TORONTO, ONTARIO--(Marketwired - Aug. 27, 2013) - AirIQ Inc. ("AirIQ") (TSX VENTURE:IQ), a supplier of wireless asset management services, today announced its financial results for the three months ended June 30, 2013.
"Q1 is a good start to the fiscal year ending March 31, 2014," said Donald Gibbs, President and Chief Executive Officer of AirIQ. "We achieved sequential growth for a fifth consecutive quarter and signed a two year contract with a major North American rental company for a potential of over 30,000 units. Our continued IFRS revenue growth is even more notable because we did so while also increasing the size of our deferred revenue pools during the last two quarters," continued Mr. Gibbs.
The highlights of the quarter were as follows.
- On May 21, 2013 the Company announced the signing of a blanket contract with a major North American rental company with a two-year term.
- Recurring revenue of $449K represents 74% of total revenue.
- EBITDAS of ($65) for the three months ended June 30, 2013 improved over the prior quarter ended March 31, 2013.
- Revenue of $604 for the quarter ended June 30, 2013 was improved from the prior quarter.
- Gross profit of 65.3% for the three months ended June 30, 2013 was reduced from the prior quarter.
- Expenses (excluding stock based compensation) of $459 for the three months ended June 30, 2013 were approximately that of the prior quarter ended March 31, 2013.
- Net loss in the first quarter was lower than that of the prior quarter.
- On June 14, 2013 shareholder loans of $150 were repaid in a shares for debt transaction.
|Three months ended||Three months ended|
|Gross Margin %||65.3||%||67.4||%|
|Net Income (loss)||$||(107||)||$||(111||)|
|Net Income (loss) per share, basic and diluted||$||0.01||$||(0.00||)|
*The Company has included information concerning EBITDAS because it believes that it may be used by certain investors as one measure of the Company's financial performance. EBITDAS is not a measure of financial performance under IFRS and is not necessarily comparable to similarly titled measures used by other companies. EBITDAS should not be construed as an alternative to net income or to cash flows from operating activities (as determined in accordance with IFRS) or as a measure of liquidity.
The Company continues to focus on its key strategy elements to build revenues and manage costs to achieve sustained profitability and positive cash flow and to seek opportunities to form value creating strategic partnerships.
Unless otherwise noted herein, and except share and per share amounts, all references to dollar amounts are in thousands of Canadian dollars.
The Company's consolidated condensed interim financial statements include the accounts of AirIQ and its subsidiaries, AirIQ U.S. Holdings, Inc., AirIQ U.S., Inc., and AirIQ, LLC. All inter-company balances and transactions have been eliminated on consolidation.
The Company's audited consolidated financial statements as at and for the year ended March 31, 2013, including notes thereto, and Management's Discussion and Analysis for the same period were filed with the Canadian securities regulatory authorities on July 29, 2013, and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com).
Revenues for the three months ended June 30, 2013, increased 5% to $604 from $577 for the three months ended June 30, 2012. Approximately 74% of the total revenue for the year represents recurring revenue from the Company's airtime customers.
Revenues received from equipment sold in connection with service contracts are recorded as deferred revenue and recognized over the initial term of the service contract.
Sales of hardware units associated with service contracts recorded to deferred revenues were approximately $155, during the three months ended June 30, 2013, compared to $242 during the three months ended June 30, 2012. Revenues recognized from deferred revenues for the three months ended June 30, 2013 were approximately $141 compared to $148 during the three months ended June 30, 2012.
Overall, revenues related to service contracts sold in connection with hardware equipment increased by $24 from $425, for the three months ended June 30, 2012 to $449 for the three months ended June 30, 2013.
Included in the Company's reported revenues are miscellaneous parts, repair, warranty and lost unit sales of approximately $14, during the three months ended June 30, 2013, compared to $4, for the three months ended June 30, 2012.
Overall, gross profit increased by 1% to $394 for the three months ended June 30, 2013 compared to $389 for the three months ended June 30, 2012.
Equipment gross profits decreased by approximately 26% to $58 during the three months ended June 30, 2013 from $78 for the three months ended June 30, 2012, due to increased hardware, repair and installation costs.
Service contract gross profits increased by approximately 8% to $336 for the three months ended June 30, 2013 from $311 for the three months ended June 30, 2012.
Expenses and Other Items
Sales and marketing, research and development and general and administrative expenses totalled $463 for the three months ended June 30, 2013 compared to $474 for the three months ended June 30, 2012.
Overall these expenses were reduced by $11 for the three months ended June 30, 2013 when compared to the three months ended June 30, 2012.
Expense reductions for the three months ended June 30, 2013 when compared to the three months ended June 30, 2012 were achieved in the following areas; a) insurance premium reductions of approximately $3, b) computer operating expense savings of approximately $12 due to the reduction of co-location costs, (c) consulting fee costs were reduced by $14 and (d) other cost reductions of approximately $39 related primarily to legal fees, communication costs and public reporting fees. These savings were offset by increases in the following areas; a) wages and related expense increase of approximately $27 due to additional personnel, b) general costs of $23, and c) director fee expense of $7.
The Company's net loss for the three months ended June 30, 2013 was $107 as compared to a net loss of $111 for the three months ended June 30, 2012 a decrease of $4.
The decrease in net loss for the three months ended June 30, 2013 when compared to the three months ended June 30, 2012 can be attributed to improvement in the following areas; a) expense reductions of approximately $11, b) increased gross profits of $5. These improvements were offset by decreases in the following areas; a) increase in amortization of approximately $2, b) increased interest expense of $5, and, c) the increase in foreign exchange of approximately $5.
No Conference Call
AirIQ will not be holding a conference call to discuss results. The Company's financial report, including complete financial statements and Management's Discussion and Analysis will be available on the Company's website www.airiq.com and at www.sedar.com on August 27, 2013.
AirIQ currently trades on the TSX Venture Exchange under the symbol IQ. AirIQ's office is located in Pickering, Ontario, Canada. The Company offers a suite of asset management services that generate recurring revenues from each device deployed. AirIQ delivers services to two primary markets: Commercial Fleets and dealers that service Consumer segments. AirIQ provides vehicle owners with the ability to monitor, manage and protect their mobile assets. Services include: instant vehicle locating, boundary notification, automated inventory reports, maintenance reminders, security alerts and vehicle disabling and unauthorized movement alerts. For additional information on AirIQ or its products and services, please visit the Company's website at www.airiq.com.
This news release contains forward-looking information based on management's best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "hope", "goal", "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including AirIQ's perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors, which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes may differ materially from those expressed in such forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of such information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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President and Chief Executive Officer
(905) 831-6444, Ext. 4255