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TMCNet:  Telular Corporation Reports Fourth Quarter and Fiscal Year 2012 Results

[November 06, 2012]

Telular Corporation Reports Fourth Quarter and Fiscal Year 2012 Results

Nov 6, 2012 (GlobeNewswire via COMTEX) -- -- Telguard revenue increases 24% over prior year period -- Achieved Company record Adjusted EBITDA of $17.8 million for the full year -- Introduces FY 2013 Adjusted EBITDA guidance of $23.5 - $25.5 million, up 32-43% over FY 2012 -- Company declares a 9% increase in the regular quarterly dividend to $0.12 per share CHICAGO, Nov. 6, 2012 (GLOBE NEWSWIRE) -- Telular Corporation (Nasdaq:WRLS), a global leader in helping businesses use wireless networks for remote monitoring and tracking, today announced financial results for the fourth quarter and fiscal year 2012 ended September 30, 2012. In the fourth quarter of 2012, Telular reported revenue of $23.4 million, including $13.4 million from recurring services, and pre-tax income of $2.9 million. For the full year 2012, Telular reported revenue of $79.8 million, including $46.4 million from recurring services, and pre-tax income of $9.7 million.

Adjusted EBITDA, a non-GAAP financial measure, was $5.5 million for the fourth quarter and $17.8 million for the full year. For further information about Adjusted EBITDA and a reconciliation of this measure to net income in accordance with GAAP, see the last page of this press release.

For the second consecutive year on the anniversary of the initiation of a regular quarterly dividend, the Company's Board of Directors has approved an increase in the dividend, this time to $0.12 per share. This dividend is payable November 30, 2012, to shareholders of record as of the close of business on November 20, 2012. The Company ended fiscal year 2012 with $12.7 million of cash on the balance sheet, up from $11.1 million at the end of last quarter.

Total revenue from the Telguard and TankLink lines of business, representing all of the M2M revenue within the Event Monitoring Segment, increased 23% over the prior year period to $15.3 million in the fourth quarter, and increased 19% to $56.1 million for the full year.

Total Telguard revenue was up 24% year-over-year to $13.1 million in the fourth quarter and up 18% to $48.4 million for the full year. During the quarter, Telular sold approximately 39,300 Telguard units and activated over 35,000 new Telguard subscribers. The total number of Telguard subscribers increased sequentially to 617,500, while average revenue per unit, or ARPU, remained flat at $4.37 for the quarter.

TankLink revenue totaled $2.2 million, including service revenue of $1.1 million, for the fourth quarter, a 19% increase over the prior year period. For the full year, TankLink revenue totaled $7.7 million, including service revenue of $4.1 million, a 21% increase over the prior year.

In the Asset Tracking segment, SkyBitz revenue was $7.9 million, including product revenue of $3.4 million and recurring service revenue of $4.5 million for the fourth quarter. SkyBitz revenue since its acquisition on February 1, 2012, totaled $22.5 million, including product revenue of $10.5 million and recurring service revenue of $12.0 million.

Adjusted EBITDA for Event Monitoring and Asset Tracking was $5.0 million and $1.5 million respectively, excluding corporate expenses of $1.0 million.

For both segments combined, Telular ended the period with nearly 840,000 billable units realizing an ARPU of $5.47. The average selling price, or ASP, for the 50,700 monitoring and tracking hardware units sold during the period was $184.

"We are delighted with the strong revenue growth we achieved in the fourth quarter and for the full year" commented Joe Beatty, president and chief executive officer of Telular Corporation. "During the quarter, we grew our event monitoring service revenues 23% over the prior year period and exceeded the high-end of our Telguard unit sales guidance due to continued strong demand for our new Telguard products for 3G and 4G networks," concluded Mr. Beatty.

"Based on the momentum we are seeing in our business, we are announcing fiscal year 2013 Adjusted EBITDA guidance of $23.5 - $25.5 million, as well as increasing the range of our Telguard sales guidance to 30,000 to 40,000 units each quarter during fiscal year 2013." Investor Conference Call Telular's quarterly conference call will be held today at 4:30 p.m. ET. To participate in the teleconference from the United States and Canada dial 877-941-2332 (International dial 480-629-9821). A replay of the call will be available from November 6, 2012 beginning at 6:30 p.m. ET (5:30 p.m. CT) through November 10, 2012 ending at 11:59 p.m. ET (10:59 p.m. CT) by dialing 800-406-7325 in the United States and entering pass code 4572387# or internationally at 303-590-3030 and entering pass code 4572387#. The replay will also be available via webcast from the Company's corporate website at: www.telular.com under "Investor" and the link "Conference Calls." About Telular Corporation Telular Corporation (Nasdaq:WRLS) provides remote monitoring and asset tracking solutions for business and residential customers, enabling security systems and industrial applications to exchange actionable information wirelessly, typically through cellular and satellite technology. With over 25 years of experience in the wireless industry, Telular Corporation has developed solutions to deliver remote access for voice and data without significant network investment. Headquartered in Chicago, Telular Corporation has additional offices in Atlanta, Washington, D.C., and Miami. For more information, please visit www.telular.com.

Please be advised that some of the information in this release presents the Company's intentions, beliefs, judgments and expectations of the future and are forward-looking statements. Statements regarding expectations, including performance assumptions, estimates relating to future cash flows, levels of demand for our products, dividend amounts and capital requirements, as well as other statements that are not historical facts, are forward-looking statements. For example, the statement, "we are announcing fiscal year 2013 Adjusted EBITDA guidance of $24.0- $25.0 million, as well as increasing the range of our Telguard sales guidance to 30,000 to 40,000 units each quarter during fiscal year 2013" is a forward-looking statement. These statements reflect management's judgments based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer growth and retention, pricing, operating costs and the economic environment. It is important to note that the Company's actual results could differ materially from these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-k for the fiscal year ended September 30, 2011 and subsequent reports on Form 10-Q. Copies of these filings may be obtained by contacting the Company or the SEC.

