CellPoint Inc. Reports Preliminary Results for the Year Ended June 30, 2001.Business Editors LONDON--(BUSINESS WIRE)--Aug. 29, 2001 - Strong Revenue Growth as Mobile Location Industry Gains Traction - Write-down in accordance with US GAAP in Preparation for Sale of Unwire - Growth in Revenues Outpaces Growth in Costs CellPoint Inc. (Nasdaq:CLPT) (STOCKHOLM:CLPT.), a global provider of mobile location technology and services, announces the Company's preliminary unaudited results for the fiscal year ended June 30th, 2001. Peter Henricsson, Chairman and Chief Executive Officer of CellPoint Inc., reports total revenues from continuing and 'discontinued operations' of $5,068,148 compared to $915,478 in revenues in the previous fiscal year. "We have recently experienced a marked increase in visibility and demand for mobile location solutions. This trend, coupled with the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). announced in July of this year, points to the Company reaching cash flow positive on a quarterly basis during this fiscal year," said Henricsson. US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Reporting for Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. The decision made in the fourth quarter of fiscal 2001 to focus on the location services See mobile positioning. business and put Unwire up for sale requires that the Company disclose the results of the telematics Originally coined to mean the convergence of telecommunications and information processing, the term later evolved to refer to automation in automobiles. GPS navigation, integrated hands-free cellphones, wireless communications and automatic driving assistance systems all come under the operations as 'discontinued operations' according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (US GAAP) requirements. Accordingly, the results of the telematics business area have been segregated from the results of the Company's ongoing business of location services. The historical financial statements have also been restated to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" this required presentation. Unwire remains a wholly-owned subsidiary of CellPoint Inc. at June 30, 2001 and today. However, Unwire's financial results are reported under Discontinued operations in the Consolidated Statements of Operations and its financial position is presented in the Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. under Net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of discontinued operations as the Company plans to sell this business this year. Results from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the The location services business area, referred to as 'continuing operations', reports that revenues this fiscal year rose five-fold to $4,111,804 compared to revenues of $839,003 in the previous year. Reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become * from continuing operations was -$9,899,813 for the year compared to -$5,514,456 in the previous year. Virtually all revenues in the year came from the European market. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. from continuing operations were $17,355,551, of which $3,931,215 was depreciation and amortization. Last year, operating expenses from continued operations were $7,947,067, of which $2,099,862 was depreciation and amortization. Selling, general and administrative expenses including research and development for continuing operations were $12,049,444 for the year compared to $4,320,399 in fiscal 1999/2000. The Company incurred a loss from continuing operations of $16,073,365. This compares to a loss of $7,652,249 for the same period ending fiscal 2000. These operating results are consistent with the rapid expansion called for in the Company's Business Plan for location technology and services. During the fiscal year, the Company expanded its operations to achieve commercialization of the location services technology, increased its marketing and development activities, and expanded staff to 130 persons 1compared to 71 a year ago. "Revenues were less than we had expected though, particularly during the fourth quarter due to the economic downturn, generally and in the telecoms sector, and also in part due to uncertainty surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. $10 million in convertible notes we issued in December 2000," said Henricsson. " While we have not lost any business we have been bidding on, orders have been delayed as a result and we expect an improvement this calendar year based on our current customer activities and that the convertible note situation is being cleared up. In addition, revenue recognition rules under US GAAP can generate spikes spikes see peplomer. and valleys in quarterly revenues reported; as such, we have not yet recognized all revenues from our current implementations." Combined Results from Total Operations A write off of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. within Unwire resulted in a loss of $43,624,886 attributed to the disposal of 'discontinued operations'. The intangible assets were valued initially based on the Company's stock price when Unwire was acquired in February 2000 for 1,075,000 shares and no cash. The majority of the loss on disposal of the 'discontinued operations' results from a write-down of these intangibles to their expected net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. . The loss from 'discontinued operations' of $10,876,197 represents the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of the telematics division for the fiscal year through the date of the Board approval for the sale of Unwire. This amount includes depreciation and amortization of $8,067,016. The net loss for the Company for the year was $70,574,448 of which the majority was attributed to the loss on disposal of and loss from 'discontinued operations' of $43,624,886 and $10,876,197 respectively. The net loss for the previous year was $11,831,260 including the loss from 'discontinued operations' of $4,179,011. The number of employees within 'discontinued operations' in the current period was 40 compared to 19 in the previous period. The total number of staff at the end of the fiscal year was 170 compared to 90 in the previous year. As a result of the write down for 'discontinued operations' in Unwire and the Company's operating losses in the telematics and location services segments, the stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at fiscal year end was $13,088,505 compared to $80,100,076 in the previous year. