Pennsylvania
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0-22920
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11-2948749
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----------------
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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99.1
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Press Release, dated May 2, 2012
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99.1
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Press Release, dated May 2, 2012
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Three Months Ended
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March 31
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2012
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2011
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Recurring revenue and support
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10.1 | 9.0 | ||||||
Embedded device and hardware revenue
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4.4 | 4.8 | ||||||
Gross margin
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46.7 | % | 44.2 | % | ||||
Non-GAAP earnings
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1.6 | 1.2 | ||||||
Non-GAAP earnings per fully diluted share (EPS)
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0.10 | 0.08 | ||||||
GAAP earnings*
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321,000 | 230,000 | ||||||
GAAP earnings per fully diluted share (EPS)
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0.02 | 0.01 | ||||||
New subscriptions
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83,000 | 53,000 | ||||||
Total subscriptions
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1,521,000 | 1,224,000 |
·
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During the quarter ended March 31, 2012, the Company added 83,000 subscriptions, as compared to 53,000 subscriptions added in the first quarter of 2011.
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·
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Reported revenues of $14.5 million in the first quarter of 2012, compared to $13.8 million in first quarter of 2011. During the quarter ended March 31, 2012, the Company reported recurring revenues of $10.1 million, up 12% from $9.0 million during the first quarter of 2011. Total revenues of $14.5 million include $68,000 generated by ‘Other Services’ in the three months ended March 31, 2012 compared to $301,000 during the same period in 2011. Given the immaterially of this segment, it will no longer be separately categorized in the Statement of Operations.
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Consolidated gross margin for the three months ended March 31, 2012 was 46.7% compared to 44.2% in the first quarter in 2011, an improvement due to revenue mix and contribution margin.
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Total GAAP operating expenses were $6.4 million for the three months ended March 31, 2012 compared to $5.8 million in the first quarter of 2011. Total non-GAAP operating expenses, excluding non-cash compensation expenses were $6.0 million during the first quarter of 2012 compared to $5.6 million in the year ago period. The year over year increase in operating expense was primarily due to additional investment in engineering resources to support future growth.
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GAAP net earnings for the three months ended March 31, 2012 were $321,000 or $0.02 per fully diluted share compared to $230,000 or $0.01 per fully diluted share last year, a 40% increase.
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Non-GAAP net earnings for the three months ended March 31, 2012 were $1.6 million or $0.10 per fully diluted share compared to $1.2 million or $0.08 per fully diluted share during the first quarter of 2011, an improvement of 30%. A reconciliation of this measure to GAAP results has been provided in the financial table below and further discussion of this measure as compared to GAAP is included elsewhere in the press release.
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As of March 31, 2012, Numerex reported cash and cash equivalents of $9.2 million and long-term debt of $4.2 million.
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Unveiled Numerex new Location-Based Services (LBS) platform, which provides enterprises with secure, scalable solutions for monitoring, tracking and recovering a wide variety of mobile assets. This new platform addresses the needs of agriculture, transportation, construction and many other industries seeking to rapidly implement cost-effective tracking and monitoring solutions for mobile or semi-mobile assets.
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Launched Numerex M2M interactive platform. The new capabilities - including web services application program interfaces, website integration, and integrated smartphone applications - are part of the highly configurable, intelligent, cloud-based Platform as a Service (PaaS) that supports interactive data, location, and messaging services.
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Received the 2011 Product of the Year Award from Satellite Spotlight, a leading website delivering satellite technology news, for Numerex Satellite FLEX™.
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Selected as one of the Top 40 Innovative Technology Companies in Georgia by the Technology Association of Georgia (TAG), the state's leading association dedicated to the promotion and economic advancement of Georgia's technology industry.
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Numerex Corp.
