Remote Dynamics (OTCBB: RMTD) (www.remotedynamics.com), a provider
of asset tracking and fleet management solutions, reports its
financial results for the first quarter ended March 31, 2009.
Gary Hallgren, CEO of Remote Dynamics, commented, "We started
2009 well with a solid first quarter. We had negative adjusted
EBITDA of $18,000 during the first quarter due to contract defaults
being higher than expected due to the tough economic conditions.
However, we signed contracts with two large customers which will
represent two of the top three largest customers in our installed
base. Despite the tough economic conditions, we have been
successful in continuing to demonstrate value to our customers by
delivering a quick return on investment. We are also continuing to
expand our product offerings to satisfy customer demand."
Highlights for the quarter included:
REDIview subscriber base increased 9.3% from March 31, 2008 and
a 0.1% decrease since December 31, 2008. While new units were added
in the first quarter of 2009, we experienced contract defaults at a
higher rate than expected due to economic conditions. Ending
REDIview units were:
March 31, June 30, September 30, December 31, March 31,
2008 2008 2008 2008 2009
------------- ------------- ------------- ------------- -------------
10,182 10,462 10,787 11,210 11,129
-- Total revenue for the three months ended March 31, 2009 totaled $1.29
million compared to $1.21 million during the three months ended March 31,
2008. Service revenue for the three months ended March 31, 2009 totaled
$944,000 compared to $804,000 for the three months ended March 31, 2008.
This 17% increase is primarily attributable to an increase in units in
service. Average units in service increased 13%, from 9,871 units in the
first quarter of 2008 to 11,170 in the first quarter of 2009. Ratable
product revenue for the first quarter of 2009 was $307,000 compared to
$336,000 for the comparable period in 2008. The 9% reduction is due to the
completion of the amortization of the deferred performance obligation in
2008 which contributed to $138,000 of revenue in the comparable period of
2008 which was not included in the 2009 period. The amortization of the
deferred performance obligation was complete as of December 31, 2008. This
decrease was predominantly offset by an increase in ratable product revenue
of $109,000.
-- Total gross profit margin was 60% for the three months ended March 31,
2009 and the three months ended March 31, 2008. Service margin for the
first quarter of 2009 was 66% compared to 56% for the first quarter of
2008. This increase is primarily attributable to reduced costs of airtime
and mapping. Ratable product margin was 39% for the first quarter of 2009
compared to 66% for the first quarter of 2008. Excluding the amortization
of the deferred performance obligation, ratable product margin in the first
quarter of 2008 would have been 43%.
-- Total operating expenses totaled $1.0 million for the three months
ended March 31, 2009 and the three months ended March 31, 2008.
-- Interest expense totaled $0.4 million for the three months ended March
31, 2009 compared to $0.8 million for the same period during 2008. The
current period interest expense primarily consists of the accretion of the
Series B Notes of $228,000 as well as $33,000 of accrued interest on the
Series A Notes, $109,000 of accrued interest on the Series B Notes, and
$27,000 in amortization of deferred financing fees. The $410,000 decrease
in interest expense since the comparable period in 2008 can be primarily
attributed to $392,000 of accretion of the Series A Notes, as they were
fully accreted in February 2008.
-- Adjusted EBITDA was negative $18,000 for the first quarter of 2009
compared to negative $88,000 for the same period in 2008. The decrease in
adjusted EBITDA is attributable to growth in the installed base as well as
our efforts to improve gross margins.
Other Highlights for 2009 include:
-- In the first quarter of 2009 we made payments to certain holders of
our secured convertible notes of amounts due under the notes by issuing
shares of our common stock under the terms of the notes. For the Series A
notes, these payments were in the form of 3,011,738,755 shares of our
common stock in satisfaction of $601,381 of obligations due under the
Series A notes, representing issuance prices ranging from $.000117 to
$.000587 per share. For the Series B notes, these payments were in the
form of 1,047,937,537 shares of our common stock in satisfaction of
$185,961 of obligations due under the Series B notes, representing issuance
prices ranging from $0.000124 to $.000477 per share (for the Series B
Notes). We believe the issuance of the shares was exempt from registration
under Sections 3(a)(9) and 4(2) of the Securities Act and pursuant to
Regulation D under the Securities Act. All of the persons receiving shares
were accredited investors.
