@Track Communications Announces 2001 Fourth Quarter Financial Results.Business Editors & High Tech Writers RICHARDSON Richardson, city (1990 pop. 74,840), Dallas and Collins counties, N Tex., a suburb of Dallas; founded in the 1850s, inc. as a city 1956. Richardson manufactures telecommunications equipment, medical devices, supercomputers, computer chips, and fiber optics. , Texas--(BUSINESS WIRE)--March 29, 2002 @Track Communications, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ATRK), a leading provider of wireless-based vehicle fleet management and intelligent mobile-asset-tracking solutions, today reported financial results for the 2001 fourth quarter and full year and discussed its business outlook for 2002. Financial Results Total revenues for the fourth quarter ended Dec. 31, 2001, were $18.4 million, compared with $29.8 million for the fourth quarter ended Dec. 31, 2000. Total revenues were lower primarily due to decreased installations for member companies of SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications, Inc. (NYSE NYSE See: New York Stock Exchange : SBC). The company reported a net loss for the 2001 fourth quarter of $8.0 million ($0.17 per share), including a $4.7 million ($0.10 per share) provision for inventory associated with circuit boards used in the manufacture of TrackWare(R) and 20/20V(TM). That compared with a net loss of $5.3 million ($1.04 per share) for the 2000 fourth quarter. The company's re-capitalization, completed in June June: see month. 2001, resulted in 48.0 million weighted average shares outstanding for the 2001 fourth quarter, versus 5.1 million for the 2000 fourth quarter. For the 12 months ended Dec. 31, 2001, total revenues were $77.5 million, versus $102.1 million for the 12 months of 2000. Total revenues were impacted throughout 2001 by the lower number of installations for SBC subsidiaries. Net income was $34.8 million ($1.23 per share), including an extraordinary gain of $59.5 million ($2.09 per share), the inventory provision of $4.7 million ($0.10 per share) and a provision for settlement of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. of $2.1 million ($0.04 per share). That compared with a net loss of $20.5 million ($4.06 per share) for the 12 months of 2000. Business Outlook "The financial results for the 2001 fourth quarter and year as a whole do not reflect the significant advances achieved by our company during 2001 as we positioned it for future sales growth and profitability," said Jana JANA Journal of American Nutraceutical Association JANA Jamahiriyah News Agency JANA Joint Army-Navy-Air Force Ahlfinger Bell, president and chief executive officer. "The transaction we completed in June significantly improved our financial condition by reducing our senior note debt and related interest obligation by 85 percent, and we acquired the leading-edge Vehicle Management Information (VMI VMI Virginia Military Institute VMI Vendor Managed Inventory VMI Vertical Motion Index VMI Valtakunnan Metsien Inventointi (Finnish: National Forest Inventory) VMI Video Module Interface (TM)) technology from Minorplanet Systems PLC, which now owns 62 percent of the company. We believe this technology opens a vast market at least 20 times larger than the long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. trucking market we had been serving. "The recent completion of our sale of certain assets and licenses related to our long-haul trucking and asset-tracking businesses is another key step in @Track's business strategy to focus its resources on aggressively penetrating penetrating breaching the tissues of the body. the metro marketplace with Minorplanet VMI technology, which we believe is the key to @Track's future growth," added Bell. "The metro business should significantly improve the company's profitability by increasing overall gross margins. "We have received excellent initial customer response to the VMI product that we test-marketed during the second half of 2001," Bell noted. "The company is now actively selling in three metropolitan areas, and we are pleased with our sales results to this point. We believe it will add significant revenues and earnings as we move into various major U.S. markets." About @Track Communications and Minorplanet Systems USA Ltd. @Track Communications (www.at-track.com), together with its subsidiary Minorplanet Systems USA Ltd., offers industry-leading, innovative vehicle-fleet-management solutions through its ability to combine wireless data and voice technologies with GPS-satellite-tracking capabilities. @Track is headquartered in Richardson, Texas Richardson is a suburb in Dallas County and Collin County, Texas. As of the 2000 census, the city had a total population of 91,803, while according to a 2006 estimate, the population had grown to 99,200. . Legal notice to investors: Certain matters discussed in this press release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " intended to qualify for the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. from liability established by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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," "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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors include, among others, the following: acceptance of new product offerings; market conditions; changes in business strategy; business abilities and judgment of management and personnel, and availability of qualified personnel. 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. "@Track Communications" and the red orb logotype are trademarks and service marks of @Track Communications, Inc. "Minorplanet" and "VMI" are federally registered trademarks and service marks of Minorplanet Limited, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Minorplanet Systems PLC. "Minorplanet Systems USA" is a trademark and service mark of Minorplanet Limited. "TrackWare" and "20/20V" are federally registered trademarks and service marks of Aether aether: see ether, in physics and astronomy. Aether god of whole atmosphere. [Gk. Myth.: Jobes, 42] See : Air Systems.
