Hey SG: Just pulled this off the wire. Haven't read it yet......
Subject: Stockwatch: Telular Canada Inc - News Release
Date: Tue, 01 Sep 1998 06:26:07 -0700
From: newsout@canada-stockwatch.com
Year end results
Telular Canada Inc TC
Shares issued 14,200,000 Aug 31 close $0.40
Tue 1 Sept 98 News Release
Mr. David Dempster reports
Telular Canada had a 100 per cent increase in sales for the fourth quarter
ended June 30, 1998 resulting in the company's first quarterly operating
profit. Sales for the quarter ended June 30, 1998, were $3,868,000, which
produced net income of $108,000 or zero cents per share. This compares to
sales of $1,871,000 and net loss of $1,605,000 or 11 cents per share for
the corresponding period last year.
This quarter signifies the first operating profit in the company's history.
Early in the year it was Telular's primary objective to deliver on a
focused business plan which included positioning the company for aggressive
growth while eliminating negative cash flows by the fourth quarter.
The fourth quarter profit was achieved in spite of fourth quarter
writedowns on long-term investments. During the fourth quarter of fiscal
1998, the company reduced the valuation of the shares held in Triarx and
Telular Corp. to an amount approximating their net realizable value. These
writedowns, $36,000 and $51,000, respectively, served to reduce operating
income by a total of $87,000.
For the year ended June 30, 1998 the company reported increased sales of
$10,076,000 versus $9,468,000 for the corresponding period last year. The
net loss for fiscal 1998 was $2,378,000 or 17 cents per share compared to a
net loss of $2,137,000 or 15 cents per share reported in fiscal 1997.
Included in the 1997 net loss figure is a gain of $1,999,000 from the sale
of Telular Corp. shares. The same gain in fiscal 1998 totalled only
$948,000. Accordingly, the adjusted net loss improved in fiscal 1998 by
$810,000.
Gross margins for the year remained strong at 33.5 per cent which compares
to gross margins of 32.0 per cent for the corresponding period in 1997.
During the fourth quarter gross margins reached 37.7 per cent. Gross
margins are expected to continue to improve in the coming fiscal year as
Telular introduces new higher margin products while increasing sales
levels.
Operating expenses declined from $2,185,000 in the fourth quarter of fiscal
1997 to $1,794,000 in fiscal 1998. Despite this decline in overall
expenditure, the company continued with investment in new product
development, specifically the Novas product and the CS-832 product.
Concurrently, the company continued to invest in product marketing, both
predevelopment research and a targeted advertising campaign, aimed at value
added reseller and system integrators. Operating and interest expenses for
the fiscal year totalled $7,130,000, which is down $237,000 from the
amounts reported in fiscal 1997.
Telular continued to build a product portfolio in fiscal 1998 which
positioned the company at the leading edge of the market moving into the
new millenium.
The company made progress in its product development during the year. In
November 1997, Granite released its Featherweight product, which was
subsequently licenced by Intermec Technologies in December 1997. In
addition to an initial product order, Intermec signed a five year licencing
agreement whereby Telular will receive a per unit royalty for every Tracker
T2090 (Featherweight) that Intermec delivers to its customers.
Two new products that address the Automated Meter Reading market were also
unveiled by Telular's Global Data Wireless Group. These products provide an
economical means of remotely reading utility meters without the need of
human intervention. Several utility companies are currently testing both
products across North America.
Global Data Granite Communications also began development of its new NOVAS
handheld product. This new upgraded VideoPad employs industry standard DOS,
a rugged ergonomic design, touchscreen technology and weighs only 16
ounces. The NOVAS, which will use Penright! Software, is expected to be
released in the fall of 1998 and early market response has been extremely
encouraging.
Telular began the year with a change in its management team and board of
directors. In August the company appointed Jim Crocker as director and
David Dempster as chairman. In addition, Harry Klein was named president
and CEO and Cathy Widmer as CFO.
Subsequent to the end of the fiscal year, Telular unveiled a new corporate
image which includes a proposed name change at the annual general meeting
of shareholders. The company will follow the direction of its two operating
subsidiaries and become GDI Global Data Inc. Both Granite Communications
and Telular Canada's Wireless Business Group have been renamed as Global
Data Granite Communications and Global Data Wireless.
In addition to the renaming of the company and its operating subsidiaries,
Global Data Granite Communications and Global Data Wireless have been
combined into a single operating entity. This merging of the company's
operating entities will streamline business operations and improve
efficiencies by focusing the full resources of the company toward common
objectives.
As at June 30, 1998 the company had no long-term debt, cash of
approximately $712,000, other working capital of $1,658,000 and 265,000
shares in Telular Corp.
STATEMENT OF EARNINGS
Three months ended June 30
1998 1997
Net sales $ 3,868,074 $ 1,871,496
Cost of sales 2,409,475 1,314,980
----------- -----------
Gross profit 1,458,599 556,516
Operating
expenses
excluding
undernoted 1,660,048 2,050,206
Royalties &
licencing income (392,816) -
----------- -----------
Operating income
(loss) before
undernoted 191,367 (1,493,690)
Amortization
of goodwill 134,278 134,275
----------- -----------
Operating
income (loss) 57,089 (1,627,965)
Interest &
other income 120,929 23,132
Writedown of
investment (87,487) -
Gain on sale
of investment 17,463 1
----------- -----------
Net (loss)
income $ 107,994 $(1,604,832)
=========== ===========
(Loss) earnings
per share (cents) nil (11)
STATEMENT OF EARNINGS
Year ended June 30
1998 1997
Net sales $10,076,308 $ 9,467,928
Cost of sales 6,696,663 6,440,611
----------- -----------
Gross profit 3,379,645 3,027,317
Operating
expenses
excluding
undernoted 6,592,554 6,829,949
Royalty &
licencing income (392,816) -
----------- -----------
Operating
(loss) before
undernoted (2,820,093) (3,802,632)
Amortization
of goodwil 537,100 537,097
Restructuring
recovery (note 4) - (210,656)
----------- -----------
Operating
(loss) (3,357,193) (4,129,073)
Interest &
other income 118,109 96,011
Writedown of
investments
(note 5) (87,487) (102,921)
Writedown of
investment
(note 8) 948,499 1,999,116
----------- -----------
Net (loss) ($2,378,072) ($2,136,867)
=========== ===========
(Loss) per
share (cents) (17) (15)
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
