VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/10/13 -- Webtech Wireless Inc. (TSX: WEW) ("Webtech Wireless" or the "Company"), a leading provider of vehicle fleet location-based services and telematics technology, today announced its financial results for the three month period ended March 31, 2013.
On January 24, 2013, the Company closed the sale of its NextBus business ("NextBus") to Cubic Transportation Systems, Inc., a division of Cubic Corporation, for $20.8 million resulting in income from discontinued operations of $13.1 million or $0.12 per share ($15.1 million or $0.14 excluding a non-cash tax charge).
The Company is reporting break even net income from continuing operations vs. a loss of $1.0 million or $0.01 per share in the prior year.
Figures quoted in this press release relate to the Company's business excluding NextBus unless otherwise noted.
Q1 2013 Financial and Operational Highlights
-- Adjusted EBITDA was $0.5 million for the quarter compared to $nil in Q1 2012.-- Revenue was $7.4 million in Q1 2013 compared to $7.7 million in Q1 2012. The revenue decrease was the result of a previously announced exit from the theft recovery vertical.-- Hardware revenue increased 6% over the prior comparable period. The hardware revenue increase was the result of commercial and OEM deliveries in the quarter. Excluding the theft recovery vertical, hardware revenues increased 26% over Q1 2012.-- Recurring revenue was relatively flat at $4.7 million in Q1 2013 compared to $4.8 million in Q1 2012 but rose to 64% of total revenue from 63% year on year. The recurring revenue decrease was the result of the exit from the low average revenue per unit ("ARPU") theft recovery vertical. Excluding theft recovery recurring revenue rose 2% year on year.-- Notable sales during the quarter included Port Metro Vancouver, Arctic Slope Regional Corporation, Pacific SouthWest Irrigation Corp., PerforMix Nutrition Systems, JS West & Companies, a first sale of hardware to the new owners of NextBus and a previously announced repeat sale to a Fortune 100 fleet client.-- The Company's subscriber base at March 31, 2013 totalled approximately 78,000 compared to 72,000 at December 31, 2012 and 91,000 at March 31, 2012. The increase in telematics subscribers since December 31, 2012 is due to the addition of subscribers from sales and implementations across both the Quadrant and InterFleet product lines, as well as 5,000 new data pump subscribers from the recently sold NextBus business. The drop in telematics subscribers from Q1 2012 is due to the exit from the consumer theft recovery vertical in Mexico and the cancelation of certain Brazilian subscribers for a combined total of a reduction of 22,000 subscribers.-- ARPU increased to $21.52 per subscriber vs. $17.83 per subscriber in the prior year. A combination of the exit from the low ARPU theft recovery business, and the addition of a number of high ARPU subscribers on the Quadrant and InterFleet portals resulted in the year over year improvement.-- Gross margins were 57% for the quarter, an improvement over 52% in the prior comparable period. The improvement over the prior comparable period was driven by a favourable product mix and the exit from the low margin theft recovery vertical.-- Cash operating expenses (sales and marketing, research and development, and general and administration excluding non-recurring items) decreased 8% to $3.8 million in Q1 2013 from $4.1 million in Q1 2012, a direct result of past restructuring efforts and reductions in discretionary spending.-- During the quarter, the Company introduced its Winter Maintenance solution to the AT&T reseller channel - the first InterFleet product to be added to the AT&T price list.-- On April 30, 2013, Mr. Chris Jackson was appointed to the newly created position of Vice-President of Government Operations, adding leading of the Company's Government Sales Team to his portfolio of responsibilities. Mr. Jackson first joined the Company's InterFleet subsidiary in 2004 and has served in a variety of increasingly responsible positions including Senior Project Manager, Vice President, Operations & Project Management and most recently Business Development where he has been very active in adding to the Company's third party sales channels as well as leading in the development of the Company's Fleet Intelligence Anywhere strategy.