Intermap Technologies Corp. ("Intermap"or the"Company") today reported financial results for the third quarter ended September 30, 2008.
A conference call will be held today, October 27, at 4:30 p.m. EDT to discuss the results.
Financial Review
All amounts in this news release are in United States dollars unless otherwise noted.
For the third quarter of 2008, Intermap((tm))reported total revenue of $12.8 million, compared to $14.3 million in the third quarter of
2007. Intermap's contract services revenue component contributed $10.3 million and multi-client data license (MCDL) revenue from
NEXTMap((reg))datasets contributed $2.5 million of the total revenue.
"We set a new record for data deliveries in a single quarter, comprised of MCDL and contract services. The deliveries were from either
our MCDL library or the result of data collected in prior periods. This created invoicing in the quarter totaling $16.8 million. The
difference between this billing amount and the revenue recorded during the quarter relates to timing differences resulting from the use of
percentage-of-completion accounting on contract services,"stated Brian Bullock, president & CEO of Intermap Technologies."Total revenue from
NEXTMap data sales on a year-to-date basis is nearly double that of 2007. Since its inception, total revenue from NEXTMap licensing has
reached more than $42 million, and we have yet to make all of the United States and Western Europe commercially available."
In July, Intermap announced a follow-on contract to an existing international mapping project worth $4.3 million bringing the combined
total of these two contracts to $12.4 million. Additionally, in August and September the Company announced $6.2 million and $2.1 million
contracts for international projects using data that had been previously collected by the Company.
Aircraft deployment in the third quarter of 2008 was focused primarily on NEXTMap data collection in the United States while weather
conditions remained favorable. This led to the deferral of contract services collection in Asia until later in the fourth quarter.
Sales, general, and administrative (SG&A) expense for the third quarter was $7.8 million (year-to-date $22.9 million), compared to $6.0
million (year-to-date $17.3 million) for the same period in 2007. The majority of this increase is attributable to the costs of personnel in
the areas of business development (including automotive), recreational map-enabled GPS applications, insurance risk assessment, sales, and
marketing in support of the Company's MCDL data licensing.
Cost of Services expense totaled $0.8 million for the third quarter of 2008, compared to $3.1 million for the same period in 2007. The
$2.3 million decrease in expense was primarily the result of reduced aircraft hours flown on contract services work during the third quarter
of 2008, compared to the same period in 2007.
Amortization expense of the MCDL database for the third quarter decreased to $1.3 million (year-to-date increase to $5.2 million) from
$1.5 million (year-to-date $3.4 million) during the same period in 2007. The increase on a year-to-date basis was primarily due to increased
revenue associated with NEXTMap and an increase in the size of the underlying NEXTMap datasets.
Intermap reported net income of $0.2 million or $0.00 per share in the third quarter, compared to net income of $2.6 million or $0.06
per share for the same period in 2007. Positive earnings in the third quarters of 2007 and 2008 resulted primarily from increased revenues
associated with contract services programs. These contract services programs have the capability of producing substantial swings in revenue
on a quarter-to-quarter basis. Management generally does not expect profitable quarters during the current investment phase of the NEXTMap
build process. However, revenue recognized from large contract services programs may occasionally result in a profitable quarter as is
evident in the current reporting period.
For the nine months ended September 30, 2008, Intermap reported consolidated revenue of $27.4 million as compared to $27.6 million
during the same period in 2007. Contract services revenue on a year-to-date basis was $18.7 million in 2008, compared to $23.0 million for
the same period in 2007. MCDL revenue totaled $8.7 million in 2008, an increase of 87% over the same period in 2007. The increase in MCDL
revenue during 2008 is primarily due to the increased availability of NEXTMap data in the United States, Europe, and Indonesia.
Intermap added $0.5 million to its cash position during the quarter. Cash and cash equivalents at September 30, 2008 were $41.6 million,
compared to $56.8 million at December 31, 2007. The Company's working capital was $37.5 million at September 30, 2008, compared to $65.0
million at December 31, 2007.
