Webtech Wireless Announces Q4 and FY 2013 Results

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Webtech Wireless Inc. 
TSX SYMBOL:  WEW 
MARCH 26, 2014 
Webtech Wireless Announces Q4 and FY 2013 Results 
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 26, 2014) - Webtech Wireless
Inc. (TSX:WEW) ("Webtech Wireless" or the "Company"), a
leading provider of vehicle fleet location-based services and telematics
technology, today announced its financial results for the three and
twelve-month periods ended December 31, 2013.  
The Company is reporting net income of $13.6 million for the twelve months
ended December 31, 2013, including $13.2 million in net income from
discontinued operations related to the sale of the Company's NextBus
business to Cubic Transportation Systems, Inc., a division of Cubic Corporation
on January 24, 2013.  
Unless otherwise noted, figures quoted in this press release relate to the
Company's continuing operations.  
Q4 2013 and 2013 Financial and Operational Highlights 
/T/ 
--  Adjusted EBITDA was $2.2 million for the year compared to $1.1 million 
in 2012 and $0.4 million in Q4 2013 compared to $0.0 million in Q4 2012. 
The continued focus on high margin revenue and cost management efforts 
have materially increased the Company's operating profitability. 
--  The Company is reporting a net loss of $0.3 million or $0.00 per share 
and net income of $0.3 million or $0.00 per share from continuing 
operations for the three and twelve months ended December 31, 2013 
compared to net income of $2.9 million or $0.03 per share and a net loss 
of $0.5 million or $0.00 per share in the prior comparable periods, 
respectively. 
--  Revenue was $30.1 million for 2013 compared to $28.8 million in 2012, 
and $7.2 million in Q4 2013 compared to $7.1 million in Q4 2012. The 
revenue increase was largely the result of hardware sales to a Fortune 
100 fleet customer and to the recently sold NextBus business. 
--  Recurring revenue was relatively flat at $18.4 million in 2013 or 61% of 
total revenue in 2013 compared to $18.5 million or 64% of total revenue 
in 2012. Q4 2013 recurring revenue was also relatively flat at $4.7 
million or 65% of total revenue for the period compared to $4.6 million 
or 66% for Q4 2012. 
--  Notable new sales, implementations and expansions during the quarter 
included continued expansion of the City of Cleveland and Commonwealth 
of Kentucky fleets; repeat sales with Strike Construction, Herzog 
Contracting, Wood Group Duval and Spady Transport; new contracts with 
the District of North Vancouver, Slegg Lumber, Zip Truck Lines and 
Empire Recycling Corporation; and continued sales to the new owners of 
NextBus. 
--  The Company's subscriber base at December 31, 2013 totalled 
approximately 80,000 compared to 79,000 at September 30, 2013 and 72,000 
at December 31, 2012. The increase in subscribers since September 30, 
2013 and December 31, 2012 is due to the addition of subscribers from 
sales and implementations in 2013, as well as new data pump subscribers 
from the recently sold NextBus business. 
--  Excluding the NextBus data pump subscribers, ARPU decreased to $20.00 
per subscriber for the year versus $21.45 per subscriber in the prior 
year, and $20.44 for Q4 2013 compared to $21.49 in Q4 2012. The decrease 
is the result of fleet expansions at Enterprise customers, which 
garnered a lower ARPU than pure SaaS subscribers. 
--  Gross margin was 58% of total revenue for the year, an increase from 53% 
in 2012 and 58% of total revenue in Q4 2013 compared to 46% in Q4 2012. 
The increase over the prior comparable periods were driven by a higher 
proportion of high margin hardware delivered and cost savings 
initiatives relating to recurring revenues. 
--  Cash operating expenses (sales and marketing, research and development, 
and general and administrative excluding non-recurring items) increased 
7% to $15.1 million in 2013 from $14.2 million in 2012 and 16% to $3.7 
million in Q4 2013 from $3.2 million in Q4 2012. The increase was due to 
an increase in R&D aimed at our new Driver Center product and sales and 
marketing headcount costs.  
/T/ 
"We are pleased to be reporting positive income results from continuing
operations for the year, as well as the large gain reported from the sale of
NextBus", said Scott Edmonds, President and CEO, continuing, "Our
product suite, led by our new Android solutions; our channel strategy, anchored
by AT&T in the US and by Bell in Canada; and our focus on our three chosen
verticals of winter maintenance, transport and oil and gas service fleets are
all aligned at achieving our business goal of acquiring and retaining recurring
revenue. Notable contracts in this quarter, include Strike Construction and
City of Cleveland where we expanded the size of the fleet under subscription.