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Commentary "Considering the very difficult market and commercial backdrop Backdrop may refer to:
Henricsson continued, "On July 25, 2001, we announced a three-part restructuring to further focus CellPoint and take the Company to cash-flow positive in the quickest possible time. The restructuring consists firstly of a negotiated buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of the Convertible Notes owned by Castle Creek Castle Creek may refer to:
CellPoint intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: its marketing efforts during the year with demonstrations, tests and proposals to operators in Europe, Asia, 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. and the Middle East. "While the location services market had not taken off as expected during the fiscal year, we are really seeing strong demand today that is securely anchored by the mobile operators' stated needs to increase billable services," said Henricsson. "Today and going forward, it is about increasing services to boost average revenue per user (ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ) - our Mobile Location System (MLS See multilevel security. ) platform enables new billable services that are network-wide today with a seamless migration to next-generation mobile offerings. CellPoint's MLS works across today's 2G networks (current 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. worldwide), 2.5G (GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. ) and 3G/UMTS. This means no changes for operators or applications as GSM evolves - MLS is future-proof." Currently CellPoint has five commercial location platforms installed of which three were won in competitive bids. The Company is in active price negotiations for MLS implementation in more than 10 countries. Our partner program is focused on quality and fit and has yielded relationships with equipment manufacturers such as Compaq, enterprise infrastructure providers such as Oracle and systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. such as Sema. On the applications and content side through CellPoint's LDZ LDZ Latvijas Dzelzcels (Latvian Railways) LDZ Local Distribution Zone LDZ Lorenzo de Zavala (National Hispanic Institute program) , 426 independent application developers now have our open Application Programmer's Interface (APIs) to build locations application for MLS. Summary Highlights 2000 - 2001
-- CellPoint accepted for trading on the Nasdaq National Market
-- CellPoint Wins Competitive Bid at EuroTel - first winner of
competitive bid in the location services industry
-- CellPoint Signs Commercial Agreement with France Telecom Mobiles
for GSM location services
-- CellPoint Wins Competitive Bid at E-Plus - CellPoint delivers
world's first commercial network-based location services for
German mobile operator E-Plus
-- Listing in Europe - CellPoint successful in gaining secondary
listing and begins trading on the Stockholm OM Exchange, now
called Stockholmsborsen
- CellPoint Launches MLS - world's first network-based location
platform; enables location services for every subscriber in any
GSM network
-- Nokia Sponsors CellPoint to Join LIF (Location Interoperability
Forum)
-- iMate Service Announced - new breed of information services for
the mobile Internet
-- AirFlash and CellPoint Join Forces to offer integrated end-to-end
location-based services
Highlights after June 30
-- KPN-Group - CellPoint and E-Plus sign Group License Frame
Agreement for Mobile Location Systems with terms negotiated for
operators within the KPN-Group
-- A-GPS - CellPoint and SiRF partner to provide GSM/3G operators
with an Anytime, Anywhere Location Information Platform
-- Location Developers' Zone Launched, 426 Companies On Line - LDZ
facilitates third-party development of applications and services
targeted to CellPoint's mobile location platforms
-- Major Restructuring - CellPoint Announces Major Restructuring -
negotiates agreement for buyout of convertible notes, infusion of
new capital and Unwire subsidiary on the market
These unaudited preliminary results are released in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with reporting rules on the Swedish stock exchange, Stockholmsborsen. The Company's full report on Form 10KSB KSB Kogod School of Business (American University) KSB Kelley School of Business (Indiana University) KSB Kantonsschule Am Brühl St. will be filed with the SEC by September 28th and will be available at http://www.freeedgar.com and www.cellpoint.com. In September this year, CellPoint will announce the time and place for the Company's annual meeting to be held later this calendar year. CellPoint's Financial Calendar for the Next Fiscal Year Q1 2001/2002 for the quarter ending September 30, 2001 - November 15, 2001 Q2 2001/2002 for the quarter ending December, 2001 - February 14, 2002 Q3 2001/2002 for the quarter ending March 31, 2002 - May 15, 2002 Fiscal Year 2001/2002 for the year