@Track Reports Second Quarter 2001 Financial Results; Includes $59.5 Million Extraordinary Gain on Early Extinguishment of Debt.Business/Technology Editors 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)--Auguest 14, 2001 @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 SCP (1) (Service Control Point) A node in an SS7 telephone network that provides an interface to databases, which may reside within the SCP computer or in other computers. : ATRK), a leading provider of wireless-based vehicle fleet management and intelligent mobile-asset-tracking solutions, today reported that net income for the second quarter of 2001 ended June June: see month. 30 was $50.8 million ($5.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), including an extraordinary gain of $59.5 million ($5.93 per diluted share) on early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of $80 million of the company's Senior Note debt. That compared with a net loss of $3.0 million ($0.59 per basic and diluted share) for the 2000 second quarter. Total revenues for the 2001 second quarter were $17.2 million, compared with $26.3 million for the 2000 second quarter. For the first six months of 2001, net income was $45.2 million ($5.86 per diluted share), including the extraordinary gain of $59.5 million ($7.71 per diluted share), compared with a net loss of $12.7 million ($2.51 per basic and diluted share), including a charge of $5.2 million ($1.03 per basic and diluted share) associated with the cumulative effect of adoption of Staff Accounting Bulletin 101 for the same period in 2000. Total revenues for the first six months of 2001 were $39.6 million, versus $42.6 million for the first half of 2000. "We noted in our 2001 first quarter earnings release in May that we expected second quarter revenues to be significantly below year-ago levels because we would not begin the next round of unit 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) until the third quarter of this year," 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. "In both remaining quarters of this year, we expect to recognize higher product revenues as we continue the installation of units for SBC member companies under previously signed agreements," Bell added. "We will also be concentrating on integrating the Minorplanet Vehicle Information(TM) (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 into our operations, which should provide additional opportunities to enhance product sales for the remainder of this year. "The real story for @Track during the 2001 second quarter can be read in our balance sheet, where we recorded substantial improvements in virtually every aspect of our financial condition due to the effects of the re-capitalization," added Bell. "While the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. economic viability of this company has been significantly enhanced, we have also substantially moved forward on our technology plan with product rights acquired through our strategic partnership with Minorplanet Systems PLC. We believe the VMI technology will enable us to compete very effectively to serve the 21-million-vehicle automatic vehicle location See mobile positioning. (AVL (Automatic Vehicle Location) See mobile positioning. ) market in the U.S." Highlights since the beginning of the 2001 second quarter included: -- The company's financial condition strengthened significantly as it completed the re-capitalization approved by stockholders at the June 4, 2001, Annual Meeting. @Track recorded an extraordinary gain of $59.5 million arising from the elimination of $80.0 million in face value, or 85 percent, of the company's outstanding Senior Notes. It also reduced by $11.0 million @Track's annual interest expense obligation. As a result, the company's net equity position jumped to $54.6 million from a negative $63.9 million prior to the transaction. -- @Track successfully retained its listing on the Nasdaq SmallCap Market as the company's significantly improved financial condition enabled it to comply with Nasdaq's continued listing requirements. This action enhances accessibility of the company's common stock to investors in the future. -- The company renewed extended service agreements representing about 44 percent of its existing long-haul customer base, including such major operators as Wal-Mart Stores, Inc. -- The company's new Minorplanet Systems USA subsidiary began operations with the launch in the Dallas/Fort Worth metroplex of its VMI(TM) solution for the AVL marketplace. The initial response to this limited marketing effort has been very encouraging. -- The company continues to upgrade the capabilities of its TrackWare solution for mobile asset management. Since April 1, 2001, the company has signed Scales Transport, T&M Transport and Jet Corr, Inc., a division of Pratt Industries, Inc., to agreements representing over 1,000 units. -- @Track now has more than 36,000 mobile units installed for SBC member companies, including enhanced proprietary software and services. The company believes this is the largest installation of its type in the United States. Product revenue for the 2001 second quarter was $1.9 million, versus $9.1 million for the comparable 2000 quarter, due to the significantly lower installations of service vehicle units in the second quarter this year from a year ago. Service revenue for the 2001 second quarter was $12.4 million, versus $12.0 million for the 2000 second quarter. The service revenue gross margin percentage for the 2001 second quarter was 44.8 percent, compared with 42.2 percent for the 2000 second quarter. The total installed base at June 30, 2001, was 68,211 mobile units, including 204 net units deactivated during the 2001 second quarter, compared with 53,621 at June 30, 2000. @Track Communications, Inc. (www.at-track.com), together with its 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. Minorplanet Systems USA Ltd., provides intelligent wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. products and services using state-of-the-art technologies and networks. The company offers mobile communications, emergency dispatch A dispatch or dispatches can refer to:
 Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , Contract
Freighters, Inc. (CFI CFIabbr. cost, freight, and insurance ) and member companies of SBC Communications, Inc. Currently holding 45 U.S. and foreign patents, with additional patents pending, @Track 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: member companies of SBC Communications, Inc.'s failure to issue purchase orders for and install the mobile units; ability to successfully commercially exploit VMI technology in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; ability to sustain or increase share price; availability of capital for expansion; general economic and business conditions; competition; ability to maintain margins; advertising and promotional efforts; acceptance of new product offerings; success of operating initiatives; development and operating costs operating costs npl → gastos mpl operacionales ; market conditions; changes in business strategy for development plans; business abilities and judgment of management and personnel; 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 Systems USA," "Vehicle Management Information" and "VMI" are trademarks and service marks of Minorplanet Limited, a wholly owned subsidiary of Minorplanet Systems PLC. "Minorplanet" is a federally registered trademark and service mark of Minorplanet Limited.