TELULAR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF CASH FLOWS (Dollars in thousands, except share data) BALANCE SHEETS September September 30, 30, 2012 2011 ----------- ----------- (Unaudited) ASSETS Cash and cash equivalents $ 12,676 $ 12,642 Trade receivables, net 12,224 5,859 Inventories, net 7,478 3,005 Deferred taxes 687 672 Prepaid expenses and other current assets 833 465 ----------- ----------- Total current assets 33,898 22,643 Property and equipment, net 3,346 2,282 Long term deferred taxes 32,706 31,839 Other assets 43,235 11,040 ----------- ----------- Total assets $ 113,185 $ 67,804 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 17,268 $ 7,128 Long-term liabilities 24,786 249 Total stockholders' equity 71,131 60,427 ----------- ----------- Total liabilities and stockholders' equity $ 113,185 $ 67,804 =========== =========== Outstanding shares 16,776,575 15,135,330 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Twelve Months Ended September 30, 2012 2011 ----------- ----------- (Unaudited) (Unaudited) Net cash provided by (used in): Operating activities $ 12,752 $ 14,442 Investing activities (44,198) (9,034) Financing activities 31,480 (20,444) ----------- ----------- Net increase (decrease) in cash and cash equivalents $ 34 $ (15,036) =========== =========== TELULAR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share data) Unaudited Three Months Ended Twelve Months Ended September 30, September 30, 2012 2011 2012 2011 ----------- ---------- ----------- ---------- Revenues M2M service revenue $ 13,368 $ 8,070 $ 46,382 $ 31,161 M2M hardware sales 9,844 4,381 32,260 16,089 ----------- ---------- ----------- ---------- Subtotal M2M 23,212 12,451 78,642 47,250 Other product sales 237 641 1,205 3,248 ----------- ---------- ----------- ---------- Total revenue 23,449 13,092 79,847 50,498 Cost of Sales M2M service cost of sales 3,903 2,357 12,925 10,773 M2M hardware cost of sales 7,014 3,083 23,166 11,046 ----------- ---------- ----------- ---------- Subtotal M2M 10,917 5,440 36,091 21,819 Other product cost of sales 5 1,058 1,164 3,527 ----------- ---------- ----------- ---------- Total cost of sales 10,922 6,498 37,255 25,346 Gross margin 12,527 6,594 42,592 25,152 Operating Expenses Engineering and development expenses 2,210 1,222 7,644 4,580 Selling and marketing expenses 3,353 1,720 11,073 7,171 General and administrative expenses 3,885 1,564 13,531 7,056 ----------- ---------- ----------- ---------- Total operating expenses 9,448 4,506 32,248 18,807 Income from operations 3,079 2,088 10,344 6,345 Other income (expense) (215) (30) (595) 101 ----------- ---------- ----------- ---------- Net income before income taxes 2,864 2,058 9,749 6,446 Provision for income taxes 1,243 440 3,850 2,292 ----------- ---------- ----------- ---------- Net income $ 1,621 $ 1,618 $ 5,899 $ 4,154 =========== ========== =========== ========== Income per common share: Basic $ 0.10 $ 0.11 $ 0.37 $ 0.28 Diluted $ 0.09 $ 0.10 $ 0.34 $ 0.26 Weighted average number of common shares outstanding: Basic 16,712,322 15,115,351 16,136,335 15,035,218 Diluted 17,703,794 16,066,238 17,129,691 15,906,030 Reconciliation of Non-GAAP Measures We use adjusted EBITDA as an additional measure of our operating performance. This measure is not recognized under generally accepted accounting principles. The reconciliation below demonstrates how we calculate this measure from our financial statements.

Three Months Ended Twelve Months Ended September 30, September 30, --------------------- --------------------- 2012 2011 2012 2011 ----------- -------- ----------- -------- (Unaudited) (Unaudited) Net income $ 1,621 $ 1,618 $ 5,899 $ 4,154 Non-cash compensation 374 329 1,489 1,676 Depreciation and amortization 2,020 497 6,002 1,787 Net interest expense (income) 215 (2) 596 (135) Income tax provision 1,243 440 3,850 2,292 ----------- -------- ----------- -------- Adjusted EBITDA $ 5,473 $ 2,882 $ 17,836 $ 9,774 =========== ======== =========== ======== Adjusted EBITDA should be considered in addition to, but not as a substitute for, other measures of performance reported in accordance with accounting principles generally accepted in the United States. While we believe that Adjusted EBITDA, as defined above, is useful within the context described above, it is in fact incomplete and not a measure that should be used to evaluate the full performance of Telular Corporation. Such evaluation needs to consider all of the complexities associated with our business, including, but not limited to, how past actions are affecting current results and how they may affect future results, how we have chosen to finance the business and how regulations and other aforementioned items affect the final amounts that are or will be available to shareholders as a return on their investment. Net income determined in accordance with U.S. GAAP is the most complete measure available today to evaluate all elements of our performance.

This news release was distributed by GlobeNewswire, www.globenewswire.com SOURCE: Telular Corporation CONTACT: Investor Contact: The Blueshirt Group Brinlea Johnson or Allise Furlani brinlea@blueshirtgroup.com or allise@blueshirtgroup.com (212) 331-8424 or 212-331-8433 Media Contact: Pam Benke Telular Corporation pbenke@telular.com (678) 909-4616

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