-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T4veT9d6gI0VHZLLjR0Iw8M36ij/oojPMF/K+rBPqAdY/uYwWUVsOmG0bVAZYFDH T2Va5oRGVT1lsOYxw1EgQQ== 0000950144-04-007740.txt : 20040805 0000950144-04-007740.hdr.sgml : 20040805 20040805085637 ACCESSION NUMBER: 0000950144-04-007740 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040805 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUMEREX CORP /PA/ CENTRAL INDEX KEY: 0000870753 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 112948749 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22920 FILM NUMBER: 04953237 BUSINESS ADDRESS: STREET 1: 1600 PARKWOOD CIRCLE STREET 2: SUITE 200 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 770-693-5950 MAIL ADDRESS: STREET 1: 1600 PARKWOOD CIRCLE STREET 2: SUITE 200 CITY: ATLANTA STATE: GA ZIP: 30339 8-K 1 g90338e8vk.htm NUMEREX CORP. NUMEREX CORP.
Table of Contents

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): August 5, 2004

NUMEREX CORP.

(Exact Name of Issuer as Specified in Charter)
         
Pennsylvania   0-22920   11-2948749
(State or other
jurisdiction or
incorporation) 		  (Commission File
Number) 		  (I.R.S. Employer
Identification No.)

1600 Parkwood Circle
Suite 200
Atlanta, Georgia
(Address of principal executive offices)

30339
(Zip code)

(770) 693-5950
(Registrant’s telephone number, including area code)

 

TABLE OF CONTENTS

SIGNATURES
EX-99.1 PRESS RELEASE DATED AUGUST 5, 2004

Table of Contents

Item 7. Financial Statements and Exhibits.

(c) Exhibits

99.1 Text of Press Release, dated August 5, 2004

Item 12. Results of Operations and Financial Condition.

On August 5, 2004, Numerex Corp. issued a press release announcing its financial results for the second quarter ending June 30, 2004. The press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

     
Exhibits
99.1
  Press Release dated August 5, 2004

 

Table of Contents

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.
 
 
  (Registrant)
 
    
  /s/ Alan Catherall
 
 
  Alan Catherall
Chief Financial Officer

Date: August 5, 2004

 