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share)
Three months ended Six months ended
June 30, June 30,
--------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- --------
Revenues:
Product $ 1,886 $ 9,081 $ 9,438 $ 10,135
Ratable product 2,952 5,214 5,481 8,239
Service 12,374 11,962 24,729 24,195
-------- -------- -------- --------
Total revenues 17,212 26,257 39,648 42,569
-------- -------- -------- --------
Cost of revenues:
Product 1,394 6,213 7,478 7,057
Ratable product 2,410 4,180 4,502 6,600
Service 6,833 6,909 13,453 14,013
Provision for settlement
of litigation 2,100 -- 2,100 --
-------- -------- -------- --------
Total cost of revenues 12,737 17,302 27,533 27,670
-------- -------- -------- --------
Gross profit 4,475 8,955 12,115 14,899
-------- -------- -------- --------
Expenses:
General and administrative 3,156 3,259 6,549 5,853
Customer service 1,944 1,717 3,945 3,401
Sales and marketing 989 1,250 2,148 2,347
Engineering 1,981 993 3,497 1,574
Network services center 460 317 869 669
Depreciation and
amortization 1,819 1,446 3,404 2,875
-------- -------- -------- --------
10,349 8,982 20,412 16,719
-------- -------- -------- --------
Operating loss (5,874) (27) (8,297) (1,820)
Interest income 125 366 308 893
Interest expense (2,950) (3,342) (6,292) (6,684)
Other income -- -- -- 142
-------- -------- -------- --------
Loss before income taxes,
cumulative effect of
accounting change and
extraordinary item (8,699) (3,003) (14,281) (7,469)
Income tax (provision)
benefit -- -- -- --
-------- -------- -------- --------
Loss before cumulative
effect of accounting
change and extraordinary
item (8,699) (3,003) (14,281) (7,469)
Cumulative effect of
accounting change -- -- -- (5,206)
Extraordinary item 59,461 -- 59,461 --
-------- -------- -------- --------
Net income (loss) $ 50,762 $ (3,003) $ 45,180 $ (12,675)
======== ======== ======== ========
Basic income (loss) per share:
Loss before cumulative effect
of accounting change and
extraordinary item $ (0.88) $ (0.59) $ (1.91) $ (1.48)
Cumulative effect of
accounting change -- -- -- (1.03)
Extraordinary item 6.03 -- 7.96 --
-------- -------- -------- --------
Net income (loss) $ 5.15 $ (0.59) $ 6.05 $ (2.51)
======== ======== ======== ========
Diluted income (loss) per share:
Loss before cumulative
effect of accounting change
and extraordinary item $ (0.87) $ (0.59) $ (1.85) $ (1.48)
Cumulative effect of
accounting change -- -- -- (1.03)
Extraordinary item 5.93 -- 7.71 --
-------- -------- -------- --------
Net income (loss) $ 5.06 $ (0.59) $ 5.86 $ (2.51)
======== ======== ======== ========
Weighted average number of
shares outstanding:
Basic 9,849 5,064 7,471 5,051
======== ======== ======== ========
Diluted 10,031 5,064 7,706 5,051
======== ======== ======== ========
Supplemental information:
EBITDA $ (4,055) $ 1,419 $ (4,893) $ 1,197
======== ======== ======== ========
Installed units --
beginning of period 68,415 49,514 67,336 50,825
Net additions (204) 4,107 875 2,796
-------- -------- -------- --------
Installed units --
end of period 68,211 53,621 68,211 53,621
======== ======== ======== ========
@TRACK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
ASSETS
June 30, December 31,
2001 2000
Current assets:
Cash and short-term investments $ 16,743 $ 20,641
Accounts receivable, net 9,500 12,738
Inventories 9,868 13,216
Deferred product costs - current
portion 6,633 7,406
Other current assets 1,542 1,759
--------- --------
Total current assets 44,286 55,760
Network, equipment and software, net 10,951 12,851
Deferred product costs - non-current
portion 6,848 9,770
License rights, net 38,862 -
Other assets, net 731 2,663
--------- --------
Total assets $ 101,678 $ 81,044
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 3,007 $ 7,992
Telecommunications costs payable 4,194 5,358
Accrued interest payable 1,887 3,784
Deferred product revenues - current
portion 8,021 8,975
Other current liabilities 7,411 8,826
--------- --------
Total current liabilities 24,520 34,935
Deferred product revenues -
non-current portion 8,517 11,966
Senior notes payable 14,079 92,484
--------- --------
Total liabilities 47,116 139,385
--------- --------
Commitments and contingencies (Note 10)
Stockholders' equity (deficit):
Common Stock 481 256
Common Stock - Class B - -
Preferred Stock - Series E - -
Additional paid-in capital 217,494 149,996
Accumulated deficit (162,866) (208,046)
Treasury stock (547) (547)
--------- --------
Total stockholders' equity (deficit) 54,562 (58,341)
--------- --------
Total liabilities and stockholders'
equity (deficit) $ 101,678 $ 81,044
========= ========
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