Quarterly Revenues Up 8 Percent Sequentially; Significant Customer Wins Announced During Quarter
FREMONT, Calif. – October 26, 2006 – @Road, Inc. (Nasdaq: ARDI), a global provider of next-generation solutions for Mobile Resource Management (MRM), today announced its results for the quarter ended September 30, 2006.
Total revenues for the third quarter of 2006 were $25.2 million, an 8% sequential growth compared to $23.2 million for the second quarter of 2006. Hosted revenues for the third quarter of 2006 were $21.2 million, and licensed revenues for the third quarter of 2006 were $4.0 million. Net loss attributable to common stockholders for the third quarter of 2006 was $3.6 million, or $0.06 per diluted share.
For the nine months ended September 30, 2006, total revenues were $73.1 million, an 11% increase compared to $65.6 million for the same period in 2005. Hosted revenues for the nine months ended September 30, 2006 were $61.8 million, and licensed revenues for the same nine months were $11.3 million. Net loss attributable to common stockholders for the first nine months of 2006 was $10.1 million, or $0.16 per diluted share.
“@Road’s revenue for the third quarter of 2006 was above our target as we continued to monetize our sales orders. We are pleased that the momentum we saw during the first half of the year in sales orders continued into the third quarter,” said Krish Panu, president and CEO of @Road. “We have expanded our market footprint during the quarter as we are now offering our solutions in the UK and in Australia, as well as in North America. We also intend to leverage sales alliances which have the potential to help accelerate adoption of MRM solutions.”
Non-GAAP earnings before tax for the third quarter of 2006 was $2.1 million, or $0.03 per diluted share. Non-GAAP earnings before tax is calculated by adjusting GAAP net loss attributable to common stockholders for the impacts of stock-based compensation of $1.0 million, intangibles amortization expense of $1.0 million, an expense for the change in the value of the derivative instrument liability of $3.0 million, a benefit from income taxes of $0.2 million, and depreciation expense of $0.8 million.
Non-GAAP earnings before tax for the first nine months of 2006 was $1.6 million, or $0.03 per diluted share. Non-GAAP earnings before tax is calculated by adjusting GAAP net loss attributable to common stockholders for the impacts of stock-based compensation of $3.2 million, intangibles amortization expense of $3.0 million, an expense for the change in the value of the derivative instrument liability of $4.0 million, a benefit from income taxes of $0.9 million, and depreciation expense of $2.4 million.
A reconciliation of non-GAAP financial measures used in this press release to the GAAP financial measures and presentation of the most directly comparable GAAP financial measures can be found in the Reconciliation of GAAP to Non-GAAP Financial Measures, included below in this press release.
New Customers
New Services
Intellectual Property
Alliances
Awards
@Road will host a teleconference Thursday, October 26, commencing at 2:00 p.m. Pacific Time, to discuss the third quarter financial results. Participating in the call will be @Road President and CEO Krish Panu and CFO Mike Martini. All interested parties may listen by dialing 888-481-7939 or 617-847-8707, pass code 42874947, or by tuning into the webcast at www.road.com.
To supplement @Road’s consolidated financial statements presented in accordance with GAAP, @Road provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP earnings before tax and non-GAAP earnings before tax per diluted share.
@Road’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results.
These non-GAAP measures are provided to enhance investors’ overall understanding of @Road’s current financial performance and provide further information for comparative purposes due to the adoption of the new accounting standard FAS 123(R) during the first quarter of 2006.
Specifically, @Road believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. In addition, @Road believes the non-GAAP measures that exclude stock-based compensation enhance the comparability of results against prior periods. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the financial tables included below in this press release.
@Road, Inc. is a leading global provider of solutions designed to automate the management of mobile resources and to optimize the service delivery process for customers across a variety of industries. @Road delivers Mobile Resource Management solutions in three key areas: Field Force Management, Field Service Management and Field Asset Management. By providing real-time Mobile Resource Management infrastructure integrating wireless communications, location-based technologies, transaction processing and the Internet, @Road solutions are designed to provide a secure, scalable, upgradeable, enterprise-class platform, and are offered in on-demand software delivery, on-premise or hybrid environments that can seamlessly connect mobile workers in the field to real-time corporate data. @Road is headquartered in Fremont, Calif., and has a global presence with offices in North America, Europe and Asia. For more information on @Road solutions, visit www.road.com.