"We are scheduled to collect at least 3.5 million km(2)of NEXTMap data in 2008,"added Mr. Bullock."That leaves us approximately 600,000
km(2)to collect next year, which will take about four months using one aircraft. This significant reduction in flying activity will reduce
our cash outflow by approximately $10 million in 2009. With our strong cash position, we believe we have sufficient capital to complete the
project as planned."
Operating Highlights
On September 22, 2008, Intermap's common shares were added to Standard & Poor's Canadian SmallCap Index. Over the past 12 months,
Intermap's share price, improved trading liquidity, and increased market capitalization were important factors in meeting the criteria for
the index inclusion.
During the quarter, Intermap signed an agreement with G-VR Limited, a London-based producer of three-dimensional digital models, to
incorporate NEXTMap's accurate elevation data for use with a wide range of computer-aided design 3D visualization applications including:
pre-development landscape modeling, engineering and design, architectural visualization, and computer gaming. The optimized TIN models are
now available off-the-shelf for Great Britain.
In the third quarter, Intermap also added to its management team with the hiring of Richard Eagle as vice-president of product strategy.
Mr. Eagle will help the Company to develop market and competition-driven product plans across the Company's business units through the
implementation of an integrated product management (IPM) methodology. He worked previously for IBM and Ford Motor Company where IPM was a
key part of their innovation strategy. The Company also recruited Adam Denman as vice-president of strategic business development in Europe.
In this capacity, he will lead Intermap into European industry segments including GIS, automotive, insurance, Internet, and 3D mapping. Mr.
Denman was the director of business development at automotive navigation system and telematics supplier Magneti Marelli. He also served as
the vice president of strategic marketing at NAVTEQ, where he helped define the digital map database provider's automotive strategy. Mr.
Denman has also held leadership positions at Johnson Controls and Visteon Corp.
Automotive Safety and Navigation Market
In addition to its office in Munich, Germany, in the third quarter Intermap added a Detroit-area office to support and accelerate
advanced automotive technologies in the industry. The Company is creating highly accurate 3D road vectors within NEXTMap to help improve
vehicle safety and enhance fuel efficiency in the transportation industry.
Next generation safety systems using high-precision 3D road vectors can provide vehicles with precise knowledge of the road ahead to
anticipate potentially dangerous situations, thereby helping reduce the number of serious injuries and fatalities. These 3D road vectors can
enable systems that alert drivers of upcoming curves and hills and are a critical element in the development of predictive headlights that
automatically follow the road by physically turning into curves and up and down according to the change in grade. Precision road vectors can
also provide advanced knowledge of the road ahead to automatically adjust engine and drive-line control units to increase fuel efficiency or
extend the range of electric power sources in hybrid vehicles.
GPS / Personal Navigation Devices (PND)
In July, Intermap jointly announced with Magellan((reg))the first commercial availability of Intermap's AccuTerra((tm))(
www.AccuTerra.com) maps for Magellan's Triton((reg))and eXplorist((reg))handheld GPS devices, providing outdoor enthusiasts with the
nation's best recreational map content. Customers can now download AccuTerra maps for recreational use, which are available for the
contiguous United States and Hawaii, from the Magellan Web site. Initial reaction by Magellan users has been positive and well over a
thousand users have downloaded the AccuTerra datasets. AccuTerra maps are available via download at
http://www.magellangps.com/products/software.asp. AccuTerra supports Magellan's Triton 400, 500, 1500, and 2000 units, and the eXplorist
400, 500, 600, and XL units.
Intermap also has a similar relationship with Bushnell Outdoor Products. Intermap's advanced AccuTerra topographic maps provide access
to digital terrain data, off-road and recreation-related roads, trails, and points of interest such as campgrounds, service facilities, and
landmarks. In addition, customers can benefit from a land management data layer that displays the location of public lands (national forest,
wilderness areas, state parks etc.) and private property for most recreation areas in the United States.
