Wireless Matrix Announces Fourth Quarter and Year End Fiscal 2010 Results

Completion of major deployments leads to record subscriber growth

HERNDON, Va.--(BUSINESS WIRE)-- Wireless Matrix Corporation (TSX: WRX), the leading provider of service chain performance management solutions targeting field service organizations, today announced financial and operating results for the three and twelve months ended April 30, 2010.

All currency is expressed in U.S. dollars.

Fiscal 2010 Highlights

• Added a record 17,444 net subscribers during the fiscal year to end the year with 87,125 recurring revenue subscribers, an annual net growth of 25%.
• Application subscribers increased 59% to 40,479, now representing 46% of total subscribers.
• Total revenues grew 8% to $42.4 million.
• Recurring subscriber service revenues increased 5% to $29.0 million.
• Application service revenue increased 39% to $10.1 million.
• Adjusted EBITDA* of $4.0 million, a decrease of 10% from $4.5 million in fiscal 2009.
• Net loss of $682,000 or $0.01 per share, compared to net income of $1.5 million or $0.02 per share in fiscal 2009.
• Subsequent to year-end, announced strategy to expand from the enterprise space to begin targeting small and medium-sized businesses, and announced decision to focus our on software as a service (SaaS) business leading to over $2 million of annual savings.

Fourth Quarter 2010 Highlights

• Total revenues were $11.1 million in the fourth quarter, the highest revenue quarter in Company history, and an increase of 7% over Q4 2009.
• Recurring subscriber service revenues grew 1% to $7.4 million.
• Application service revenue increased 58% to $3.0 million.
• Net loss of $183,000 or $0.00 per share, compared to net income of $298,000 or $0.00 per share in Q4 2009.

“Fiscal 2010 was a very important and successful year for us,” said J. Richard Carlson, president and chief executive officer of Wireless Matrix. “We completed three major customer deployments that drove record subscriber growth and solidified our position in the enterprise space. At the same time, we accelerated our product roadmap and made important upgrades to our infrastructure that will improve scalability and reliability of our service. As we enter the new fiscal year, these accomplishments are enabling us to focus on opportunities in our rapidly growing SaaS business.”

Financial Highlights

* See Non-GAAP Measures below

Financial and Operating Review

Wireless Matrix’s total revenues for the year ended April 30, 2010 were $42.4 million, an increase of $3.2 million or 8% over 2009 revenues. Revenue growth was driven by a $2.8 million increase in application services revenue resulting from a 59% increase in application subscribers. This growth, along with a $1.7 million increase in hardware and license revenues, more than offset a $1.4 million decrease in network services revenues incurred as the Company continues to transition from its historic role as a provider of satellite wireless data communication services to a provider of application subscriptions enabled by lower cost cellular wireless communication services.

The Company added 26,809 new subscribers in fiscal 2010, of which 71% were application subscribers who purchase the Company’s FleetOutlook application on a Software as a Service (SaaS), recurring revenue basis. The increase was driven by three major deployments completed during the year, as well as existing customers expanding their subscriptions across their fleets. Wireless Matrix ended the year with 87,125 subscribers, a 25% increase over the 69,681 subscribers at April 30, 2009.

Total gross margin percentage was 54% in fiscal 2010, compared to 58% a year earlier. The decrease was largely due to a contractual requirement to purchase additional satellite capacity for a satellite wireless data communications customer during its transition to primarily cellular wireless data communications.

Wireless Matrix had a cash balance of $14.0 million at April 30, 2010, compared to $14.2 million at January 31, 2010. The Corporation has no debt, and its $4 million line of credit remains unused.

Outlook

“With our decision to focus on our software-as-a-service (SaaS) business, we are well positioned to drive continued growth in our higher-margin application services revenue while accelerating growth in our EBITDA in the coming fiscal year. We expect to surpass our 100,000 subscriber target this year and to secure an increasing number of small- and medium-sized businesses, reflecting our recent push into this segment of the market,” said Maria C. Izurieta, chief financial officer of Wireless Matrix.

For fiscal 2011, the Company is expecting:

• Growth in adjusted EBITDA of more than 50% over fiscal 2010, driven by increased gross margins and improved operational efficiencies.
• Recurring network services revenue will be comparable to 2010 levels, with applications services revenue growth in excess of 20% offset by expected declines in satellite wireless data communications revenue.
• Hardware revenue will decline reflecting the Company’s decision to outsource production of its previously self-designed hardware devices.

Conference Call

Wireless Matrix has scheduled a conference call to begin at 10:00 a.m. EDT on Friday, June 23, 2010, to discuss these results. The conference call dial-in number is 800.909.4197. A replay of the conference call will be available on the Company’s website at www.wirelessmatrix.com or by dialing 800.558.5253 (code#21475998), shortly after the completion of the conference call until 11:59 p.m. EDT on July 25, 2010.

About Wireless Matrix

Wireless Matrix Corporation (TSX: WRX) is a leader in mobile resource management providing service chain execution solutions to enterprises with service fleets. Our solutions provide location intelligence for managing, measuring and monitoring service execution, while at the same time increasing productivity and reducing operating expenses within service fleet operations. The Wireless Matrix solution suite includes FleetOutlook®, a web-based platform that provides management and fleet operators complete visibility into their operations, enabled by real-time wireless data communication services and hardware devices. Wireless Matrix is headquartered in Herndon, Va., and has offices in San Francisco, California and Burnaby, British Columbia.

Non-GAAP measures

In addition to providing measures in accordance with Canadian GAAP, Wireless Matrix presents certain supplemental measures that are used by Management to manage and measure operations. These are gross margin, operating expenses, adjusted EBITDA, current liabilities before deferred product revenue, ARPU, and churn rates. These measures do not have any standardized meaning prescribed by Canadian GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Investors are urged to refer to the “Supplemental Non-GAAP measures” section in our Management Discussion and Analysis for more details.

Forward Looking Statements

General information regarding the Corporation set forth in this document, including management’s assessment of the Corporation’s future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation’s and management’s control, including but not limited to, the impact of general economic conditions, industry conditions, market demand, dependence on key customers, financial conditions and wherewithal of customers, non-infringement on third-party technology, ability to grow through acquisition, technological aptitude of products and intellectual property rights, inventory management, fluctuation of commodity prices, fluctuation of foreign exchange rates, imperfection of estimates, effective integration of acquisitions, industry competition, availability of qualified personnel and management, stock market volatility, timely and cost-effective access to sufficient capital from internal and external sources, ability to integrate and realize anticipated benefits from acquisitions, ability to procure and resell third party network communications at favorable rates, and to effectively manage growth. The Corporation’s actual results, performance or achievement could differ materially from those expressed in or implied by, these forward-looking statements and accordingly, no assurance can be given that any of the events anticipated to occur or transpire from the forward-looking statements will provide what, if any, benefits to the Corporation. All data presented herein should be read in conjunction with the Corporation’s regulatory filings, with the appropriate Securities Commission and SEDAR. These filings, including the Corporation’s AIF, are located at www.sedar.com.

CONTACT:

Investor Relations
Wireless Matrix
Maria C. Izurieta, 703-262-4020
maria.izurieta@wirelessmatrix.com
or
The Equicom Group
Jeff Codispodi or Craig Armitage
416-815-0700 ext 261 or 278
jcodispodi@equicomgroup.com or carmitage@equicomgroup.com

KEYWORDS:   United States  North America  Canada  Virginia

INDUSTRY KEYWORDS:   Technology  Data Management  Software  Telecommunications  Transport  Satellite  Trucking  Mobile/Wireless  Logistics/Supply Chain Management

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