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Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Numerous factors, risks and uncertainties affect @Road’s operating results and could cause actual results to differ materially from forecasts and estimates or from any other forward-looking statements made by, or on behalf of, @Road, and there can be no assurance that future results will meet expectations, estimates or projections. These factors, risks and uncertainties include, but are not limited to, @Road historical and future operating results and profitability; the risk that demand for MRM solutions will not grow or will grow slower than anticipated; the ability of customers to improve operations as a result of using @Road solutions; the market acceptance of new @Road solutions such as AppSmart, DCM and other solutions mentioned in this press release; the ability of @Road to develop new solutions to meet market demand and deployment commitments; the ability of @Road and its alliances to market, sell and support @Road solutions; performance of @Road and its alliances, such as Telstra, Eaton, and LogicaCMG in accordance with the terms of their respective agreements; the ability of @Road to protect its intellectual property and enforce its intellectual property rights; the size and timing of purchasing and implementation decisions by BellSouth, Telstra, E.ON UK, The ServiceMaster Company and other prospects and customers; competition; the dependence of @Road on mobile data systems technology, wireless networks, network infrastructure and positioning systems owned and controlled by others; and general economic and political conditions. @Road cautions the reader that the planned appearances of @Road personnel, time and/or manner of the live teleconference, webcast and replays may change for administrative or other reasons outside @Road’s control. Further information regarding these and other risks is included in the @Road Annual Report on Form 10-K/A for the year ended December 31, 2005, the @Road Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2006, the @Road Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and in @Road’s other filings with the Securities and Exchange Commission.
@Road, the @Road logo, AppSmart, Taskforce and GeoManager are registered trademarks, trademarks or service marks of @Road, Inc. or its subsidiaries. All other marks used herein are the properties of their respective owners.
@Road, Inc. |
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Sept. 30, 2006 |
Dec. 31, 2005 |
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ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 17,015 |
$ 25,773 |
||
Short-term investments |
77,458 |
77,643 |
||
Accounts receivable, net |
16,950 |
12,475 |
||
Inventories |
17,146 |
6,087 |
||
Deferred product costs |
16,512 |
16,187 |
||
Deferred tax assets |
1,178 |
1,448 |
||
Prepaid expenses and other |
1,740 |
2,566 |
||
Total current assets |
147,999 |
142,179 |
||
Property and equipment, net |
7,673 |
6,195 |
||
Deferred product costs |
24,930 |
16,995 |
||
Deferred tax assets |
41,000 |
39,843 |
||
Goodwill |
13,341 |
13,341 |
||
Intangible assets, net |
24,303 |
27,333 |
||
Other non-current assets |
737 |
400 |
||
Total assets |
$ 259,983 |
$ 246,286 |
||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 10,744 |
$ 6,653 |
||
Accrued liabilities |
8,975 |
8,751 |
||
Derivative instrument |
6,899 |
1,457 |
||
Deferred revenue and customer deposits |
20,379 |
15,495 |
||
Total current liabilities |
46,997 |
32,356 |
||
Deferred revenue |
22,813 |
17,333 |
||
Deferred tax liabilities |
- |
323 |
||
Derivative instrument |
- |
1,457 |
||
Other long-term liabilities |
395 |
461 |
||
Total liabilities |
70,205 |
51,930 |
||
Commitments and contingencies |
||||
Preferred stock, $0.001 par value, 10,000 shares authorized, 98 shares designated as redeemable preferred stock, shares issued and outstanding: 77 at September 30, 2006 and December 31, 2005 |
8,556 |
8,184 |
||
Stockholders’ equity: |
||||
Common stock, $0.0001 par value, 250,000 shares authorized, shares issued and outstanding: 61,670 at September 30, 2006 and 61,154 at December 31, 2005 |
270,051 |
265,347 |
||
Note receivable from stockholder |
(4) |
(7) |
||
Accumulated other comprehensive loss |
(23) |
(78) |
||
Accumulated deficit |
(88,802) |
(79,090) |
||
Total stockholders’ equity |
181,222 |
186,172 |
||
Total liabilities, redeemable preferred stock and stockholders’ equity |
$ 259,983 |
$ 246,286 |
@Road, Inc.