Risk Management Applications
Intermap recently completed a flood model for Hungary, adding to the flood models previously completed for the Czech and Slovak
Republics. The Company is also nearing completion of a flood model for a fourth country, which is scheduled to be announced in the fourth
quarter.
During the third quarter, Intermap announced an agreement with Guy Carpenter & Company, LLC, a leading global risk and reinsurance
specialist, and a part of the Marsh & McLennan group of companies. In collaboration with hydrological modeling experts JBA Consulting, the
group is developing comprehensive flood hazard maps and a state-of-the-art national flood model for mainland France. This will result in the
most detailed countrywide model of the French territory and will be available by the end of 2009. This product will be closely followed by a
fully probabilistic national flood model for France in early 2010. The model can enable insurance companies to better quantify their
exposure to flood hazards for reinsurance and risk management purposes. Once completed, Guy Carpenter will focus on marketing the flood
models to the re-insurance market while Intermap will concentrate its efforts on direct insurers.
In the third quarter, Intermap secured an agreement in the Czech Republic to launch a risk assessment service direct to home owners.
This service, which includes address-specific flood risk reports, is scheduled to be launched during the fourth quarter.
In addition to risk management applications for European flood modeling, Intermap is developing wind storm modeling and assessment
applications throughout Europe. The Company has teamed with a German-based firm with the technology to intersect synoptic wind fields with
Intermap's NEXTMap terrain models and develop very precise delineation of high-risk areas.
Insurance companies can use NEXTMap's superior insurance risk information to better define possible risks. The result can be more
effective portfolio management and a net reduction of costs through a reduced need for reinsurance coverage and lower payouts after
insurable events occur. Intermap is also in discussions with United States insurers for similar commercial insurance applications.
NEXTMap Europe
Intermap continued with the processing of its NEXTMap Europe data in the third quarter. NEXTMap Europe covers approximately 2.2 million
km(2)of area and encompasses 17 Western European countries. Great Britain and Germany have been processed in their entirety and are
currently available for purchase. Intermap will continue to make data available for the remaining European countries as the final processing
is completed. France is scheduled to be available in November, Italy by the end of December, and the remainder of Western Europe is expected
to be fully processed and available for purchase by March 31, 2009.
Subsequent to the close of the third quarter, Intermap announced a contract with the survey section of GEOinfo, the organization
responsible for the acquisition, generation, and dissemination of geodata in Lower Austria. The digital map data will be used for the
georectification of orthophotos and the general planning of a large construction project for the renewal of the Vienna International
Airport.
NEXTMap USA
NEXTMap USA is the Company's largest mapping program and includes terrain elevation and imagery data accurate to one-meter or better,
covering nearly 8 million square kilometers of the United States. Intermap collected over 1.2 million km(2)of NEXTMap USA data during the
third quarter of 2008. The total data collected since the inception of the NEXTMap USA program is 6.9 million km(2), or 86% of the
contiguous 48 states and Hawaii. The Company expects to have the NEXTMap USA program completed by December 31, 2009.
"We have been exceeding many of our production goals on the NEXTMap USA program and have seen a steady decrease in our cost per
km(2)since the beginning of the project,"said Mr. Bullock."We recently announced the commercial availability of the entire state of Oklahoma
and additional states will be announced as they become commercially available over the coming months. Recent sales of NEXTMap USA data
includes licenses of data to petroleum companies in North Dakota and wind energy farms in the midwest. Petroleum and wind energy represent
new markets for NEXTMap data and we foresee further sales in these verticals."
Intermap and FS Dreamscapes released the first products optimized for Microsoft Flight Simulator X for California, Hawaii, Mississippi,
Florida, and the United Kingdom. The NEXTMap elevation data used in this application is eight times the resolution and 64 times more
detailed than other previous terrain products for Flight Simulator.
NEXTMap data is available directly from Intermap or through selected partners worldwide.
Detailed financial results for the quarter and management's discussion and analysis can be found on SEDAR at: www.sedar.com.
