AirIQ Inc. ("AirIQ") (TSX VENTURE:IQ), a supplier of wireless asset management
services, today announced its financial results for the year ended March 31,
2013.
"2013 was a transitional year for the Company," said Donald Gibbs, President and
Chief Executive Officer of AirIQ. "We achieved sequential growth for four
consecutive quarters and improved our operating cash flow by over $740 to a
small loss, while completing a major redesign of our software platform,"
continued Mr. Gibbs. "We believe we could have grown sales more, however,
hurricane Sandy had a major impact on two of our largest customers, both
reducing and delaying sales. In addition, our hardware supplier issued a
mandatory upgrade to its firmware that impacted our installed base, and involved
three months of intensive re-configurations, testing and OTA (over the air)
upgrades. Subsequent to the year end, the Company's business development efforts
were rewarded with the announcement of a contract with a major rental customer
which has the potential of adding over 30,000 units to our installed base,"
reported Mr. Gibbs.
The main highlights of the year were as follows.
1. Sequential revenue growth for four consecutive quarters.
2. Improved annual operating cash flow from a $764 loss to a $20 loss.
3. In June of 2012 the Company cleared a major lawsuit outstanding against
the Company.
4. In November, 2012, the Company closed a $300 financing comprised of a
$150 loan and a non-brokered private placement for gross proceeds of
$150.
5. During the year, the Company embarked on a major software upgrade to its
firmware platform.
6. Despite the major hurdles of Hurricane Sandy (which impacted heavily on
two of the Company's largest customers) and a mandatory software upgrade
from our hardware supplier, the Company was able to maintain its revenue
approximately level with the prior fiscal year.
7. The Company's ongoing commitment to reduce expenses resulted in an
improvement of $106 over the prior fiscal year.
Financial Highlights
Three months ended Twelve months ended
31-Mar-13 31-Mar-13
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Total Revenue $ 584 $ 2,324
Gross Margin $ 392 $ 1,571
Gross Margin % 67.1% 67.6%
Net Income (loss) $ (121) $ (437)
Net Income (loss) per share, basic
and diluted $ 0.00 $ (0.03)
EBITDAS(i) $ (66) $ (261)
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(i)The Company has included information concerning EBITDAS because it believes
that it may be used by certain investors as one measure of the Company's
financial performance. EBITDAS is not a measure of financial performance under
IFRS and is not necessarily comparable to similarly titled measures used by
other companies. EBITDAS should not be construed as an alternative to net income
or to cash flows from operating activities (as determined in accordance with
IFRS) or as a measure of liquidity.
Business Review
The Company continues to focus on its key strategy elements to build revenues
and manage costs to achieve sustained profitability and positive cash flow and
to seek opportunities to form value creating strategic partnerships.
Subsequent Events
Subsequent to the year end, on June 14, 2013, the Company reached an agreement
to settle outstanding debts in the aggregate amount of $165 with the issuance of
3,300,0000 common shares at a price of $0.05 per share, being the market price
of the shares pursuant to the policies of the TSX Venture Exchange.
The Company's lenders, Mosaic Capital Partners LP ("Mosaic") and 2204671 Ontario
Ltd. ("2204671"), agreed to accept common shares in satisfaction of the
principal amount due on the Company's outstanding promissory notes in the
aggregate principal amount of $150. In addition, 2204671 also agreed to accept
shares in settlement of a portion of trade payables owing by the Company in the
amount of $15. A total of 3,300,000 shares were issued; 2,000,000 to Mosaic, and
1,300,000 to Donald Gibbs, principal of 2204671.
Mosaic is a shareholder of the Company and Vernon Lobo, a director and Chairman
of AirIQ, is a managing director of Mosaic. 2204671 is a personal holding
company of Donald Gibbs, a director, President and Chief Executive Officer of
the Company. During the Company's approval of the transaction, Messrs. Lobo and
Gibbs each declared their conflict on the matter and abstained from voting in
respect of their interest.
