Minorplanet Systems USA, Inc. Announces Fiscal 2003 Second Quarter Financial Results
RICHARDSON, Texas--April 14, 2003--Minorplanet Systems USA, Inc. , a leading provider of telematics-based management solutions for commercial fleets, today reported financial results for the second quarter and six months of fiscal 2003 ended Feb. 28, 2003.Total revenues were $12.0 million for the second quarter of fiscal 2003, compared with total revenues of $16.1 million for the second quarter of fiscal 2002 ended Feb. 28, 2002. The company reported a net loss of $4.4 million ($0.09 loss per share) for the 2003 second quarter, compared with a net loss of $8.3 million ($0.17 loss per share) for the 2002 second quarter, including a non-recurring inventory write-down of $4.7 million ($0.10 per share).
For the first six months of fiscal 2003, total revenues were $25.7 million, compared with total revenues of $34.6 million for the 2002 six months. The company reported a net loss of $8.9 million ($0.18 loss per share) for the fiscal 2003 six months, compared with a net loss of $11.4 million ($0.24 loss per share) for the comparable period a year ago, including the $4.7 million ($0.10 per share) inventory write-down.
"VMI(TM) (Vehicle Management Information(TM)) sales in the second quarter of 2003 resulted in $2.0 million in deferred product revenues that will be recognized in future periods," said W. Michael Smith, executive vice president and chief financial officer. "As of Feb. 28, 2003, the company had a total of $7.0 million in deferred product revenues from VMI that will be recognized in future periods."
Fiscal 2003 Second Quarter Operating Highlights
-- SBC Communications, Inc. signed a one-year extension through Jan. 30, 2004 of its agreement for Minorplanet Systems USA to provide mobile location and communication services to about 34,500 service vehicles operated by SBC companies across the nation.
-- The company completed its largest VMI installation to date, installing units in 550 vehicles for Trinity Waste Services, a Fort Worth-based solid waste collection and disposal company.
-- Minorplanet Systems USA has cumulatively sold and installed a total of about 5,900 VMI units through February 2003, including 1,450 units during the 2003 second quarter.
-- The company's gross margin once again improved, increasing by 3.3 percentage points to 43.2 percent in the 2003 second quarter, compared with 39.9 percent in the 2002 second quarter, excluding the $4.7 million inventory write-down. The gross margin strengthened primarily due to higher ratable product margin associated with VMI product sales and lower warranty costs associated with units installed in SBC vehicles.
-- The company signed its second wireless agent agreement for GSM services with T-Mobile, one of the nation's largest wireless carriers. Under the agreement, Minorplanet's VMI customers will contract directly with T-Mobile for any wireless GSM services.
-- Operating expenses, excluding sales and marketing costs associated with VMI, were about one-fourth lower than the year-ago period as management continues to tightly control overhead costs in all other operating areas of the company. Sales and marketing costs for the second quarter were up $1.4 million from the comparable period a year ago as the company continued to expand market operations.
About Minorplanet Systems USA, Inc.
Minorplanet Systems USA, Inc. (minorplanetusa.com) markets, sells and supports Vehicle Management Information(TM) (VMI(TM)), a state-of-the-art fleet management solution that contributes to higher customer revenues and improved operator efficiency. VMI combines the technologies of the global positioning system (GPS) and wireless vehicle telematics to monitor vehicles, minute by minute. The company also markets, sells and supports a customized, GPS-based fleet management solution for large fleets like SBC Communications, Inc., which has approximately 34,500 installed vehicles now in operation.
Headquartered in Richardson, Texas, Minorplanet currently markets its VMI fleet management technology in the Dallas/Fort Worth, Houston, Atlanta, Los Angeles and Austin, Texas, markets, with plans for expanding into other metro markets in the future.
Legal notice to investors: Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company "expects," "believes," "anticipates" or words of similar import. Similarly, statements that describe the company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements generally involve known and unknown risks, uncertainties and other facts, which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: acceptance of new product offerings; ability to achieve sales projections, ability to achieve and maintain margins during periods of rapid expansion; availability of capital to fund expansion; market conditions; general economic and business conditions; business abilities and judgment of management and personnel; changes in business strategy and competition. For a listing of risks applicable to the future prospects of the company, please refer to the reports filed with the SEC, such as recent 10-K and 10-Q Reports.
"Minorplanet" is a federally registered trademark and service mark of Minorplanet Limited. "Vehicle Management Information," "VMI", "Minorplanet Systems USA", and orb logotype are trademarks and service marks of Minorplanet Limited.