Conference Call October 27, 2008 at 4:30 p.m. EDT (2:30 p.m. MDT)
Intermap will host a conference call today, October 27, 2008, at 4:30 p.m. EDT (1:30 p.m. PDT, 2:30 p.m. MDT, 9:30 p.m. GMT). To
participate in the call, please dial +1-416-695-5259 or +1-800-952-6845 approximately 10 minutes prior to the conference call. A recording
of the conference call will be available through November 3, 2008. Please dial +1-416-695-5800 or +1-800-408-3053 and provide the password
3273589 to listen to the rebroadcast.
About Intermap Technologies
Intermap (TSX: IMP)(AIM: IMAP) is a preeminent digital mapping company creating uniform high-resolution 3D digital models of the earth's
surface. The Company is proactively remapping entire countries and building uniform national databases, called NEXTMap((reg)), consisting of
affordably priced elevation data and geometric images of unprecedented accuracy. Demand for NEXTMap data is growing as new commercial
applications emerge within the GIS, engineering, automotive, GPS maps, insurance risk assessment, oil and gas, hydrology, environmental
planning, wireless communications, transportation, and 3D visualization markets.
Headquartered in Denver, Colorado, Intermap employs more than 875 people worldwide, with additional offices in Calgary, Detroit,
Jakarta, London, Munich, Ottawa, Paris, Prague, and Washington D.C. For more information, visit www.Intermap.com.
NEXTMap((reg))is a registered trademark of Intermap Technologies Corporation
Intermap Reader Advisory
Certain information provided in this news release constitutes forward-looking statements. The words "anticipate," "expect," "project,"
"estimate," "forecast" and similar expressions are intended to identify such forward-looking statements. Although Intermap believes that
these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily
subject to a variety of known and unknown risks and uncertainties. You can find a discussion of such risks and uncertainties in our Annual
Information Form and other securities filings. While the Company makes these forward-looking statements in good faith, should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those
expected. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what benefits that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to Intermap or persons
acting on its behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in
this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to
revise any of the forward-looking statements made herein, whether as a result of new information, future events or otherwise, except as may
be required by applicable securities law.
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Balance Sheet
(In thousands of United States dollars)
September 30, December 31,
2008 2007
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 41,619 $ 56,835
Amounts receivable 2,094 4,957
Unbilled revenue 1,593 11,741
Prepaid expenses 1,893 1,429
47,199 74,962
Property and equipment 22,542 23,372
Multi-client data library 75,696 55,113
Intangible assets 1,437 1,753
Future income taxes 243 329
$ 147,117 $ 155,529
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 7,605 $ 8,404
Deferred Lease inducements 215 219
Deferred revenue 441 340
Income taxes payable 129 19
Current portion of obligations under capital lease 375 231
Current portion of long-term debt 895 748
9,660 9,961
Deferred lease inducements 227 393
Obligations under capital lease 434 229
Long-term debt 2,718 3,016
Future income tax liability 345 421
13,384 14,020
Shareholders' equity:
Share capital 172,288 171,621
Contributed surplus 4,174 2,413
Deficit (48,923) (38,719)
Accumulated other comprehensive income 6,194 6,194
133,733 141,509
$ 147,117 $ 155,529
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Operations, Comprehensive Loss and Deficit
(In thousands of United States dollars)
For the three months For the nine months
