Minorplanet Systems USA, Inc. Announces Fiscal 2004 Second Quarter Financial Results
RICHARDSON, Texas--April 19, 2004--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 2004 ended Feb. 29, 2004.Total revenues were $6.0 million for the second quarter of fiscal 2004, compared with total revenues of $12.0 million for the second quarter of fiscal 2003 ended Feb. 2, 20048, 2003. The company reduced its net loss by 70.5 percent to $1.3 million ($0.14 loss per share) for the fiscal 2004 second quarter, compared with a net loss of $4.4 million ($0.46 loss per share) for the comparable period a year ago. There were 9.7 million weighted average shares outstanding for both periods following a 5-for-1 reverse stock split that was effective Dec. 3, 2003.
For the first six months of fiscal 2004, total revenues were $12.8 million, compared with total revenues of $25.7 million for the 2003 six months. The company reported a net loss of $4.6 million ($0.48 loss per share) for the fiscal 2004 six months, compared with a net loss of $8.9 million ($0.92 loss per share) for the comparable period a year ago.
"The second quarter 2004 financial results reflect actions taken to reduce the company's operating cost structure in order to bring the company to a cash flow neutral operating position," said Dennis Casey, president and chief executive officer. "One of the key actions was a significant temporary reduction in our sales and marketing personnel for the Vehicle Management Information(TM) (VMI(TM)) product line. As a result, 530 VMI units were sold during the fiscal 2004 second quarter, compared with 1,450 units in the same quarter a year ago. We anticipate a strengthening of unit sales going forward as we add new sales personnel and we begin selling and distributing our products under the company's new sales and marketing model," Casey noted.
"Company service and equipment revenues have also been significantly impacted by the March 2002 sale of our long-haul trucking assets and the anticipated migration of a large number of those lower-margin customers to other carrier networks from our NSC System network," added Casey. "However, ending our involvement with long-haul trucking has been a strategic move that we believe will be in the best long-term interests of Minorplanet Systems USA."
Fiscal 2004 Second Quarter Highlights
-- The company's gross margin improved 17.4 percent to 50.7 percent in the 2004 second quarter, compared with 43.2 percent in the 2003 second quarter, primarily due to improved margin associated with VMI product sales and a decrease in ratable revenue and costs recognized on low-margin network subscriber units (long-haul customers) due to the expected churn.
-- Operating expense categories were down 55.0 percent in the second quarter from a year ago as the company reduced costs by a total of $5.0 million.
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, in real time. Based in Richardson, Texas, the company also markets, sells and supports a customized, GPS-based fleet management solution for large fleets like SBC Communications, Inc., which has approximately 31,500 installed vehicles now in operation.
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: ability to maintain the company's Nasdaq Stock Market listing; ability to emerge from Chapter 11 as a stronger and more financially viable entity; ability to obtain the necessary approval of a plan of reorganization by the creditors; ability to obtain confirmation of a plan of reorganization by the Bankruptcy Court; ability to obtain a valuation of the company at a level which allows the company to fully satisfy creditors' claims by issuance of equity securities; ability to obtain approval of the Bankruptcy Court of the debtor-in-possession financing; ability to successfully expand sales and marketing presence to additional metropolitan areas; ability to commercially introduce a GPRS-capable mobile unit; ability to obtain certification of GPRS-based products with wireless carriers; 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 the orb logotype are trademarks and service marks of Minorplanet Limited.
MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
(Debtors-in-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
ASSETS
February 29, August 31,
2004 2003
-------------- ---------------
Current assets:
Cash and cash equivalents $3,192 $5,105
Accounts receivable, net 3,234 4,710
Inventories 1,268 2,190
Deferred product costs - current
portion 1,373 1,600
Lease receivables and other
current assets, net 738 1,081
-------------- ---------------
Total current assets 9,805 14,686
Network, property, equipment and
software, net 3,112 3,865
Deferred product costs - non-
current portion 1,853 2,429
License rights, net 32,178 33,485
Lease receivables and other assets,
net 1,457 1,635
-------------- ---------------
Total assets $48,405 $56,100
============== ===============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities not subject to
compromise:
Accounts payable $192 $1,703
Telecommunications costs payable 410 2,500
Accrued interest payable - 903
Deferred product revenues -
current portion 3,109 3,316
Other current liabilities 1,828 5,511
-------------- ---------------
Total current liabilities not
subject to compromise 5,539 13,933
Liabilities subject to compromise 20,419 -
Long-term liabilities not subject
to compromise:
Deferred product revenues - non-
current portion 5,142 6,217
Senior notes and other notes
payable - 14,316
Other non-current liabilities 360 2,144
-------------- ---------------
Total long-term liabilities
not subject to compromise 5,502 22,677
-------------- ---------------
Total liabilities 31,460 36,610
Stockholders' equity:
Common Stock 97 484
Preferred Stock - Series E - -
Additional paid-in capital 221,069 218,601
Accumulated deficit (203,659) (199,033)
Treasury stock (562) (562)
-------------- ---------------
Total stockholders' equity 16,945 19,490
-------------- ---------------
Total liabilities and
stockholders' equity $48,405 $56,100
============== ===============
MINORPLANET SYSTEMS USA, INC. AND SUBSIDIARIES
(Debtors-in- Possession)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three months ended Six months ended
February 29, February 28, February 29, February 28,
------------- ------------ ------------ ---------
2004 2003 2004 2003
------------- ------------ ------------ ---------
Revenues:
Product $303 $563 $623 $1,177
Ratable product 1,344 2,672 2,756 5,349
Service 4,320 8,810 9,405 19,147
--------- --------- ------------ ---------
Total revenues 5,967 12,045 12,784 25,673
--------- --------- ------------ ---------
Cost of revenues:
Product 176 431 565 1,078
Ratable product 614 1,929 1,332 3,893
Service 2,150 4,485 5,003 9,908
Total cost of
revenues 2,940 6,845 6,900 14,879
--------- --------- ------------ ---------
Gross profit 3,027 5,200 5,884 10,794
--------- --------- ------------ ---------
Expenses:
General and
administrative 1,549 2,534 3,649 5,037
Customer service 466 1,045 1,348 1,985
Sales and
marketing 583 3,612 1,724 7,792
Engineering 427 438 869 903
Depreciation and
amortization 1,081 1,451 2,219 2,913
--------- --------- ------------ ---------
4,106 9,080 9,809 18,630
--------- --------- ------------ ---------
Operating loss (1,079) (3,880) (3,925) (7,836)
Interest income 116 130 229 254
Interest expense (371) (529) (901) (1,059)
Other income
(expense) 353 (125) 336 (236)
--------- --------- ------------ ---------
Loss before
reorganization
items (981) (4,404) (4,261) (8,877)
Reorganization items (365) - (365) -
--------- --------- ------------ ---------
Net loss $(1,346) $(4,404) $(4,626) $(8,877)
========= ========= ============ =========
Basic and diluted
loss per share:
--------- --------- ------------ ---------
Net loss per
share $(0.14) $(0.46) $(0.48) $(0.92)
========= ========= ============ =========
Weighted average
number of shares
outstanding:
Basic and
diluted 9,671 9,670 9,671 9,670
=========== ========= ============ =========
Supplemental
Information:
EBITDA:
Net loss $(1,346) $(4,404) $(4,626) $(8,877)
Depreciation and
amortization 1,081 1,451 2,219 2,913
Interest income (116) (130) (229) (254)
Interest expense 371 529 901 1,059
Reorganization items 365 - 365 -
----------- --------- ----------- ---------
EBITDA $355 $(2,554) $(1,370) $(5,159)
=========== ========= =========== =========