- TABLES TO FOLLOW -
MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
ASSETS
February 28, August 31,
2003 2002
------------ ----------
Current assets:
Cash and cash equivalents $ 9,866 $ 10,413
Short-term investments 500 7,677
Accounts receivable, net 5,878 7,699
Inventories 2,715 1,581
Deferred product costs - current portion 3,595 6,149
Other current assets 1,406 2,779
------------ ----------
Total current assets 23,960 36,298
Network, equipment and software, net 5,137 6,425
Deferred product costs - non-current portion 2,052 1,496
License rights, net 34,792 36,100
Other assets, net 1,645 1,084
------------ ----------
Total assets $ 67,586 $ 81,403
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,157 $ 2,875
Telecommunications costs payable 2,373 3,268
Accrued interest payable 903 903
Deferred product revenues - current portion 5,259 8,054
Deferred service revenues - current portion 2,155 6,872
Other current liabilities 6,141 5,989
------------ ----------
Total current liabilities 19,988 27,961
Deferred product revenues - non-current portion 4,900 2,791
Senior notes and other notes payable 14,314 14,254
Other non-current liabilities 1,843 979
------------ ----------
Total liabilities 41,045 45,985
------------ ----------
Stockholders' equity:
Common Stock 484 484
Preferred Stock - Series E - -
Additional paid-in capital 218,509 218,509
Accumulated deficit (191,890) (183,013)
Treasury stock (562) (562)
------------ ----------
Total stockholders' equity 26,541 35,418
------------ ----------
Total liabilities and stockholders' equity $ 67,586 $ 81,403
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MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share)
Three months ended Six months ended
February 28, February 28,
------------------ -------------------
2003 2002 2003 2002
-------- -------- -------- ---------
Revenues:
Product $ 563 $ 2,526 $ 1,177 $ 7,794
Ratable product 2,672 2,523 5,349 4,304
Service 8,810 11,043 19,147 22,518
-------- -------- -------- ---------
Total revenues 12,045 16,092 25,673 34,616
-------- -------- -------- ---------
Cost of revenues:
Product 431 2,184 1,078 6,132
Ratable product 1,929 2,135 3,893 3,611
Service 4,485 5,353 9,908 11,825
Inventory write-down to net
realizable value - 4,693 - 4,693
-------- -------- -------- ---------
Total cost of revenues 6,845 14,365 14,879 26,261
-------- -------- -------- ---------
Gross profit 5,200 1,727 10,794 8,355
-------- -------- -------- ---------
Expenses:
General and administrative 2,534 3,071 5,037 6,095
Customer service 1,045 1,331 1,985 2,888
Sales and marketing 3,612 2,226 7,792 3,496
Engineering 438 591 903 1,464
Network services center - 434 - 885
Depreciation and amortization 1,451 1,894 2,913 3,967
-------- -------- -------- ---------
9,080 9,547 18,630 18,795
-------- -------- -------- ---------
Operating loss (3,880) (7,820) (7,836) (10,440)
Interest income 130 68 254 136
Interest expense (529) (525) (1,059) (1,063)
Other expense (125) - (236) -
-------- -------- -------- ---------
Loss before income taxes (4,404) (8,277) (8,877) (11,367)
Income tax provision - - - -
-------- -------- -------- ---------
Net loss $(4,404) $(8,277) $(8,877) $(11,367)
======== ======== ======== =========
Basic and diluted loss per share:
-------- -------- -------- ---------
Net loss per share $ (0.09) $ (0.17) $ (0.18) $ (0.24)
======== ======== ======== =========
Weighted average number of
shares outstanding:
Basic and diluted 48,349 48,047 48,349 48,050
======== ======== ======== =========
Supplemental Information:
EBITDA:
Operating loss $(3,880) $(7,820) $(7,836) $(10,440)
Depreciation and amortization 1,451 1,894 2,913 3,967
Other expense (125) - (236) -
-------- -------- -------- ---------
EBITDA $(2,554) $(5,926) $(5,159) $ (6,473)
======== ======== ======== =========
Service vehicle units -
beginning of period 40,636 39,131 40,682 37,439
Net additions (deactivations) (426) 1,309 (472) 3,001
-------- -------- -------- ---------
Service vehicle units - end
of period 40,210 40,440 40,210 40,440
======== ======== ======== =========
Network services subscriber
units - beginning of period 24,004 31,249 27,218 31,738
Net deactivations (3,743) (828) (6,957) (1,317)
-------- -------- -------- ---------
Network services subscriber
units - end of period 20,261 30,421 20,261 30,421
======== ======== ======== =========