends and activities in the wireless data business. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "assume," "strategy," "plan," "outlook," "outcome," "continue," "remain," "trend," and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may," or similar expressions. Numerex cautions that these forward-looking statements are subject to numerous assumptions,

risks and uncertainties, which change over time. These forward-looking statements speak only as of the date of this press release, and Numerex assumes no duty to update forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements and future results could differ materially from historical performance.

The following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: our inability to reposition our business or technology platforms to capture greater recurring service revenues; difficulties associated with integrating new product lines or businesses, including Ublip; the risks that a substantial portion of revenues generated by our satellite division that are derived from government contracts may be terminated by the government at any time; unanticipated costs of legal proceedings; variations in quarterly operating results; delays in the development, introduction, integration and marketing of new wireless services; customer acceptance of services; continuing adverse economic conditions; changes in financial and capital markets; the inability to attain revenue and earnings growth in our wireless data business; changes in interest rates; inflation, deflation; the introduction, withdrawal, success and timing of business initiatives and strategies; competitive conditions; the inability to realize revenue enhancements; and extent and timing of technological changes. Numerex SEC filings identify additional factors that can affect forward-looking statements.

Numerex Corp.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
	Three Months Ended											Nine Months Ended
	September 30,											September 30,
	2008			2007			Change		% Change			2008			2007			Change			% Change
Net sales:
Hardware	$	11,632		$	10,185		$	1,447		14	%	$	35,745		$	29,573		$	6,172			21	%
Service		7,345			5,799			1,546		27	%		21,112			15,767			5,345			34	%
Total net sales		18,977			15,984			2,993		19	%		56,857			45,340			11,517			25	%
Cost of hardware sales		9,663			9,096			567		6	%		30,838			25,874			4,964			19	%
Cost of services		2,634			1,536			1,098		71	%		6,755			4,020			2,735			68	%
Gross Profit		6,680			5,352			1,328		25	%		19,264			15,446			3,818			25	%
		35.2	%		33.5	%							33.9	%		34.1	%
Selling, general, and administrative expenses		4,697			4,078			619		15	%		14,672			11,557			3,115			27	%
Research and development expenses		473			382			91		24	%		1,488			1,004			484			48	%
Bad Debt Expense		209			164			45		27	%		420			413			7			2	%
Depreciation and amortization		773			697			76		11	%		2,289			1,717			572			33	%
Operating earnings		528			31			497	nm				395			755			(360	)		-48	%
Interest expense		(331	)		(448	)		117	nm				(1,141	)		(949	)		(192	)	nm
Other income		5			(1	)		6	nm				2			(20	)		22		nm
Earnings (loss) before tax		202			(418	)		620	nm				(744	)		(214	)		(530	)	nm
Provision (benefit) for income tax		125			(201	)		326	nm				(421	)		(101	)		(320	)	nm
Net earnings (loss)	$	77		$	(217	)	$	294		-135	%	$	(323	)	$	(113	)	$	(210	)		186	%
Basic earnings per common share	$	0.01		$	(0.02	)						$	(0.02	)	$	(0.01	)
Diluted earnings per common share	$	0.01		$	(0.02	)						$	(0.02	)	$	(0.01	)
Number of shares used in per share calculation
Basic		13,742			13,187								13,735			13,117
Diluted		13,742			13,187								13,735			13,117

Numerex Corp.
Supplemental Sales Information
(in thousands)
(unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Net Sales:	2008		2007		Change		2008		2007		Change
Wireless Data Communications
Hardware	$	10,235	$	9,874	$	361	$	33,098	$	28,448	$	4,650
Service		6,486		4,963		1,523		18,831		13,096		5,735
Subtotal		16,721		14,837		1,884		51,929		41,544		10,385
Digital Multimedia, Networking and Wireline Security
Hardware		1,397		311		1,086		2,647		1,125		1,522
Service		859		836		23		2,281		2,671		(390	)
Subtotal		2,256		1,147		1,109		4,928		3,796		1,132
Total
Hardware		11,632		10,185		1,447		35,745		29,573		6,172
Service		7,345		5,799		1,546		21,112		15,767		5,345
Total net sales		18,977		15,984		2,993		56,857		45,340		11,517

Numerex Corp.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
	Three Months Ended									Nine Months Ended
	September 30, 2008									September 30, 2008
	GAAP						Non-GAAP			GAAP						Non-GAAP
	Results			Adjustments			Results			Results			Adjustments			Results
Net sales:
Hardware	$	11,632					$	11,632		$	35,745					$	35,745
Service		7,345						7,345			21,112						21,112
Total net sales		18,977						18,977			56,857						56,857
Cost of hardware sales		9,663						9,663			30,838						30,838
Cost of services		2,634						2,634			6,755						6,755
Gross Profit		6,680			-			6,680			19,264			-			19,264
		35.2	%					35.2	%		33.9	%					33.9	%
Selling, general, and administrative expenses		4,697			(280	)		4,417			14,672			(857	)		13,815
Research and development expenses		473						473			1,488						1,488
Bad debt expense		209						209			420						420
Earnings before interest, depreciation and amortization		1,301			280			1,581			2,684			857			3,541
Depreciation and amortization		773			(103	)		670			2,289			(363	)		1,926
Operating earnings		528			383			911			395			1,220			1,615
Interest expense		(331	)					(331	)		(1,141	)					(1,141	)
Other income		5						5			2						2
Earnings (loss) before tax		202			383			585			(744	)		1,220			476
Provision (benefit) for income tax		125			233			358			(421	)		711			290
Net earnings (loss)	$	77		$	150		$	227		$	(323	)	$	509		$	186
Basic earnings (loss) per common share	$	0.01					$	0.02		$	(0.02	)				$	0.01
Diluted earnings (loss) per common share	$	0.01					$	0.02		$	(0.02	)				$	0.01
Number of shares used in per share calculation
Basic		13,742						13,742			13,735						13,735
Diluted		13,742						13,742			13,735						13,735