-- On April 17, 2009, we amended our Amended and Restated Certificate of
Incorporation to increase our authorized shares of our common stock to
15,000,000,000.
Non-GAAP Financial Measures
See Adjusted EBITDA Presentation below for a definition of
Adjusted EBITDA and reconciliation to the most comparable GAAP
financial measure.
About Remote Dynamics, Inc.
Remote Dynamics, Inc. markets, sells and supports a
state-of-the-art asset tracking and fleet management solution that
contributes to higher customer revenues, enhanced operator
efficiency and improved cost control. Combining the technologies of
the global positioning system (GPS) and wireless technologies, the
company's solution improves our customers' operating efficiencies
through real-time status information, exception-based reporting,
and historical analysis. The company is based in Plano, Texas. More
information about Remote Dynamics is available online at
http://www.remotedynamics.com.
Safe Harbor Statement
Some of the information in this letter may contain projections
or other forward-looking statements regarding future events or the
future financial performance of the Company. We wish to caution you
that these statements involve risks and uncertainties and actual
events or results may differ materially. Among the important
factors which could cause actual results to differ materially from
those in the forward-looking statements are general market
conditions, unfavorable economic conditions, our ability to execute
our business strategy, the effectiveness of our sales team and
approach, our ability to target, analyze and forecast the revenue
to be derived from a client and the costs associated with providing
services to that client, the date during the course of a calendar
year that a new client is acquired, the length of the integration
cycle for new clients and the timing of revenues and costs
associated therewith, potential competition in the marketplace, the
ability to attract and retain employees, our ability to maintain
our existing technology platform and to deploy new technology, our
ability to sign new clients and control expenses, and other factors
detailed in the Company's filings with the Securities and Exchange
Commission, including our recent filings on Forms 10-KSB and
10-QSB.
REMOTE DYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
Three months ended
March 31,
2009 2008
----------- -----------
Revenues
Service $ 944 $ 804
Ratable product 307 336
Product 38 65
----------- -----------
Total revenues 1,289 1,205
----------- -----------
Cost of revenues
Service 320 355
Ratable product 188 113
Product 4 13
----------- -----------
Total cost of revenues 512 481
----------- -----------
Gross profit 777 724
----------- -----------
Expenses:
General and administrative 432 401
Sales and marketing 186 185
Engineering 177 226
Depreciation and amortization 201 203
----------- -----------
Total expenses 996 1,015
----------- -----------
Operating loss (219) (291)
Other income (expenses):
Interest income 5 15
Interest expense (415) (825)
----------- -----------
Total other income (expenses) (410) (810)
----------- -----------
Loss before income taxes (629) (1,101)
Income tax benefit - -
----------- -----------
Net loss (629) (1,101)
=========== ===========
Net loss per common share - basic and diluted $ (0.00) $ (122.33)
----------- -----------
Weighted average number of common shares
outstanding:
Basic and diluted 2,938,312 9
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
REMOTE DYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31, December 31,
2009 2008
(unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 76 $ -
Accounts receivable, net of allowance for
doubtful accounts of $66 and $85, respectively 650 803
Inventories, net of reserve for obsolescence of
$7 and $7, respectively 157 153
Deferred product costs - current portion 586 580
Lease receivables and other current assets, net 230 246
----------- -----------
Total current assets 1,699 1,782
Property and equipment, net of accumulated
depreciation and amortization of $228 and $212,
respectively 92 102
Deferred product costs - non-current portion 349 352
Goodwill 616 616
Customer Lists, net 1,472 1,610
Software, net 459 502
Tradenames, net 40 44
Deferred financing fees, net 108 135
Lease receivables and other assets, net 22 22
----------- -----------
Total assets $ 4,857 $ 5,165
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 1,156 $ 1,363
Accounts payable - related parties 164 110
Deferred product revenues - current portion 970 952
Series A convertible notes payable 3,045 3,646