Our Government team won new business with the District of North Vancouver and
with the State of Vermont - wins which will add new subscribers in 2014, and
our Commercial group continues to grow its customer base with sales to Slegg
Lumber and Zip Truck Lines in the quarter, which again will have a long term
impact on our subscriber numbers and revenues. We saw flat to little growth in
our full service subscriber counts and recurring revenues in 2013 as we
completed the flush out of non-strategic businesses and historical clients
whose requirements do not necessarily align with our long term business
vision." 
Mr. Edmonds continued, "As we look toward 2014, we expect to see our two
solutions - Quadrant and InterFleet become more tightly integrated and
eventually merged, allowing us to continually add new subscribers without
significantly impacting our expense line, and making the user experience richer
and more flexible for our users."  
Financial Highlights of Continuing Operations 
/T/ 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Three months ended           Twelve months ended      
---------------------------------------------------------------------------- 
December 31,   December 31,   December 31,   December 31, 
('000 of Cdn $)           2013           2012           2013           2012 
----------------------------------------------------------------------------
Hardware revenue  $      2,073   $      2,130   $     10,107   $      8,818 
Recurring                                                                   
 revenue                 4,652          4,634         18,415         18,502 
Services and                                                                
 other revenue             443            296          1,561          1,506 
---------------------------------------------------------------------------- 
7,168          7,060         30,083         28,826 
---------------------------------------------------------------------------- 
Gross margin ($)         4,146          3,223         17,325         15,265 
Gross margin (%)            58%            46%            58%            53% 
Total operating                                                             
 expenses(1)             4,608          1,683         17,726         16,657  
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net (loss)                                                                  
 income from                                                                
 continuing                                                                 
 operations       $       (250)  $      2,857   $        312   $       (511) 
Adjusted                                                                    
 EBITDA(2)                                                                  
 from continuing                                                            
 operations       $        440   $          7   $      2,244   $      1,124 
----------------------------------------------------------------------------
(1)  Total operating expenses, including non-recurring items.               
(2)  Adjusted EBITDA is not defined under IFRS. Adjusted EBITDA is defined   
by the Company as earnings (loss) before interest expense (income),     
taxes, depreciation, amortization, share-based payments, foreign        
exchange (gain) loss on operations, restructuring charges, and one-time 
expenses.                                                               
/T/ 
Revenue  
Hardware revenues for the year increased 15% largely due to deliveries of
hardware solutions to major customers, including a Fortune 100 corporate fleet
customer and to the recently sold NextBus business. Hardware revenues for the
quarter were in line with the prior year.  
Recurring revenues were flat for the year and Q4 2013 compared to the prior
periods. The Company has replaced the lost subscription revenue from the
planned exit of the theft recovery vertical with subscribers from sales and
implementations to both end users and enterprise customers over the past 12
months. The Company's shift away from hardware to a majority of
subscription, software and services revenue continues to reflect
management's focus on developing the Software as a Service
("SaaS") model.  
Service and other revenues for the year and Q4 2013 increased 4% and 50%
respectively, over the prior comparable periods as a result of higher volumes
of Government project management and customization services provided.  
Gross Margin  
Gross margin percentage for the year and Q4 2013 were stronger compared to the
prior comparable periods due to a higher proportion of high margin hardware
revenue delivered and cost savings initiatives related to recurring revenue.  
Operating Expenses  
Operating expenses for continuing operations excluding depreciation and
amortization, share-based payments and non-recurring items increased by 16% and
7% over the prior three and twelve month periods, respectively. The increase
for the quarter and year was largely due to research and development projects
primarily focused on the new Webtech Driver Center product and an increase in
sales and marketing employee costs.  
Cash and Working Capital  
As at December 31, 2013, the Company's unrestricted cash position amounted
to $23.2 million compared with $22.2 million at September 30, 2013 and $4.3
million at December 31, 2012. In addition, the Company has $2.1 million USD in
restricted cash related to the holdback from the NextBus transaction.  
As at December 31, 2013, the Company had net working capital of $27.1 million,
compared with $26.4 million at September 30, 2013 and $9.6 million at December
31, 2012. As at March 25, 2014, Webtech Wireless had 105,579,268 common shares
outstanding.  
