TORONTO, ONTARIO — (Marketwired) — 06/24/15 — AirIQ Inc. (“AirIQ”) (TSX VENTURE: IQ), a supplier of wireless asset management services, today announced its financial results for the year ended March 31, 2015.
“I am very pleased to announce that for the first time in its history, the Company has generated profitable and positive cash flow results both on a quarterly and annual basis,” said Michael Robb, President and Chief Executive Officer of AirIQ. “This couldn–t have been done without the Company–s dedicated and loyal staff and the support of the Board and our customers,” continued Mr. Robb, “and I truly appreciate their efforts and support.”
“Mike and his team have done a tremendous job of turning the Company around, virtually from the time he took over as Chief Executive Officer”, said Vernon Lobo, Chairman of AirIQ. “Over the past year, the Company has generated positive EBITDAS, net income, operating cash flow and free cash flow, while also dramatically improving the balance sheet. To the best of our knowledge, AirIQ is the only publicly traded Canadian telematics Company in the last several years which has been able to deliver two or more consecutive quarters of profitability,” continued Mr. Lobo. “As a major shareholder, I am very pleased that Mike has been able to configure the business so that the gross profit from the recurring revenue stream covers fixed costs. As a result, new hardware sales are gravy and continue to add to recurring revenue. Also, with the Company–s significant tax loss assets, it means that AirIQ will not be paying taxes for the forseeable future. I look forward to the Company–s future as Mike and his team turn their attention toward even greater growth.”
Highlights of the quarter and the year are as follows:
Fourth Quarter Highlights:
Annual Highlights
Unless otherwise noted herein, and except share and per share amounts, all references to dollar amounts from this point forward are in thousands of Canadian dollars.
Business Review
The Company continues to focus on its key strategy elements to build revenues and reduce costs to achieve sustained profitability and positive cash flow and to seek opportunities to form value creating strategic partnerships.
Overview
The Company–s audited consolidated financial statements include the accounts of AirIQ and its subsidiaries, AirIQ U.S. Holdings, Inc., AirIQ U.S., Inc., and AirIQ, LLC. All inter-company balances and transactions have been eliminated on consolidation.
The Company–s audited consolidated financial statements as at and for the year ended March 31, 2015, including notes thereto, and Management–s Discussion and Analysis for the same period were filed with the Canadian securities regulatory authorities on June 24, 2015, and will be available on the Company–s website () and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) website ().
Revenues
Revenues for the year ended March 31, 2015, increased 14% to $2,795 from $2,456 for the year ended March 31, 2014. Approximately 69% of the total revenue for the year represents recurring revenue from the Company–s airtime customers.
Revenues received from equipment sold in connection with service contracts are recorded as deferred revenue and recognized over the initial term of the service contract.
Sales of hardware units associated with service contracts recorded to deferred revenues were approximately $881, during the year ended March 31, 2015, compared to $430 during the year ended March 31, 2014. Revenues recognized from deferred hardware revenues for the year ended March 31, 2015 were approximately $541 compared to $531 during the year ended March 31, 2014.
Overall, revenues related to service contracts sold in connection with hardware equipment increased by $144 or 8% from $1,797, for the year ended March 31, 2014 to $1,941 for the year ended March 31, 2015.
Included in the Company–s revenues are sales of units that were sold without a fixed term service contract of approximately $302 and $114 respectively, during the twelve months March 31, 2015 and March 31, 2014 respectively.
Gross Profit
Overall, gross profit increased by $89 or 6% to $1,667 for the year ended March 31, 2015 compared to $1,578 for the year ended March 31, 2014.
Equipment gross profits increased by approximately 3% to $255 during the year ended March 31, 2015 from $247 for the year ended March 31, 2014.
Service contract gross profits increased by approximately 6% to $1,412 for the year ended March 31, 2015 from $1,331 for the year ended March 31, 2014.
Expenses and Other Items
Sales and marketing, research and development and general and administrative expenses totalled $1,351 for the year ended March 31, 2015 compared to $1,822 for the year ended March 31, 2014.
Overall these expenses were reduced by $471 for the year ended March 31, 2015 when compared to the year ended March 31, 2014.
Expense reductions for the year ended March 31, 2015 when compared to the year ended March 31, 2014 were achieved in the following areas; (a) wage and related expense of approximately $167, (b) consulting fees were reduced by $139, (c) stock based compensation costs were reduced by $99, and (d) other cost reductions of approximately $74 related primarily to communication costs, facility costs, and computer operating costs. These savings were offset by an increase in legal expenses of approximately $8.
Net income/loss
The Company–s generated net income for the year ended March 31, 2015 of $202 or $.01 per share as compared to a net loss of $364 or ($0.02) per share for the year ended March 31, 2014, an improvement of $566.
The increase in net income for the year ended March 31, 2015 when compared to the year ended March 31, 2014 can be attributed to improvement in the following areas; a) expense reductions of approximately $471, b) a gain in foreign exchange of approximately $46, and c) increased gross profits of $89. These improvements were offset by an a) increase in amortization of approximately $10, and b) an increase in interest expense of $30.
Financial Statements & MDA
The Company–s consolidated financial statements for the year ended March 31, 2015 and 2015 including notes thereto, and Management–s Discussion and Analysis for the same period are being filed with the Canadian securities regulatory authorities on today–s date, and will be available on the Company–s website () and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) website (). The Company–s financial statements include the accounts of AirIQ and its subsidiaries, AirIQ U.S. Holdings, Inc., AirIQ U.S., Inc., and AirIQ, LLC. All inter-company balances and transactions have been eliminated on consolidation.
About AirIQ
AirIQ currently trades on the TSX Venture Exchange under the symbol IQ. AirIQ–s office is located in Pickering, Ontario, Canada. The Company offers a suite of asset management services that generate recurring revenues from each device deployed. AirIQ provides vehicle owners with the ability to monitor, manage and protect their mobile assets. Services include: instant vehicle locating, boundary notification, automated inventory reports, maintenance reminders, security alerts and vehicle disabling and unauthorized movement alerts. For additional information on AirIQ or its products and services, please visit the Company–s website at .
Forward-looking Statements
This news release contains forward-looking information based on management–s best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ–s operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as “hope”, “goal”, “anticipate”, “believe”, “expect”, “plan” or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including AirIQ–s perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors, which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes may differ materially from those expressed in such forward- looking statements. Forward-looking statements are provided for the purpose of providing information about management–s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of such information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
AirIQ Inc.
Michael Robb
President and Chief Executive Officer
(905) 831-6444, Ext. 4371
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