ending June 30, 2002 - Preliminary Results August 29, 2002; SEC 10KSB filing September 30, 2002 (*) EBITDA is defined as: Earnings (loss) before financial items, taxes, depreciation and amortization. CellPoint Inc. (Nasdaq and Stockholmsborsen: CLPT, www.cellpoint.com) is a US company with subsidiary operations in Sweden, Great Britain Great Britain, officially United Kingdom of Great Britain and Northern Ireland, constitutional monarchy (2005 est. pop. 60,441,000), 94,226 sq mi (244,044 sq km), on the British Isles, off W Europe. The country is often referred to simply as Britain. and South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. delivering location services in cooperation with cellular operators worldwide. CellPoint's end-to-end cellular location technology is a high-capacity system that works in unmodified Adj. 1. unmodified - not changed in form or character unqualified - not limited or restricted; "an unqualified denial" modified - changed in form or character; "their modified stand made the issue more acceptable"; "the performance of the modified aircraft GSM networks and uses standard GSM or WAP phones WAP phone n → teléfono WAP and standard Internet services. Several commercial applications are available for business and personal location services including Resource Manager(TM) for mobile resource management, iMate(TM) for location-sensitive information and Finder(TM), an application for locating friends and family. For information, please contact: CellPoint Inc.: Lynn Duplessis, Tel: +44 (0)1344 624 565, lynn.duplessis@cellpoint.com CellPoint(TM) and CellPoint Systems(TM) are trademarks of CellPoint Inc. 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. in this release are made pursuant to the safe harbor 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. provisions of the Private Securities 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. Act of 1995. Actual results may differ materially from those projected in any forward-looking statement. Investors are cautioned that such forward-looking statements involve risk and uncertainties which may cause actual results to differ from those described. Copyright (c) CellPoint Inc. 2001
CELLPOINT INC. and SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in US$)
June 30, June 30,
2001 2000
----------------------
ASSETS
Current assets:
Cash and cash $687 151 $6 624 392
equivalents
Accounts receivable,
net of allowance
for doubtful of
$nil and 36,732, 1 366 641 204 923
respectively
Unbilled 792 443 --
receivables
Prepaid expenses
and other current
assets 383 578 482 925
Other 402 132 196 241
receivables
Inventory -- 10 007
Total current
assets 3 631 945 7 518 488
Long-term assets:
Restricted 184 216 --
cash
Acquired technology
net of accumulated
amortization of $5,411,604
and $2,445,706 respectively 15 571 001 18 536 899
Investment in
affiliated -- 500 000
company
Capitalized software
costs and other
intangible assets,
net of accumulated
amortization of
$1,475,288 and $717,776
respectively 1 107 201 705 214
Furniture, equipment
and motor vehicles,
net of accumulated
depreciation
of $380,404 and $172,600
respectively 885 780 580 458
Net assets of
discontinued
operations 7 533 659 58 403 717
Total long-term
assets 25 281 857 78 726 288
Total assets $28 913 802 $86 244 776
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued expenses
and other current
liabilities $1 909 066 $1 377 726
Accounts 2 082 257 700 961
payable
Due to -- 55 517
affiliate
Current maturities
of long term debt and
other 4 000 000 10 496
Total current 7 991 323 2 144 700
liabilities
Long term debt,
net of current
maturities 7 785 510 4 000 000
Total $15 776 833 $6 144 700
liabilities
Minority 48 464 --
interest
Stockholders' equity:
Common Stock ($0.001 par value;
authorized - 22,000,000 shares,
10,824,503 shares and 10,465,000
shares issued and outstanding,
respectively) $10 824 $10 465
Additional paid-in 98 692 254 95 434 348
capital
Cumulative translation 597 478 292 866
adjustment
Accumulated -86 212 051 -15 637 603
deficit
Total stockholders'
equity 13 088 505 80 100 076
Total liabilities and stockholders'
equity $28 913 802 $86 244 776
CELLPOINT INC. and SUBSIDIARIES
Consolidated Statements of Operations
(Amounts in US$)
Year ended
--------------------------
June 30, June 30,
2001 2000
--------------------------
Revenues(*) $4 111 804 $839 003
Cost of -587 281 -506 254
revenues
Gross 3 524 523 332 749
profit
Selling, administrative,
research & development
expenses -12 049 444 -4 320 399
Professional -1 374 892 -1 526 806
fees
Depreciation and -3 931 215 -2 099 862
amortization
Total operating
expenses -17 355 551 -7 947 067
Loss from -13 831 028 -7 614 318
operations
Investment expenses:
Loss on sale of -342 285 --
investment
Net interest -1 900 052 -37 931
(expense)
Loss from continuing
operations -16 073 365 -7 652 249
Discontinued operations (**)
Loss from
discontinued -10 876 197 -4 179 011
operations
Loss on disposal of
discontinued
operations -43 624 886 --
Net -70 574 448 -11 831 260
Loss
Weighted average
shares outstanding
basic and diluted 10 532 913 8 743 630
Net loss per share
basic and diluted
Continuing -$1,53 -$0,88
operations
Discontinued -$5,17 -$0,48
operations
Net loss per -$6,70 -$1,35
share
EBITDA (***) for
continuing operations -9 899 813 -5 514 456
(*) Excludes revenues from discontinued operations which totalled $956,344 and $76,475 for the years ending 30 June, 2001 and 30 June, 2000 respectively (**) Includes revenues from discontinued operations which totalled $956,344 and $76,475 for the years ending 30 June, 2001 and 30 June, 2000 respectively (***) EBITDA is defined as: Earnings (loss) before investment expenses, taxes, depreciation and amortization |
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