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Condensed Consolidated Statement of Operations
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(In thousands, except per share data)
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(Unaudited)
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Three Months Ended
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Q1, 2012 vs. Q1, 2011
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03/31/12
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03/31/11
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Change
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% Change
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Net revenues:
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Recurring revenue and support
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$ | 10,108 | $ | 8,995 | $ | 1,113 | 12 | % | ||||||||
Embedded devices & hardware
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4,424 | 4,773 | (349 | ) | -7 | % | ||||||||||
Total net revenues:
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14,532 | 13,768 | 764 | 6 | % | |||||||||||
Cost of recurring revenue and support
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4,130 | 3,756 | 374 | 10 | % | |||||||||||
Cost of embedded devices & hardware
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3,619 | 3,926 | (307 | ) | -8 | % | ||||||||||
Gross Profit
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6,783 | 6,086 | 697 | 11 | % | |||||||||||
46.7 | % | 44.2 | % | |||||||||||||
Sales and marketing expenses
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2,072 | 2,235 | (163 | ) | -7 | % | ||||||||||
General, administrative and legal expenses
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2,688 | 2,212 | 476 | 22 | % | |||||||||||
Engineering and development expenses
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805 | 594 | 211 | 36 | % | |||||||||||
Depreciation and amortization
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815 | 775 | 40 | 5 | % | |||||||||||
Operating earnings
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403 | 270 | 133 | 49 | % | |||||||||||
Interest expense
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(77 | ) | (26 | ) | (51 | ) | 196 | % | ||||||||
Other income
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(3 | ) | - | (3 | ) |
nm
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Earnings before tax
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323 | 244 | 79 | 32 | % | |||||||||||
Provision for income tax
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2 | 14 | (12 | ) | -86 | % | ||||||||||
Net earnings
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$ | 321 | $ | 230 | $ | 91 | 40 | % | ||||||||
Basic earnings per common share
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$ | 0.02 | $ | 0.02 | ||||||||||||
Diluted earnings per common share
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$ | 0.02 | $ | 0.01 | ||||||||||||
Number of shares used in per share calculation
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Basic
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15,189 | 14,985 | ||||||||||||||
Diluted
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15,872 | 15,763 |
Consolidated Balance Sheets
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(In thousands)
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March 31,
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December 31,
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2012
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2011
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unaudited
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 9,012 | $ | 9,547 | ||||
Restricted cash
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221 | 221 | ||||||
Accounts receivable, less allowance for doubtful accounts of $273
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at March 31, 2012 and $236 at December 31, 2011:
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6,568 | 6,846 | ||||||
Note receivable
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166 | 165 | ||||||
Inventory net of provision of $568 at March 31, 2012 and $578 at December 31, 2011
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6,537 | 7,057 | ||||||
Prepaid expenses and other current assets
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1,536 | 957 | ||||||
TOTAL CURRENT ASSETS
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24,040 | 24,793 | ||||||
Property and equipment, net
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1,333 | 1,252 | ||||||
Goodwill, net
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23,787 | 23,787 | ||||||
Other intangibles, net
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4,575 | 4,901 | ||||||
Software, net
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3,567 | 3,388 | ||||||
Other assets - long term
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3,241 | 3,307 | ||||||
Deferred tax asset - long term
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- | - | ||||||
TOTAL ASSETS
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$ | 60,543 | $ | 61,428 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 6,073 | $ | 8,239 | ||||
Other current liabilities
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1,312 | 1,392 | ||||||
Note payable
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2,200 | 1,200 | ||||||
Deferred revenues
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1,151 | 1,317 | ||||||
Obligations under capital leases
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120 | 237 | ||||||
TOTAL CURRENT LIABILITIES
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10,856 | 12,385 | ||||||
LONG TERM LIABILITIES
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Note payable - long term
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4,200 | 4,500 | ||||||
Obligations under capital leases and other long-term liabilities
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- | - | ||||||
Other long term liabilities
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332 | 346 | ||||||
TOTAL LONG TERM LIABILITIES
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4,532 | 4,846 | ||||||
COMMITMENTS AND CONTINGENCIES (Note M)
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SHAREHOLDERS’ EQUITY
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Preferred stock - no par value; authorized 3,000; none issued
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- | - | ||||||
Class A common stock - no par value, authorized 30,000, issued 16,881
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shares at March 31, 2012 and 16,691 shares at December 31, 2011;
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outstanding 15,320 shares at March 31, 2012 and 15,143 shares
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at December 31, 2011
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- | - | ||||||
Class B common stock – no par value; authorized 5,000,000; none issued
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- | - | ||||||
Additional paid-in-capital
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67,289 | 66,634 | ||||||
Treasury stock, at cost, 1,562 shares on March 31, 2012 and December 31, 2011
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(8,136 | ) | (8,136 | ) | ||||
Accumulated other comprehensive earnings (loss)
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(31 | ) | (13 | ) | ||||
Retained deficit
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(13,967 | ) | (14,288 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
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45,155 | 44,197 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 60,543 | $ | 61,428 |
Reconciliation of Non-GAAP Measures
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Three Months Ended
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March 31,
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2012
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2011
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(unaudited)
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Net earnings
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$ | 321 | $ | 230 | ||||
Non-cash compensation
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421 | 193 | ||||||
Depreciation and amortization
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815 | 775 | ||||||
Net earnings before non-cash items
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$ | 1,557 | $ | 1,198 | ||||
Basic non-GAAP earnings per common share
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$ | 0.10 | $ | 0.08 | ||||
Diluted non-GAAP earnings per common share
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$ | 0.10 | $ | 0.08 | ||||
Number of shares used in per share calculation
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Basic
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15,189 | 14,985 | ||||||
Diluted
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15,872 | 15,763 |