EX-99.1 3 e15407ex99-1.txt PRESS RELEASE Exhibit 99.1 Numerex Reports Second Quarter Results ATLANTA, Aug. 5 /PRNewswire-FirstCall/ -- Numerex Corp. (Nasdaq: NMRX), today announced net losses of $854 thousand for the second quarter of 2003 and $2.0 million year-to-date. These results compare to net losses of $1.7 million and $1.5 million for the comparable periods of 2002, including non-recurring acquisition costs of $1.7 million for the quarter and $1.7 million year-to-date. Fully diluted loss per share were $(.08) for the quarter and $(.18) year-to-date. This compares to fully diluted losses per share, including non-recurring acquisition costs, of $(.16) and $(.14) for the comparable periods of 2002. Net sales were $4.7 million for the quarter and $9.4 million year-to-date, compared to $7.5 million and $14.6 million for the comparable periods of 2002. Please see attached financial statements for more details. "The second quarter continued the growth in wireless data products and services that began earlier this year," stated Stratton Nicolaides, chairman and CEO of Numerex. "Unfortunately, this growth was masked by the further decline in our digital multimedia and networking business. However, early indications are that this decline will at least mitigate in the third quarter and should be combined with anticipated further growth from wireless data. In addition, the quarter was highlighted by two significant events. The first is related to our MobileGuardian product, which offers vehicle location information and security services. In May, we began a trial of MobileGuardian in certain locations of the nation's largest automotive dealership network. This trial proved successful and was followed, two weeks ago, with an announced agreement that provides point of sale access to all of their over 300 dealership locations. This is a critical milestone for Numerex in that it not only reinforces the credibility of our product, but also gives us access to a key distribution channel as we aggressively implement an accelerated rollout of Mobile Guardian. The second event that I want to highlight is that Numerex ended the second quarter 2003 with a combined higher cash balance and availability under our line of credit than at the end of the prior quarter. Specifically, at the end of the quarter, our cash and available line of credit totaled slightly higher than $1.7 million compared to a total of exactly $1.7 million at the end of March 2003. This was achieved by a combination of gross margin improvement, operating cost reductions and continued focus on reducing receivables. Ultimately, our goals continue to be to generate additional cash from operations and to further improve our liquidity by inventory reductions and non-core asset sales." Conference Call and Webcast Information Numerex will conduct a conference call today, August 5th, at 11:00 A.M., Eastern Daylight Time, accessible by calling (877) 822-9907 in the U.S. and Canada, or (706) 679-7183 international. A live Webcast of the call will also be available via Numerex's Web site at http://www.nmrx.com, under the Investor Relations section. A replay of the conference call will be available via Numerex's Web site beginning two hours after the call. About Numerex Numerex (Nasdaq: NMRX) is a technology company comprised of operating subsidiaries that develop and market a wide range of wireless and wireline communications products and services. The Company's primary focus is wireless data communications utilizing proprietary network technologies. Numerex primarily offers products and services in wireless data communications through Cellemetry(R) and Data1Source(TM), and digital multimedia through PowerPlay(TM). These services enable customers around the globe to monitor and move information for a variety of applications from home and business security to distance learning. In addition, the Company offers wireline alarm security products and services, as well as telecommunications network operational support systems. For more information on Numerex, please visit our Web site at: www.nmrx.com. This press release contains, and other statements may contain, forward-looking statements with respect to Numerex's 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: the failure to realize improvements on our digital multimedia and networking business; variations in quarterly operating results, delays in the development, introduction and marketing of new wireless products and services; customer acceptance of products and services; 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; 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's SEC reports identify additional factors that can affect forward-looking statements. NUMEREX CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) FOR THE THREE MONTH FOR THE SIX MONTH PERIOD ENDED JUNE 30, PERIOD ENDED JUNE 30, 2003 2002 2003 2002 (Unaudited) (Unaudited) (Unaudited) Net sales: Wireless Data Communications $3,154 $ 4,514 $6,040 $8,764 Digital Multimedia and Networking 1,204 2,735 2,749 5,371 Wireline Data Communications 362 259 617 467 Total net sales 4,720 7,508 9,406 14,602 Cost of sales 2,269 3,569 4,724 7,105 Depreciation and amortization 174 54 353 102 Gross Profit 2,277 3,885 4,329 7,395 Selling, general, and administrative expenses (see note below) 2,234 2,952 4,621 5,407 Research and development expenses 284 188 581 790 Depreciation and amortization 505 549 994 1,069 Costs related to non-recurring acquisition activity -- 1,714 -- 1,714 Operating loss (746) (1,518) (1,867) (1,585) Interest income and (expense), net (131) (57) (151) (92) Other income and (expense), net 36 3 79 38 Minority interest -- -- -- 326 Note payable, current (841) (1,572) (1,939) (1,313) Provision for income taxes 13 70 32 70 Net loss (854) (1,642) (1,971) (1,383) Preferred stock dividend -- 60 -- 120 Net loss applicable to common shareholders $(854) $(1,702) $(1,971) $(1,503) Basic loss per common share $(0.08) $(0.16) $ (0.18) $ (0.14) Diluted loss per common share $(0.08) $(0.16) $ (0.18) $ (0.14) Number of shares used in per share calculation Basic 10,785 10,729 11,083 10,656 Diluted 10,785 10,729 11,083 10,656 NUMEREX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) June 30, December 31, 2003 2002 (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $1,138 $2,137 Accounts receivable, net 3,223 4,459 Notes Receivable 505 823 Inventory 4,251 5,189 Prepaid expenses and other current assets 482 976 TOTAL CURRENT ASSETS 9,599 13,584 PROPERTY AND EQUIPMENT, NET 1,903 2,475 GOODWILL, NET 15,059 10,983 OTHER INTANGIBLES, NET 8,587 8,050 SOFTWARE, NET 1,436 1,963 OTHER ASSETS 774 56 TOTAL ASSETS $37,358 $37,111 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $3,703 $5,238 Other current liabilities 1,455 1,866 Note payable, current 3,500 -- Deferred revenues 814 819 Obligations under capital leases, current portion 710 710 TOTAL CURRENT LIABILITIES 10,182 8,633 LONG TERM LIABILITIES Obligations under capital leases and other long term liabilities 956 863 Note Payable 1,500 -- TOTAL LONG TERM LIABILITIES 2,456 863 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 13,176,259 on June 30, 2003 and 13,168,889 on December 31, 2002 36,775 36,769 Additional paid-in-capital 439 439 Treasury stock, at cost, 2,391,400 shares on June 30, 2003 and 1,766,400 on December 31, 2002 (10,197) (9,222) Class B common stock - no par value; authorized 5,000,000; none issued -- -- Accumulated other comprehensive income 36 (9) Retained earnings (2,333) (362) 24,720 27,615 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $37,358 $37,111 SOURCE Numerex Corp. -0- 08/05/2003 /CONTACT: Investor Relations, Alan B. Catherall of Numerex Corp., +1-770-485-2527/ /Web site: http://www.nmrx.com/ (NMRX) CO: Numerex Corp. ST: Georgia IN: CPR NET TLS SU: CCA ERN