@Track Communications Announces First Quarter 2000 Financial Results
11 May 2000
@Track Communications Announces First Quarter 2000 Financial Results; Key Accomplishments Keep Company On Track in All Three Business Areas
RICHARDSON, Texas--May 11, 2000--@Track Communications, Inc. (Nasdaq SCP:ATRK), a leading provider of wireless-based vehicle fleet management and intelligent mobile asset-tracking solutions, today reported that total revenues for the first quarter ended March 31, 2000, were $14.1 million, down 17.4 percent from $17.1 million for the 1999 first quarter. The company reported a net loss of $4.8 million ($0.19 per share) for the 2000 first quarter, compared with a net loss, before nonrecurring income items, of $4.3 million ($0.17 per share) for the 1999 first quarter. Including $4.7 million in nonrecurring income items associated with litigation settlements and cellular carrier credits, @Track reported net income of $0.4 million ($0.02 per diluted share) for the 1999 first quarter."First quarter financial results were in line with our expectations, since revenues from installations of our service vehicle units will not begin to impact our results until the second quarter of 2000," said Jana Bell, president and chief executive officer. "We expect our revenues will increase, especially in the last two quarters of 2000, as we work to install over 28,000 service vehicle units for a major customer. We also anticipate revenue contribution in the third and fourth quarters from TrackWare(TM), our trailer-tracking product, as current customer pilots are converted into sales."
First quarter highlights:
-- Changed the corporate name to @Track Communications, Inc. from
HighwayMaster Communications, Inc. to reflect the company's
wireless technology direction to be an integrator of multiple
wireless data and voice networks and broadened vision of
"tracking things that move(SM)."
-- Began installing for member companies of SBC Communications,
Inc. the first of approximately 28,000 additional
Series 5005S intelligent mobile units, including enhanced
proprietary software and services. Approximately 1,600 have
been installed to date.
-- Received orders for 500 additional Series 5000 mobile units
from a major customer, increasing their fleet to over 5,600
@Track units.
-- Signed a TrackWare test agreement in January with Dart Transit
Company, one of the nation's premier truckload carriers, to
test @Track's recently launched trailer-tracking solution.
There are currently five large companies in pilot programs.
-- Formed a strategic alliance, announced in April, with Lockheed
Martin Integrated Business Solutions, one of our nation's top
e-business systems integrators, that will provide enhanced
systems integration capabilities for the company's mobile
communications solutions for the transportation industry.
Service revenue for the 2000 first quarter was $12.2 million, down 4.0 percent from $12.7 million a year ago due to a decline in the number of installed units, reduced personal calling revenue and a higher percentage of service vehicles in the installed base from the 1999 first quarter. The service revenue gross margin percentage for the 2000 first quarter was 41.9 percent, compared with 46.2 percent, before the effect of the nonrecurring income items, for the 1999 first quarter. Including the one-time income items, the 1999 first quarter service revenue gross margin was 74.3 percent. Product revenue for the 2000 first quarter was $1.9 million, down 56.9 percent from $4.3 million for 1999.
The installed base at March 31, 2000, was 49,514 mobile units, compared to 52,263 at March 31, 1999. Deactivations of mobile units for the quarter exceeded additions by 1,311 units, which was primarily due to the Company's deactivation of one customer for non-payment.
"We currently anticipate that by the end of this year we will have installed approximately 3,000 Series 5000 units, 18,000 to 25,000 Series 5005S units and 15,000 to 25,000 TrackWare units," added Bell. "We believe that @Track's future remains promising as we continue to execute our technology plan to integrate multiple wireless voice and data networks and offer mobile platforms with open standard technologies. We expect that this will provide us with added product flexibility and shortened application development times, while providing significant value to our current and future customers."
- TABLES TO FOLLOW -
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share and units)
Three months ended
March 31,
--------------------------
2000 1999
------------ ------------
Revenues:
Product $ 1,870 $ 4,340
Service 12,233 12,741
------------ ------------
Total revenues 14,103 17,081
------------ ------------
Cost of revenues:
Product 1,341 3,144
Service 7,104 3,277 (1)
------------ ------------
Total cost of revenues 8,445 6,421
------------ ------------
Gross profit 5,658 10,660
------------ ------------
Expenses:
General and administrative 2,594 3,389
Customer service 1,725 1,818
Sales and marketing 1,097 914
Engineering 581 647
Network services center 352 419
Depreciation and amortization 1,429 1,624
------------ ------------
7,778 8,811
------------ ------------
Operating income (loss) (2,120) 1,849
Interest income 527 918 (1)
Interest expense (3,342) (3,342)
Other income 142 965 (1)
------------ ------------
Income (loss) before income taxes (4,793) 390
Income tax provision -- --
------------ ------------
Net income (loss) $ (4,793) $ 390
============ ============
Per share:
Basic and diluted income (loss) $ (0.19) $ 0.02
============ ============
Weighted average number of shares
outstanding
Basic 25,505 24,993
============ ============
Diluted 25,505 25,444
============ ============
Supplemental information:
EBITDA $ (549) $ 4,438 (2)
============ ============
Installed units -- beginning of
period 50,825 47,657
Net additions (1,311) 4,606
------------ ------------
Installed units -- end of period 49,514 52,263
============ ============
(1) Includes non-recurring income items of $4.7 million
associated with the settlement of certain litigation
matters and credits received from certain cellular
carriers related to prior periods.
(2) Excluding non-recurring income items EBITDA would have
been ($107).
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
ASSETS
March 31, December 31,
2000 1999
------------ ------------
Current assets:
Cash and short-term investments $ 18,906 $ 17,768
Accounts receivable, net 10,878 13,341
Inventories 9,917 9,292
Pledged securities --
current portion 6,362 12,705
Other current assets 3,192 2,588
------------ ------------
Total current assets 49,255 55,694
Network, equipment and software,
net 14,754 15,703
Other assets, net 2,568 2,676
------------ ------------
Total assets $ 66,577 $ 74,073
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 2,727 $ 2,431
Telecommunications costs payable 4,814 4,462
Accrued interest payable 541 3,784
Other current liabilities 8,904 9,357
------------ ------------
Total current liabilities 16,986 20,034
Senior notes payable 92,189 92,090
------------ ------------
Total liabilities 109,175 112,124
------------ ------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred Stock -- --
Common Stock 256 255
Additional paid-in capital 149,987 149,742
Accumulated deficit (192,294) (187,501)
Treasury stock (547) (547)
------------ ------------
Total stockholders' equity
(deficit) (42,598) (38,051)
------------ ------------
Total liabilities and
stockholders' equity
(deficit) $ 66,577 $ 74,073
============ ============
Note to Editors: The company name "@Track" is spelled with the "at symbol," which may not translate on some databases.