The shares-for-debt transaction was to non-arm's length parties and was
conditional upon acceptance by the TSX Venture Exchange for which acceptance was
received. The common shares issued in satisfaction of the indebtedness are
subject to a four month statutory hold expiring on October 15, 2013. There was
no new control person created as a result of the issuance of the shares for
debt.
Following the shares for debt issuance, AirIQ now has a total of 21,358,947
common shares issued and outstanding.
Unless otherwise noted herein, and except share and per share amounts, all
references to dollar amounts are in thousands of Canadian dollars.
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, 2013, including notes thereto, and Management's Discussion and
Analysis for the same period were filed with the Canadian securities regulatory
authorities on July 29, 2013, and will be available on the Company's website
(www.airiq.com) and on the System for Electronic Document Analysis and Retrieval
("SEDAR") website (www.sedar.com).
Revenues
Revenues for the year ended March 31, 2013, decreased 2.4% to $2,324 from $2,380
for the year ended March 31, 2012. Approximately 74.0% 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 $654, during the year ended March 31, 2013, compared
to $515 during the year ended March 31, 2012. Revenues recognized from deferred
revenues for the year ended March 31, 2013 were approximately $595 compared to
$528 during the year ended March 31, 2012.
Overall, revenues related to service contracts sold in connection with hardware
equipment decreased by $93 from $1,812, for the year ended March 31, 2012 to
$1,719 for the year ended March 31, 2013.
Included in the Company's reported revenues are miscellaneous parts, repair,
warranty and lost unit sales of approximately $10 during the year ended March
31, 2013, compared to $40, for the year ended March 31, 2012.
Gross Profit
Overall, gross profit decreased by 11.5% to $1,571 for the year ended March 31,
2013 compared to $1,766 for the year ended March 31, 2012.
Equipment gross profits decreased by approximately 11.1% to $281 during the year
ended March 31, 2013 from $316 for the year ended March 31, 2012, due increased
hardware, repair and installation costs.
Service contract gross profits decreased by approximately 11.0% to $1,290 for
the year ended March 31, 2013 from $1,450 for the year ended March 31, 2012.
Expenses and Other Items
Sales and marketing, research and development and general and administrative
expenses totalled $1,877 for the year ended March 31, 2013 compared to $1,977
for the year ended March 31, 2012.
Overall these expenses were reduced by $100 for the year ended March 31, 2013
when compared to the year ended March 31, 2012.
Expense reductions for the year ended March 31, 2013 when compared to the year
ended March 31, 2012 were achieved in the following areas; a) wages and related
expense reductions of approximately $129 due to personnel reductions, b)
insurance premium reductions of approximately $36, c) computer operating expense
savings of approximately $33 due to the reduction of co-location costs, (d)
consulting fee costs were reduced by $26 and (e) other cost reductions of
approximately $15 related primarily to legal fees, communication costs and
public reporting fees. These savings were offset by increases in the following
areas; a) reduced contingent liability reversal of approximately $116, b)
general costs of $13, c) rent and facility costs of $10.
Net loss
The Company's net loss from continuing operations for the year ended March 31,
2013 was $437 as compared to a net loss of $310 for the year ended March 31,
2012 an increase of $127.
The increase in net loss for the year ended March 31, 2013 when compared to the
year ended March 31, 2012 can be attributed to improvement in the following
areas; a) expense reductions of approximately $100, b) decrease in amortization
of approximately $1, c) reduced interest expense of $9 and, d) the decrease in
foreign exchange of approximately $6. These improvements were offset by
decreases in the following areas; a) the increase in impairment of long lived
assets of $3, f) lower gain on business acquisition of $45 and, g) decreased
gross profits of $203.
No Conference Call
AirIQ will not be holding a conference call to discuss results. The Company's
financial statements, including complete financial statements and Management's
Discussion and Analysis will be available on the Company's website www.airiq.com
and at www.sedar.com on July 29, 2013.
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 delivers services to two primary markets: Commercial Fleets and
dealers that service Consumer segments. 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 www.airiq.com.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
AirIQ Inc.
Donald Gibbs
President and Chief Executive Officer
(905) 831-6444, Ext. 4255
dgibbs@airiq.com
www.airiq.com
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