ended September 30, ended September 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Contract services $ 10,285 $ 11,893 $ 18,649 $ 22,977
Multi-client data 2,563 2,365 8,744 4,667
licenses
12,848 14,258 27,393 27,644
Operating costs:
Cost of services 817 3,068 2,720 6,911
Research and 1,059 1,038 3,199 2,884
development
Sales, general and 7,838 5,994 22,870 17,297
administrative
Depreciation of 1,170 1,293 3,189 3,655
property and
equipment
Amortization of 1,349 1,482 5,181 3,412
multi-client data
library
Amortization of 106 106 316 247
Intangibles
12,339 12,981 37,475 34,406
Income (loss) before interest, income taxes
and foreign exchange
509 1,277 (10,082 ) (6,762 )
Interest expense (72 ) (34 ) (224 ) (110 )
Interest income 205 697 958 1,718
Gain (loss) on foreign currency translation (399 ) 633 (711 ) 581
Non-controlling interest - - - (7 )
Income (loss) before income taxes 243 2,573 (10,059 ) (4,580 )
Income tax expense (recovery)
Current 45 30 135 84
Future (4 ) (25 ) 10 (59 )
41 5 145 25
Net income (loss) and comprehensive income 202 2,568 (10,204 ) (4,605 )
(loss)
Deficit, beginning of period (49,125 ) (36,884 ) (38,719 ) (29,711 )
Deficit, end of period $ (48,923 ) $ (34,316 ) $ (48,923 ) $ (34,316 )
Basic and diluted income (loss) per share $ 0.00 $ 0.06 $ (0.22 ) $ (0.12 )
Weighted average number of Class A
common shares - 46,184,441 42,645,606 46,147,389 39,052,069
basic
common shares - 46,213,816 43,261,691 46,147,389 39,052,069
diluted
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Cash Flows
(In thousands of United States dollars)
For the three months For the nine months
ended September 30, ended September 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited)
(unaudited)
Cash flows (used in) provided by:
Operations:
Net income (loss) $ 202 $ 2,568 $ (10,204 ) $
(4,605 )
Items not involving cash and cash equivalents:
Depreciation of property and equipment 1,170 1,293 3,189
3,655
Amortization of multi-client data library 1,349 1,482 5,181
3,412
Amortization of intangibles 106 106 316
247
Stock Compensation Expense 617 636 2,009
1,608
Loss (gain) on sale on disposal of property & (1 ) 4 -
44
equipment
Amortization of deferred lease inducements (55 ) (51 ) (167 )
(122 )
Future income taxes (4 ) (25 ) 10
(59 )
Change in non-cash operating working capital 7,234 (11,602 ) 12,460
(10,063 )
10,618 (5,589 ) 12,794
(5,883 )
Financing:
Proceeds from issuance of common shares 25 35,615 418
37,312
Repayment of long-term debt (216 ) (141 ) (561 )
(417 )
Repayment of obligations under capital lease (61 ) (42 ) (153 )
(234 )
Common shares issuance costs - (2,381 ) -
(2,381 )
Proceeds of long-term debt - - 605
-
(252 ) 33,051 309
34,280
Investments:
Purchase of property and equipment (1,667 ) (2,858 ) (4,253 )
(7,633 )
Investment in multi-client data library (7,725 ) (7,010 ) (23,368 )
(16,353 )
Business Acquisition Cost - - -
(1,330 )
(9,392 ) (9,868 ) (27,621 )
(25,316 )
Effect of foreign exchange on cash (410 ) 912 (698 )
999
(Decrease) increase in cash and cash equivalents 564 18,506 (15,216 )
4,080
Cash and cash equivalents, beginning of period 41,055 33,744 56,835
48,170
Cash and cash equivalents, end of period $ 41,619 $ 52,250 $ 41,619 $
52,250
Supplemental cash flow information:
Cash paid for interest $ 72 $ 34 $ 224 $
109
Cash paid for Income Taxes 23 30 82
79
Intermap Technologies
Richard Mohr, 303-708-0955
Senior Vice President & Chief Financial Officer
rmohr@intermap.com
or
Canada - Financial
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Corbet Pala, 416-657-2400
Investor Relations
cpala@evestor.com
or
United States - Financial
Genesis Select Corporation
Budd Zuckerman, 303-415-0200
Investor Relations
bzuckerman@genesisselect.com
or
United Kingdom - AIM, Nominated Advisor
Canaccord Adams Limited
Andrew Chubb, +44-0-207-050-6500
Intermap Tech (LSE:IMAP)
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