(a) These Unaudited non-GAAP consolidated statements of operations are for informational purposes only and are not presented in accordance with GAAP.  The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statement of operations excludes stock options expense and amortization expense related to the acquisition of the assets of Airdesk, Inc. and Orbit One Communications, Inc.

Numerex Corp.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
	Three Months Ended									Nine Months Ended
	September 30, 2007									September 30, 2007
	GAAP						Non-GAAP			GAAP						Non-GAAP
	Results			Adjustments			Results			Results			Adjustments			Results
Net sales:
Hardware	$	10,185					$	10,185		$	29,573					$	29,573
Service		5,799						5,799			15,767						15,767
Total net sales		15,984						15,984			45,340						45,340
Cost of hardware sales		9,096						9,096			25,874						25,874
Cost of services		1,536						1,536			4,020						4,020
Gross Profit		5,352			-			5,352			15,446			-			15,446
		33.5	%					33.5	%		34.1	%					34.1	%
Selling, general, and administrative expenses		4,078			(246	)		3,832			11,557			(656	)		10,901
Research and development expenses		382						382			1,004						1,004
Bad debt expense		164						164			413						413
Earnings before interest, depreciation and amortization		728			246			974			2,472			656			3,128
Depreciation and amortization		697			(103	)		594			1,717			(159	)		1,558
Operating earnings (loss)		31			349			380			755			815			1,570
Interest expense		(448	)					(448	)		(949	)					(949	)
Other income		(1	)					(1	)		(20	)					(20	)
Earnings (loss) before tax		(418	)		349			(69	)		(214	)		815			601
Provision (benefit) for income tax		(201	)		168			(33	)		(101	)		389			288
Net earnings (loss)	$	(217	)	$	181		$	(36	)	$	(113	)	$	426		$	313
Basic earnings (loss) per common share	$	(0.02	)				$	(0.00	)	$	(0.01	)				$	0.02
Diluted earnings (loss) per common share	$	(0.02	)				$	(0.00	)	$	(0.01	)				$	0.02
Number of shares used in per share calculation
Basic		13,156						13,156			13,081						13,081
Diluted		13,156						13,156			13,780						13,780

(a) These Unaudited non-GAAP consolidated statements of operations are for informational purposes only and are not presented in accordance with GAAP.  The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statement of operations excludes stock options expense and amortization expense related to the acquisition of the assets of Airdesk, Inc. and Orbit One Communications, Inc.

Numerex Corp.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
	September 30,			December 31,
	2008			2007
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,550		$	7,425
Accounts receivable, less allowance for doubtful accounts of $1,300 at September 30, 2008 and $1,009 at December 31, 2007:		12,512			16,396
Inventory		8,645			10,059
Prepaid expenses and other current assets		1,709			1,885
Deferred tax asset		820			770
TOTAL CURRENT ASSETS		32,236			36,535
Property and equipment, net		1,730			2,003
Goodwill, net		26,116			22,603
Other intangibles, net		6,370			6,940
Software, net		3,346			3,486
Other assets - long-term		334			526
Deferred tax asset - long-term		2,397			2,005
TOTAL ASSETS	$	72,529		$	74,098
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	7,626		$	10,299
Other current liabilities		2,075			2,312
Note payable		2,568			2,568
Deferred revenues		2,290			1,328
Obligations under capital leases		35			44
TOTAL CURRENT LIABILITIES		14,594			16,550
LONG TERM LIABILITIES
Obligations under capital leases and other long-term liabilities		425			486
Note payable - net of current portion		8,271			10,197
TOTAL LONG TERM LIABILITIES		8,696			10,683
COMMITMENTS AND CONTIGENCIES		-			-
SHAREHOLDERS’ EQUITY
Preferred stock - no par value; authorized 3,000,000; none issued		-			-
Class A common stock - no par value, authorized 30,000,000, issued 14,928,101
shares at September 30, 2008 and 14,706,101 shares at December 31, 2007		49,290			47,455
Class B common stock – no par value; authorized 5,000,000; none issued		-			-
Additional paid-in-capital		4,285			3,427
Treasury stock, at cost, 1,185,809 shares on September 30, 2008 and
December 31, 2007		(5,053	)		(5,053	)
Accumulated other comprehensive earnings (loss)		(1	)		(6	)
Retained earnings		718			1,042
TOTAL SHAREHOLDERS' EQUITY		49,239			46,865
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	72,529		$	74,098