Wireless Matrix Announces Third Quarter Fiscal 2010 Results

Wireless Matrix Corporation, the leading provider of service chain performance management solutions targeting field service organizations, recently announced financial and operating results for the three and nine months ended January 31, 2010.

All currency is expressed in U.S. dollars.

Third Quarter 2010 Highlights

• Largest ever quarterly gain in subscribers, adding 10,845 new subscribers to its network, of which a record 9,976 or 92% are application subscribers.
• 86,864 subscribers at quarter-end, up 30% from 66,933 one year earlier.
• Total revenues of $10.3M in the third quarter, an increase of 4% over Q3 2009.
• Recurring subscriber service revenues of $7.2M, up 5% over last year's third quarter.
• Application service revenue of $2.7M, up 50% from Q3 2009.
• Adjusted EBITDA* of $1.1M, compared to $1.3M a year earlier.
• Net loss of $392,000 or $0.00 per share, compared to net income of $338,000 or $0.00 per share in Q3 2009.
• Subsequent to quarter-end, completed the third of three major deployments which will have added over 19,000 subscribers by the end of fiscal 2010.
• Cash collected subsequent to January 31, 2010 against accounts receivable was $4,300.

"Our strategy of transforming to a fleet management application company from a wireless data communication provider was realized this quarter by transitioning Sears onto our application platform. We added a record 10,845 new subscribers from Sears and other customers driving over 90% of the gross additions this quarter onto our application," said J. Richard Carlson, president and chief executive officer of Wireless Matrix. "Our focus in recent quarters on executing on customer deliverables and investing in infrastructure improvements has continued to yield results. We have now completed all three of the major deployments we initiated this year. Based on successful initial results, we received a follow-on order from one of them during the third quarter that will expand their deployment by an additional 10%. We have also made significant improvements to the scalability and reliability of our FleetOutlook solution that we expect to drive additional revenue while decreasing our operating expenses."

Financial Highlights
All currency in thousands except per share and ARPU data.		Three months ended					Nine months ended
		January 31					January 31
		2010			2009		2010			2009
Recurring service revenue		7,228			6,862		21,591			20,235
Hardware and license revenue		3,078			3,068		9,692			8,610
Total revenue		10,306			9,930		31,283			28,845
Gross margins*		5,596			5,607		17,284			16,442
Adjusted EBITDA*		1,050			1,310		3,214			3,372
Net (loss) income		$(392)			$338		$(499)			$1,192
Number of shares outstanding		82,590,426			82,447,331		82,361,416			82,569,095
Basic and diluted income (loss) per share:		$0.00			$0.00		$(0.01)			$0.01
Cash balance		14,219			17,933		14,219			17,933
Working Capital		11,237			13,908		11,237			13,908
Total subscribers		86,864			66,933		86,864			66,933
Average Revenue Per Unit (ARPU)*		$28.61			$33.15		$30.26			$33.19
* See Non-GAAP Measures below

Financial and Operating Review
Wireless Matrix's total revenues in the third quarter of 2010 were $10.3M, an increase of 4% from Q3 2009. For the first nine months of fiscal 2010, revenues of $31.3M represented an 8% increase over the comparable period in fiscal 2009. Revenue growth in the quarter was driven by application services revenue, which increased 50% to $2.7M as a result of an increase in subscribers. Management believes application services revenue will continue to experience strong organic growth for the remainder of fiscal 2010 due to ongoing subscriber additions.

The Company added 10,845 new subscribers in the third quarter of 2010, of which 92% were application subscribers who purchase the Company's FleetOutlook application on a Software-as-a-Service (SaaS), recurring revenue basis. The increase is due both to new customers, primarily the two large deployments which began in the first quarter of fiscal 2010, and existing customers expanding their subscriptions across their fleets. Wireless Matrix ended the quarter with 86,864 subscribers, a 30% increase over the 66,933 subscribers at January 31, 2009.

Total gross margin percentage was 54% in Q3 2010, compared to 57% a year earlier. Overall margins benefited from higher-margin service revenues comprising a greater percentage of total revenues compared to the previous year's third quarter; however, service gross margins decreased to 70% from 73% due to a contractual requirement to purchase additional satellite capacity for a multi-mode communications customer until it completes its transition to primarily cellular communications.

Wireless Matrix had a cash balance of $14.2M at January 31, 2010, compared to $12.9M at October 31, 2009. The Corporation has no debt, and its $4M line of credit remains unused.

Outlook
"Having completed new customer deployments totaling nearly 20,000 new subscribers in fiscal 2010," said Ms. Maria Izurieta, chief financial officer, "and moving product enhancements into general availability we have improved our competitive position. We are now able to focus more of our resources on winning new business. Infrastructure investments, while suppressing our short term results this year, have resulted in improved reliability and scalability and a more attractive business model going forward. We believe we are well positioned for continued growth into fiscal 2011."

Conference Call
Wireless Matrix has scheduled a conference call to begin at 10:00 a.m. ET on Tuesday, March 16, 2010, to discuss these results. The conference call dial-in number is 1-800-897-4035. A replay of the conference call will be available on the Company's website at www.wirelessmatrix.com or by dialing 1-800-558-5253, (code #21462111), shortly after the completion of the conference call until 11:59 p.m. ET on March 17, 2010.

About Wireless Matrix
Wireless Matrix Corporation is a leader in mobile resource management providing service chain execution solutions to enterprises with service fleets. Our solutions provide location intelligence for managing, measuring and monitoring service execution, while at the same time increasing productivity and reducing operating expenses within service fleet operations. The Wireless Matrix solution suite includes FleetOutlook, a web-based platform that provides management and fleet operators complete visibility into their operations, enabled by real-time wireless data communication services over a variety of proprietary modems and hardware devices. Wireless Matrix is headquartered in Herndon, Va., and has offices in San Francisco and Burnaby, British Columbia.

SOURCE: Wireless Matrix Corporation