|
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
2006 |
2005 |
2006 |
2005 |
|||||
Revenues: |
||||||||
Hosted |
$ 21,201 |
$ 18,965 |
$61,806 |
$58,140 |
||||
Licensed |
3,954 |
6,004 |
11,295 |
7,447 |
||||
Total revenues |
25,155 |
24,969 |
73,101 |
65,587 |
||||
Costs and expenses: |
||||||||
Cost of hosted revenue (excluding intangibles amortization included below) |
11,369 |
10,238 |
33,716 |
28,989 |
||||
Cost of licensed revenue (excluding intangibles amortization included below) |
1,205 |
1,481 |
3,562 |
3,654 |
||||
Intangibles amortization |
1,010 |
1,010 |
3,030 |
2,477 |
||||
Sales and marketing |
5,359 |
5,496 |
16,783 |
15,975 |
||||
Research and development |
3,922 |
3,487 |
11,801 |
9,911 |
||||
General and administrative |
4,498 |
4,724 |
14,468 |
13,113 |
||||
In-process research and development |
- |
- |
- |
5,640 |
||||
Total costs and expenses |
27,363 |
26,436 |
83,360 |
79,759 |
||||
(Loss) income from operations |
(2,208) |
(1,467) |
(10,259) |
(14,172) |
||||
Other (expense) income, net: |
||||||||
Interest income, net |
1,204 |
781 |
3,317 |
2,128 |
||||
Change in derivative instrument liability |
(2,969) |
4,845 |
(3,985) |
772 |
||||
Other income (expense), net |
339 |
17 |
317 |
(135) |
||||
Total other (expense) income, net |
(1,426) |
5,643 |
(351) |
2,765 |
||||
Net (loss) income before tax |
(3,634) |
4,176 |
(10,610) |
(11,407) |
||||
Benefit from income taxes |
164 |
33,822 |
898 |
37,017 |
||||
Net (loss) income |
(3,470) |
37,998 |
(9,712) |
25,610 |
||||
Preferred stock dividends |
(127) |
(124) |
(377) |
(305) |
||||
Net (loss) income attributable to common stockholders |
$ (3,597) |
$ 37,874 |
$(10,089) |
$ 25,305 |
||||
Net (loss) income per share: |
||||||||
Basic |
$ (0.06) |
$ 0.62 |
$ (0.16) |
$ 0.42 |
||||
Diluted |
$ (0.06) |
$ 0.61 |
$ (0.16) |
$ 0.41 |
||||
Shares used in calculating net (loss) income per share: |
||||||||
Basic |
61,721 ====== |
60,740 ====== |
61,484 |
59,571 |
||||
Diluted |
61,721 |
62,133 |
61,484 |
60,994 |
@Road, Inc.
|
|||
|
Three Months Ended |
Nine Months Ended |
|
Net loss attributable to common stockholders |
$ (3,597) |
$ (10,089) |
|
Adjustments: |
|
|
|
Stock-based compensation |
1,039 |
3,163 |
|
Intangibles amortization |
1,010 |
3,030 |
|
Change in value of derivative instrument liability |
2,969 |
3,985 |
|
Benefit from income taxes |
(164) |
(898) |
|
Depreciation expense |
826 |
2,437 |
|
Total adjustments |
5,680 |
11,717 |
|
Non-GAAP earnings before tax |
$ 2,083 |
$ 1,628 |
|
|
============================ |
||
Non-GAAP earnings before tax per diluted share |
0.03 |
0.03 |
|
============================ |
|||
Shares used in calculating non-GAAP earnings before tax per diluted share: |
63,276 |
63,222 |
|
============================ |
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Michael Martini
Chief Financial Officer
@Road
510-870-1099
mmartini@road-inc.com
David Lebedeff
Vice President Investor Relations
@Road
510-870-1317
dlebedeff@road-inc.com
Bob Stern
@Road Media Relations Manager
510-870-1360
bstern@road-inc.com
Copyright 2008 @Road, a Division of Trimble Navigation Limited. All rights reserved