@Track Communications Announces 2002 First 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)--May 10, 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 that total revenues for the 2002 first quarter ended March 31 were in line with expectations at $15.0 million, compared with $22.4 million for the 2001 first quarter, and the company reported a net loss for the 2002 first quarter of $4.4 million ($0.09 per share on 48.1 million shares), compared with a net loss of $5.6 million ($0.22 per share on 25.3 million shares) for the 2001 first quarter. Total revenues were significantly impacted by the 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) as installation of the current analog product nears completion. The company's contract with SBC was extended for a further year during the first quarter, and the company and Minorplanet Systems PLC are developing a next generation digital product targeted to large, nationwide service fleets of the type operated by SBC. During the first quarter, the company sold its 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. transportation-related assets for $15 million as part of its change in focus to concentrate on the more profitable "Metro The code name for Microsoft's XPS document format. See XML Paper Specification. " marketplace via the newly acquired 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. Proceeds from the sale are scheduled to be paid to @Track in the second and third quarters of 2002. "The first quarter sale of certain assets and licenses related to @Track's long-haul trucking and asset-tracking businesses was a key action which will enable the company to focus all of its resources on becoming the leading provider of vehicle fleet management information in the U.S.," 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. "VMI has the potential for very fast sales growth, coupled with significantly improved profitability due to higher overall gross margins." VMI Progress "Customer acceptance of the VMI system has been very positive, with sales exceeding company expectations, even though we are very early into our metropolitan market rollout," said Bell. "During the first quarter, we sold and installed 925 VMI units representing 152 new customers. Since commencing sales of VMI in July July: see month. 2001, we have sold and installed a total of 1,100 units through the first quarter of 2002, and we expect sales and installations of new units during the second quarter to be strong. Currently, the company has three sales locations in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; and Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. that were launched in July 2001, October October: see month. 2001 and January January: see month. 2002, respectively. "We are very pleased with our progress regarding launching our initial three markets and can see the sales momentum building," said Bell. "With the assistance of Minorplanet in the United Kingdom, we have put in place proven sales processes A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, achieving standardized customer interaction in sales and scalable revenue generation. and procedures that we believe form a solid foundation for continued market launches and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of VMI." Regarding indirect distribution of VMI, the company has been involved with several pilots with customers of GE Capital Fleet Services Fleet is a motorway service station on the M3 near Basingstoke. It is owned by Welcome Break. It was originally built in a Scandinavian style and in 1992 won "Loo of the Year". , and the feedback from the customers and GECFS has been very positive. @Track expects these pilots to be completed in the second quarter, after which GECFS is expected to begin actively marketing VMI to its over 500,000 U.S. leased vehicle fleet. About @Track Communications and Minorplanet Systems USA Ltd. @Track Communications (www.at-track.com) 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: ability of the company to launch new markets; ability of the company to successfully obtain a GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. cellular agent agreement; success of marketing VMI to leased vehicle customers of GECFS; ability to achieve rapid sales growth, higher gross margins and profitability; 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" is a federally registered trademark and service mark 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", "Vehicle Management Information" and "VMI" are trademarks and service marks of Minorplanet Limited.
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
ASSETS
March 31, December 31,
2002 2001
------------ ------------
Current assets:
Cash and short-term investments $ 13,974 $ 14,889
Accounts receivable, net 8,011 11,470
Inventories, net 1,613 2,913
Deferred product costs - current
portion 7,111 6,183
Notes Receivable 12,000 -
Other current assets 2,311 592
--------- ---------
Total current assets 45,020 36,047
Network, equipment and software, net 6,943 8,583
Deferred product costs - non-current
portion 2,998 4,516
License rights, net 37,189 37,848
Other assets, net 1,756 603
--------- ---------
Total assets $ 93,906 $ 87,597
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 1,926 $ 2,517
Telecommunications costs payable 2,374 3,584
Accrued interest payable 82 575
Deferred product revenues - current
portion 8,879 7,588
Deferred service revenues - current
portion 9,551 -
Other current liabilities 10,542 9,297
--------- ---------
Total current liabilities 33,354 23,561
Deferred product revenues - non-current
portion 4,094 5,748
Deferred service revenues - non-current
portion 2,225 -
Senior notes and other notes payable 14,260 14,109
--------- ---------
Total liabilities 53,933 43,418
--------- ---------
Stockholders' equity (deficit):
Common Stock 482 481
Common Stock - Class B - -
Preferred Stock - Series E - -
Additional paid-in capital 217,713 217,495
Accumulated deficit (177,660) (173,235)
Treasury stock (562) (562)
--------- ----------
Total stockholders' equity
(deficit) 39,973 44,179
--------- ----------
Total liabilities and
stockholders' equity (deficit) $ 93,906 $ 87,597
========= ==========
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share and units)
Three months ended
March 31,
------------------
2002 2001
---- ----
Revenues:
Product $ 1,448 $ 7,552
Ratable product 2,376 2,529
Service 11,158 12,355
-------- ----------
Total revenues 14,982 22,436
-------- ----------
Cost of revenues:
Product 1,075 6,084
Ratable product 1,914 2,092
Service 5,473 6,620
-------- ----------
Total cost of revenues 8,462 14,796
-------- ----------
Gross profit 6,520 7,640
-------- ----------
Expenses:
General and administrative 3,201 3,393
Customer service 1,271 2,001
Sales and marketing 3,266 1,159
Engineering 571 1,516
Network services center 373 409
Depreciation and amortization 1,829 1,585
-------- ----------
10,511 10,063
-------- ----------
Operating loss (3,991) (2,423)
Interest income 95 183
Interest expense (529) (3,342)
-------- ----------
Loss before income taxes (4,425) (5,582)
Income tax provision - -
-------- ----------
Net loss (4,425) (5,582)
======== ==========
Basic and diluted loss per share:
-------- ----------
Net loss $ (0.09) $ (0.22)
======== ==========
Weighted average number of shares
outstanding:
Basic and diluted 48,057 25,327
======== ==========
Supplemental information:
EBITDA $(2,162) $ (838)
======== ==========
Installed units - beginning of
period 39,781 33,853
Net additions (deactivations) (571) 1,971
-------- ----------
Installed units - end of period 39,210 35,824
======== ==========
Network subscribers - beginning of
period 31,151 33,483
Net additions (deactivations) (1,168) (892)
-------- ----------
Network subscribers - end of
period 29,983 32,591
======== ==========
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