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2001 2000
------------ --------------
ASSETS
Current assets:
Cash and cash equivalents $ 14,889 $ 20,641
Accounts receivable, net 11,470 12,738
Inventories 2,913 13,216
Deferred product costs
- current portion 6,183 7,406
Other current assets 592 1,759
----------- -------------
Total current assets 36,047 55,760
Network, equipment and software, net 8,583 12,851
Deferred product costs - non-current
portion 4,516 9,770
License rights, net 37,848 -
Other assets, net 603 2,663
----------- -------------
Total assets $ 87,597 $ 81,044
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 2,517 $ 7,992
Telecommunications costs payable 3,584 5,358
Accrued interest payable 575 3,784
Deferred product revenues - current
portion 7,588 8,975
Other current liabilities 9,297 8,826
---------- -------------
Total current liabilities 23,561 34,935
Deferred product revenues -
non-current portion 5,748 11,966
Senior notes payable 14,109 92,484
---------- -------------
Total liabilities 43,418 139,385
---------- -------------
Stockholders' equity (deficit):
Common stock 481 51
Common stock - Class B - -
Preferred Stock - Series E - -
Additional paid-in capital 217,495 150,201
Accumulated deficit (173,235) (208,046)
Treasury stock (562) (547)
---------- -------------
Total stockholders' equity
(deficit) 44,179 (58,341)
---------- -------------
Total liabilities and stockholders'
equity (deficit) $ 87,597 $ 81,044
========== =============
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share)
Three months ended Twelve months ended
December 31, December 31,
------------------ ---------------------
2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Product $ 4,829 $ 15,815 $ 19,658 $ 41,971
Ratable product 2,246 1,838 9,864 12,093
Service 11,285 12,127 47,958 48,066
------- -------- -------- --------
Total revenues 18,360 29,780 77,480 102,130
------- -------- -------- --------
Cost of revenues:
Product 3,903 11,750 15,239 30,031
Ratable product 1,929 1,674 8,236 10,006
Service 5,947 9,260 26,563 30,636
Provision for inventory
reserve 4,693 - 4,693 -
Provision for settlement
of litigation - - 2,100 -
------- -------- -------- --------
Total cost of revenues 16,472 22,684 56,831 70,673
------- -------- -------- --------
Gross profit 1,888 7,096 20,649 31,457
------- -------- -------- --------
Expenses:
General and
administrative 3,154 3,742 12,482 12,478
Customer service 1,469 1,938 7,036 7,146
Sales and marketing 1,475 1,434 4,570 4,980
Engineering 798 1,613 5,166 4,345
Network services center 426 410 1,753 1,512
Depreciation and
amortization 2,069 1,543 7,438 5,907
------- -------- -------- --------
9,391 10,680 38,445 36,368
------- -------- -------- --------
Operating income (loss) (7,503) (3,584) (17,796) (4,911)
Interest income 65 216 501 1,371
Interest expense (525) (3,342) (7,355) (13,368)
Other income - 1,427 - 1,569
------- -------- -------- --------
Loss before income taxes,
cumulative effect of
accounting change and
extraordinary item (7,963) (5,283) (24,650) (15,339)
Income tax (provision)
benefit - - - -
------- -------- -------- --------
Loss before cumulative
effect of accounting
change and
extraordinary item (7,963) (5,283) (24,650) (15,339)
Cumulative effect of
accounting change - - - (5,206)
Extraordinary item, net - - 59,461 -
------- -------- -------- --------
Net income (loss) $ (7,963) $ (5,283) $ 34,811 $ (20,545)
======= ======== ======== ========
Basic income (loss) per share:
Loss before cumulative effect
of accounting change
and extraordinary item $ (0.17) $ (1.04) $ (0.88) $ (3.03)
Cumulative effect of
accounting change - - - (1.03)
Extraordinary item - - 2.13 -
------- -------- -------- --------
Net income (loss) $ (0.17) $ (1.04) $ 1.25 $ (4.06)
======= ======== ======== ========
Diluted income (loss) per share:
Loss before cumulative effect
of accounting change
and extraordinary item $ (0.17) $ (1.04) $ (0.87) $ (3.03)
Cumulative effect of
accounting change - - - (1.03)
Extraordinary item - - 2.09 -
------- -------- -------- --------
Net income (loss) $ (0.17) $ (1.04) $ 1.23 $ (4.06)
======= ======== ======== ========
Weighted average number of
shares outstanding:
Basic 48,047 5,065 27,928 5,058
======= ======== ======== ========
Diluted 48,047 5,065 28,406 5,058
======= ======== ======== ========
Supplemental information:
EBITDA $ (5,434) $ (614) $(10,358) $ 2,565
======= ======== ======== ========
Installed units
- beginning of period 69,862 60,716 67,336 50,825
Net additions 1,070 6,620 3,596 16,511
------- -------- -------- --------
Installed units - end
of period 70,932 67,336 70,932 67,336
======= ======== ======== ========
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