Non-GAAP Financial Measures  
In addition to the results reported in accordance with IFRS, the Company uses
various non-GAAP financial measures, which are not recognized under IFRS, as
supplemental indicators of the Company's operating performance and
financial position. These non-GAAP financial measures are provided to enhance
the user's understanding of the Company's historical and current
financial performance and its prospects for the future. Management believes
that these measures provide useful information in that they exclude amounts
that are not indicative of the Company's core operating results and
ongoing operations and provide a more consistent basis for comparison between
quarters. Details of such non-GAAP financial measures and how they are derived
are provided in conjunction with the discussion of the financial information
reported. 
Results on a non-GAAP EBITDA basis are determined as follows: 
/T/ 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Three months ended         Twelve months ended      
-------------------------------------------------------- 
December 31,  December 31,  December 31,  December 31, 
('000 of Cdn $)              2013          2012          2013          2012 
----------------------------------------------------------------------------
Net (loss) income                                                           
 from continuing                                                            
 operations           $      (250)  $     2,857   $       312   $      (511)
Add (deduct)                                                                
  Finance (income)                                                           
expense                    (25)            9          (340)           48 
  Income tax                                                                 
(recovery)                                                                
expense                     (5)       (1,968)           34        (1,971)
  Depreciation and                                                           
amortization               194          (200)          619         1,380 
  Share-based                                                                
payments                    (5)           71            65           358 
  Foreign exchange                                                           
(gain) loss               (182)          (56)         (407)          196 
  Work force                                                                 
realignment                581            20           688           592 
  Strategic review                                                           
costs                       93             -           666             - 
  Litigation                                                                 
settlement and                                                            
other one-time                                                            
costs                       39           170           607           186 
  Impairment of                                                              
intangible assets            -           594             -           594 
  Restructuring cost                                                         
including share-                                                          
based payments               -           104             -           252 
  One-time costs                                                             
reclassified to                                                           
discontinued                                                              
operations                   -        (1,594)            -             - 
----------------------------------------------------------------------------
Adjusted EBITDA(1)                                                          
 from continuing                                                            
 operations           $       440   $         7   $     2,244   $     1,124 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
 (1) Adjusted EBITDA is not defined under IFRS. Adjusted EBITDA is defined   
by the Company as earnings (loss) before interest expense (income),     
taxes, depreciation, amortization, share-based payments, foreign        
exchange (gain) loss on operations, restructuring charges, and one-time 
expenses.                                                               
/T/ 
Financial Statements and Management Discussion & Analysis  
The Consolidated Financial Statements for the three and twelve months ended
December 31, 2013 and the related Management Discussion & Analysis for the
period has been filed on SEDAR at www.sedar.com, and also on the Company's
website at www.webtechwireless.com.  
Notice of Conference Call  
Webtech Wireless will hold a conference call today, March 26, 2014, at 11:00 am
ET hosted by Mr. Scott Edmonds, President and Chief Executive Officer and Mr.
Trevor Greene, Chief Financial Officer to discuss the Company's financial
results and corporate developments. To access the conference call by telephone,
dial +1.416.340.8527 or +1.800.769.8320. A taped replay of the conference call
will be archived on the Company's corporate website at:
www.webtechwireless.com. 
About Webtech Wireless(R) 
Webtech Wireless (TSX:WEW) is a leader in providing fleet management
telematics, GPS and automatic vehicle location (AVL) solutions that improve
efficiency, accountability and reduce costs. Our end-to-end solutions automate
record keeping and regulatory compliance, reduce fuel burn and idling, mitigate
risk, and keep drivers safe. Managers trust us to ensure people are accountable
and vehicles are visible. Through the cloud, in the office, or straight to
mobile devices, we deliver Fleet Intelligence Anywhere(TM). Our products are
InterFleet(R), for government winter maintenance, public works and waste
management fleets; and Quadrant(R), for commercial fleet operations and
compliance (HOS, EOBR). Please visit www.webtechwireless.com. 
All amounts in Canadian dollars (CAD$) unless otherwise noted. - The Toronto
Stock Exchange does not accept responsibility for the adequacy or accuracy of
this release. - Trademarks are the property of their owners. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Webtech Wireless Inc. - Investor Relations
Trevor Greene
Chief Financial Officer
+1 604.628.5195
investors@webtechwireless.com
or
Webtech Wireless Inc. - Press and Media
Mike Cornford
Director of Marketing
+1 604.419.8162
press@webtechwireless.com 
INDUSTRY:  Energy and Utilities - Oil and Gas , Government - Local, Government
- State, Telecom - Telecommunication Services, Transportation and Logistics -
Trucking 
SUBJECT:  ERN 
-0-
-0- Mar/26/2014 10:00 GMT
 
 
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