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Gold/Mining/Energy : Telular Canada Inc. (TC.T) – undervalued? -- Ignore unavailable to you. Want to Upgrade?

To: Steelguy who wrote (126)	11/26/1998 11:38:00 AM
From: Abbeydale	Read Replies (1) \| Respond to of 133

First quarter results Telular Canada Inc TC Shares issued 14,200,000 Nov 25 close $1.35 Thu 26 Nov 98 News Release Mr. Harry Klein reports Sales were $2,148,728 and the operating loss was $857,079 for the first quarter ended Sept. 30, 1998. This compares to sales of $1,757,323 and an operating loss of $1,310,817 for the corresponding period last year. Net loss for the period ended Sept. 30, 1998 was $898,540 (six cents per share) versus a net loss of $523,366 (four cents per share) for the quarter ended Sept. 30, 1997. The discrepancy between net loss and operating loss is almost solely due to an offsetting gain resulting from the sale of Telular Corp. shares in the prior period. The company has implemented an aggressive business plan for the current fiscal year which includes significantly growing its top line through new product offerings. Both the CS-832 and NOVAS handheld, position Telular Canada at the forefront of the integrated wireless and handheld computing marketplaces. However, the impact from these new products will not contribute to revenue until the third fiscal quarter of this year when both products will be ready for commercial production. Development on these new products will be completed in the first half of the current fiscal year while the company phases out its old product lines. Gross margins for the quarter ended Sept. 30, 1998 were 32.6 per cent of sales versus the 33.8 per cent level achieved in the same period last year. The company expects that gross margins will increase in the latter half of the current fiscal year as Telular Canada begins shipping its new NOVAS line of handheld products as well as its CS-832 meter reading product. Operating expenses for the quarter declined to $1.53-million from $1.92-million for the same period last year representing a total reduction in operating expenses of approximately 20 per cent. This reduction in operating expenses is due to cost cutting initiatives (primarily to general and administrative expenses) implemented over the past fiscal year. The company expects its total operating expenses to remain at approximately $1.5-million per quarter for the remainder of the fiscal year. During the quarter, the company continued to prepare both the CS-832 and the NOVAS handheld for production while considerably ramping up its overall marketing initiative. This initial marketing effort has positioned Telular as a leading candidate for several international opportunities spanning a wide array of applications. Although the process has only just started, the company is involved in numerous field trials for both products and 20 value added resellers (VARs) are currently marketing the NOVAS product. The quarter also saw the company successfully sign Nortel (Northern Telecom) as a licencee of its fixed wireless technology in Canada and the announcement of a proposed name change to be approved at the annual general meeting of shareholders. Subject to approval on Dec. 8, 1998, the new corporate name will be GDI Global Data Inc. At the end of the quarter, the company had no long-term debt and possessed working capital of $1,977,283. CONSOLIDATED STATEMENT OF INCOME Three months ended Sept. 30 1998 1997 Net sales $2,148,728 $1,757,323 Cost of sales 1,447,900 1,163,968 ---------- ---------- Gross profit 700,828 593,355 Operating expenses 1,557,907 1,904,172 ---------- ---------- Operating (loss) (857,079) (1,310,817) Interest and other income 0 0 Gain on sale of investment (27,480) 802,952 Income/corporate taxes (13,981) (15,501) ---------- ---------- Net (loss) income $ (898,540) $ (523,366) ========== ========== (Loss) earnings per share (6 cents) (4 cents)