EX-99.1 2 g90338exv99w1.txt EX-99.1 PRESS RELEASE DATED AUGUST 5, 2004 EXHIBIT 99.1 INVESTOR RELATIONS CONTACT: Alan B. Catherall 770-485-2527 PRESS RELEASE FOR IMMEDIATE RELEASE NUMEREX REPORTS SECOND QUARTER RESULTS REVENUE GROWTH EXCEEDS EXPECTATIONS RESULTING IN IMPROVED OPERATING PERFORMANCE ATLANTA, AUGUST 5, 2004 - NUMEREX CORP. (NASDAQ: NMRX), today announced net losses of $689 thousand for the second quarter of 2004 and $1.5 million year-to-date. These results compare to net losses of $854 thousand and $2.0 million for the comparable periods of 2003. Fully diluted losses per share were $(.06) for the quarter and $(.14) year-to-date. This compares to fully diluted losses per share of $(.08) and $(.18) for the comparable periods of 2003. Net sales were $5.8 million for the quarter and $10.5 million year-to-date, compared to $4.7 million and $9.4 million for the comparable periods of 2003. Please see attached financial statements for more details. "Wireless data products and services grew steadily during the second quarter," stated Stratton Nicolaides, chairman and CEO of Numerex. "Our overall Cellemetry-based M2M revenues increased by over 25% compared to the second quarter of 2003 reflecting a positive trend in wireless network market activity and a robust opportunity pipeline. Recurring Cellemetry-based M2M service revenues generated during the quarter grew 28% in a year over year comparison to second quarter last year. We view these favorable market and growth trends as strong indicators of the future health of the business. We have also taken steps to improve the productivity and reduce the ramp-up costs associated with our new product launches. Specifically, MobileGuardian, our mobile tracking and security solution, announced a contract with Southwest Dealer Services last month to market and sell MobileGuardian units to the new car dealer market. As a result, we expect an immediate reduction in our direct selling costs and anticipate an improvement in sales performance by the fourth quarter when Southwest's personnel are fully trained. VendView, our wireless vending service, continues its successful launch in Mexico and is on course for its US debut later this year. Unit sales to existing customers have exceeded the 1000 unit mark, with several additional trials underway in Mexico and the Caribbean. We expect to secure additional VendView customers during the third quarter and balance of the year. Our digital multimedia business experienced a strong quarter. Specifically, the results for the quarter include the positive impact of an IBM order for video conferencing equipment that will be used by a K-12 school district. The total award was for over $1M with less than one-third shipped in the second quarter leaving a substantial backlog that has recently been incremented by the order of additional video conferencing equipment from another school district. Our networking business also had a strong quarter with significant revenues generated by the installation of equipment that provides E911 services for the customers of cellular carriers. As a result of an improvement in operating performance and working capital efficiencies, specifically related to reduced inventory levels, which have dropped six straight quarters in a row, Numerex was operating cash flow positive for the quarter. Only fixed asset expenditures as well as capital lease principal payments caused a slight decline in cash compared to the balance at March 31, 2004. As we have noted in prior press releases, we entered into a $4.5M term note earlier this year, which significantly strengthened our financial position by both increasing cash and significantly reducing short-term debt. The term note has delayed repayment terms and will require maximum cash outlays for both principal and interest of less than $650 thousand during the last six months of 2004. Actual cash outlays could be lower if the equity payment feature of the note can be exercised. Finally, with respect to third quarter of 2004, we estimate that total revenues will range between $5.5M and $6.0M. As a result of this anticipated growth in revenues as well as the reduction in overheads associated with new product ramp costs, we expect a consequent reduction in operating losses in the third quarter." -continued- CONFERENCE CALL AND WEBCAST INFORMATION Numerex will conduct a conference call later today, August 5th, at 11:00 A.M., Eastern Daylight Time, accessible by calling 888 243-3996 in the U.S. and Canada, or international by calling 973 935-2403. 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 is a communications technology business comprised of operating subsidiaries that utilize existing wireless or cellular, Internet and cable infrastructure thereby enabling network access and information management through the deployment of proprietary software and technology. Numerex facilitates the real-time exchange of information between remote devices, people and business systems. This provides companies the ability to remotely connect, monitor, control and diagnose their field assets. The Company primarily markets and sells products and services in wireless data communications through Cellemetry(R), Uplink(SM), MobileGuardian(R), VendView(TM), and digital multimedia through PowerPlay(TM) and IPContact(TM). These products and 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. Visit the Numerex Web site for additional information 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. -continued - 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, 2004 2003 2004 2003 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) ---------- ---------- ---------- ---------- NET SALES: Product $ 2,271 $ 1,640 $ 4,165 $ 3,210 Service 3,482 3,080 6,358 6,196 ---------- ---------- ---------- ---------- TOTAL NET SALES 5,753 4,720 10,523 9,406 Cost of product sales (excluding depreciation) 1,858 1,309 3,481 2,529 Cost of services (excluding depreciation and amortization) 1,288 960 2,205 2,195 Depreciation and amortization 100 174 209 353 ---------- ---------- ---------- ---------- GROSS PROFIT 2,507 2,277 4,628 4,329 43.6% 48.2% 44.0% 46.0% Selling, general, and administrative expenses 2,404 2,234 4,728 4,621 Research and development expenses 202 284 479 581 Depreciation and amortization 409 505 833 994 ---------- ---------- ---------- ---------- OPERATING PROFIT / (LOSS) (508) (746) (1,412) (1,867) Interest income and (expense), net (150) (131) (283) (151) Profit on sale of business -- -- 250 -- Other income and (expense), net (29) 36 (31) 79 ---------- ---------- ---------- ---------- LOSS BEFORE TAXES (687) (841) (1,476) (1,939) Provision for income taxes 2 13 (1) 32 ---------- ---------- ---------- ---------- NET PROFIT (LOSS) $ (689) $ (854) $ (1,475) $ (1,971) ========== ========== ========== ========== BASIC EARNINGS (LOSS) PER COMMON SHARE $ (0.06) $ (0.08) $ (0.14) $ (0.18) DILUTED EARNINGS (LOSS) PER COMMON SHARE $ (0.06) $ (0.08) $ (0.14) $ (0.18) Number of shares used in per share calculation Basic 10,796 10,785 10,794 11,083 Diluted 10,796 10,785 10,794 11,083
-continued - NUMEREX CORP. SUPPLEMENTAL SALES INFORMATION (IN THOUSANDS)
FOR THE THREE MONTH FOR THE SIX MONTH PERIOD ENDED JUNE 30, PERIOD ENDED JUNE 30, 2004 2003 2004 2003 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) ------------ ------------ ------------ ------------ Net sales: Wireless Data Communications Product $ 1,309 $ 1,073 $ 2,732 $ 2,100 Service 2,143 2,081 4,133 3,939 ------------ ------------ ------------ ------------ Sub-total 3,452 3,154 6,865 6,039 Digital Multimedia and Networking Product 819 395 1,139 899 Service 1,153 809 1,862 1,851 ------------ ------------ ------------ ------------ Sub-total 1,972 1,204 3,001 2,750 Wireline Security Product 143 172 294 211 Service 186 190 363 406 ------------ ------------ ------------ ------------ Sub-total 329 362 657 617 Total net sales Product 2,271 1,640 4,165 3,210 Service 3,482 3,080 6,358 6,196 ------------ ------------ ------------ ------------ Total net sales 5,753 4,720 10,523 9,406 ============ ============ ============ ============
-continued - NUMEREX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
JUNE 30, DECEMBER 31, 2004 2003 (UNAUDITED) ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,289 $ 734 Accounts receivable, net 3,782 3,093 Notes Receivable 91 99 Inventory 2,432 3,461 Prepaid expenses and other current assets 708 700 ------------ ------------ TOTAL CURRENT ASSETS 8,302 8,087 PROPERTY AND EQUIPMENT, NET 1,062 1,296 GOODWILL, NET 15,014 15,014 OTHER INTANGIBLES, NET 7,612 7,979 SOFTWARE, NET 668 825 OTHER ASSETS 892 769 ------------ ------------ TOTAL ASSETS $ 33,550 $ 33,970 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 2,919 $ 2,498 Other current liabilities 1,170 1,487 Note payable, current 1,146 3,500 Deferred revenues 845 775 Obligations under capital leases, current portion 197 282 ------------ ------------ TOTAL CURRENT LIABILITIES 6,277 8,542 LONG TERM LIABILITIES Obligations under capital leases and other long term liabilities 2 62 Note Payable 3,193 -- ------------ ------------ TOTAL LONG TERM LIABILITIES 3,195 62 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 13,188,114 and 13,181,547 shares, respectively 36,810 36,793 Additional paid-in-capital 680 439 Treasury stock, at cost, 2,391,400 shares on June 30, 2004 and December 31, 2003 (10,197) (10,197) Class B common stock - no par value; authorized 5,000,000; none issued -- -- Accumulated other comprehensive income 26 97 Retained earnings (3,241) (1,766) ------------ ------------ 24,078 25,366 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 33,550 $ 33,970 ============ ============
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