WebTech Wireless Reports 31% Revenue Growth in Revenue for the Five Month Transition Period Ended December 31, 2008
VANCOUVER, BRITISH COLUMBIA - March 9, 2009 - WebTech Wireless Inc. (TSX: WEW), a leading supplier of location-based and fleet Telematics services, today reported revenue of $11.4 million for the five month transition period and fiscal year ended December 31, 2008 representing a 31% increase over a pro-rated share (5/12ths) of revenues of $20.4 million reported for its twelve month fiscal year ended July 31, 2008.
WebTech Wireless is reporting results for the five months ended December 31, 2008, as it has changed its fiscal year end from July 31 to December 31.
Profit margins at 43% were affected by one-time non-cash obsolescence charge to inventory and a high dollar value of low margin accessory sales which will attract future services revenue. Were it not for the obsolescence charge and the effect of the accessory sale, gross margins would have been reported at the Company's target of 50%.
Net loss for the five month year was $5.6 million ($0.10 per common share) primarily as the result of non-cash one time charges totaling $3.7 million related to stock option cancellation ($2.0 million), a further write down of the Company's ABCP ($0.7 million), the above noted obsolescence charge, an increase in the allowance for doubtful accounts and restructuring charges ($1 million combined). The loss for the year compares with a loss of $7.8 million ($0.13 per common share) for the year ended July 31, 2008.
For the two months ended December 31, 2008, WebTech reported revenues of $3.6 million representing growth of 6% over the pro-rata share (2/12ths) of the prior year revenues. Net of one time charges, expenses for the five month period of $8.7 million were approximately equal to the prior year pro-rata figures.
As of December 31, 2008, the Company reported total assets of $25.4 million (July 31, 2008: $28.2 million) and working capital of $17.1 million (July 31, 2008: $19.2 million). The decrease in working capital was largely a result of cash used to fund operations. "We are pleased with our revenue growth in this shortened fiscal period, particularly as we closed our manufacturing facility for the final two weeks of December in anticipation of a move to a new, larger (and less expensive) facility that is better able to accommodate our increased volumes," said Scott Edmonds, Chief Financial Officer, WebTech Wireless Inc. "We have taken a number of one-time non-cash charges and have made a prudent provision for bad debts to tighten up our balance sheet as we enter 2009.. We are confident that our revenue growth will continue and that our cost control measures, and enhanced credit and collections activities will assist us in achieving our goals for the coming year."
A reminder that the Financial Results Conference Call will be held today, March 9th, at 5:00 pm Eastern Time (2:00 pm Pacific Time). Interested parties may participate in the call by dialing 1-800-909-5034 or (212) 231-2901 (for international callers). The conference call will be archived on the Company's website at: www.webtechwireless.com.
About WebTech Wireless Inc.
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For further information on WebTech Wireless, please contact:
Press / Media Contact:
Eric Wilson / WebTech Wireless
(+1) 778.370.9609, press@webtechwireless.com
Investor Relations Contact:
R. Joe Dhami
(+1) 877.811.4518 ext. 462, ir@webtechwireless.com
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