Series B convertible notes payable (net of
discount of $1,070 and $1,301, respectively) 5,879 5,834
Note payable - related parties 250 250
Accrued expenses and other current liabilities 2,619 2,392
Accrued expenses and other current liabilities
- related parties 112 106
----------- -----------
Total current liabilities 14,195 14,653
Deferred product revenues - non-current portion 584 588
Other non-current liabilities 30 34
----------- -----------
Total liabilities 14,809 15,275
=========== ===========
Commitments and contingencies
Redeemable Preferred Stock - Series B (3% when
declared, $10,000 stated value, 650 shares
authorized, 522 shares issued and outstanding at
March 31, 2009 and December 31, 2008, respectively
(redeemable in liquidation at an aggregate of
$5,220,000 at March 31, 2009)) 134 134
Redeemable Preferred Stock - Series C (8%
cumulative, $1,000 stated value, 10,000 shares
authorized, 5,379 and 5,274 shares issued and
outstanding at March 31, 2009 and December 31, 2008,
respectively (redeemable in liquidation at an
aggregate of $5,379,000 at March 31, 2009)) - -
Stockholders' deficit:
Common stock, $0.0001 par value, 5,000,000,000
shares authorized, 4,737,534,793 shares issued and
4,737,534,746 outstanding at March 31, 2009;
677,858,548 shares issued and 677,858,501
outstanding at December 31, 2008; 474 68
Treasury stock, 47 shares at March 31, 2009 and
December 31, 2008, respectively, at cost,
retroactively restated - -
Additional paid-in capital 2,056 1,675
Accumulated deficit (12,616) (11,987)
----------- -----------
Total stockholders' deficit (10,086) (10,244)
----------- -----------
Total liabilities and stockholders' deficit $ 4,857 $ 5,165
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
Adjusted EBITDA Presentation
EBITDA represents net income (loss) before interest, taxes,
depreciation and amortization, and in the case of Adjusted EBITDA,
before goodwill impairment, gains or losses on the extinguishment
of debt and preferred stock, restructuring charges and other
non-operating costs. EBITDA is not a measurement of financial
performance under GAAP. However, we have included data with respect
to EBITDA because we evaluate and project the performance of our
business using several measures, including EBITDA. The computations
of Adjusted EBITDA the respective quarters are as follows.
Three Months Ended
March 31,
2009 2008
---------- ----------
Net loss $ (629) $ (1,101)
Add non-EBITDA items included in net results:
Depreciation and amortization 201 203
Interest expense, net 410 810
---------- ----------
Adjusted EBITDA $ (18) $ (88)
---------- ----------
The company considers adjusted EBITDA to be an important
supplemental indicator of its operating performance, particularly
as compared to the operating performance of its competitors,
because this measure eliminates many differences among companies in
financial, capitalization and tax structures, capital investment
cycles and ages of related assets, as well as certain recurring
non-cash and non-operating items. It believes that consideration of
EBITDA should be supplemental, because EBITDA has limitations as an
analytical financial measure. These limitations include the
following: EBITDA does not reflect its cash expenditures, or future
requirements for capital expenditures or contractual commitments;
EBITDA does not reflect the interest expense, or the cash
requirements necessary to service interest or principal payments,
on its indebtedness; although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and EBITDA does not
reflect any cash requirements for such replacements; EBITDA does
not reflect the effect of earnings or charges resulting from
matters it considers not to be indicative of its ongoing
operations; and not all of the companies in its industry may
calculate EBITDA in the same manner in which it calculates EBITDA,
which limits its usefulness as a comparative measure.
Management compensates for these limitations by relying
primarily on its GAAP results to evaluate its operating performance
and by considering independently the economic effects of the
foregoing items that are not reflected in EBITDA. As a result of
these limitations, EBITDA should not be considered as an
alternative to net income (loss), as calculated in accordance with
generally accepted accounting principles, as a measure of operating
performance, nor should it be considered as an alternative to cash
flows as a measure of liquidity.
Contact: Gary Hallgren Chief Executive Officer 214-440-5202
Email Contact www.remotedynamics.com
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