ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for default Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.

DAT Datacom Wireless Corp

0.00
0.00 (0.00%)
Share Name Share Symbol Market Type
Datacom Wireless Corp TSXV:DAT TSX Venture Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0 -

Datacom Wireless Reorients Activities Around the Sale of Mobicom Fleet Management Solutions

30/07/2008 2:01pm

Marketwired Canada


Datacom Wireless Corporation ("Datacom" or "the Company"), (TSX VENTURE:DAT), a
Canadian leader in the design, development and marketing of mission critical
vehicle fleet management and theft prevention solutions today announced its
action plan to focus on Fleet Management solutions with its Mobicom product line
and Mobiguard product, following the announcement by wireless network operators
of their decision to cease providing analogue service.


Management initially believed that longer delays would be given by wireless
network operators for the termination of analogue service but said termination
is finally scheduled in November 2008. As previously indicated in the March 31st
2008 Management Discussion and Analysis report, this termination will mean that
some 9,000 Mobilus and Vigil security units will be unable to send or receive
signals, thus preventing them from detecting the theft of a vehicle or the
transmission of its location. Because of this situation, there will be a loss of
the recurring revenues that had been generated by these units, as of November
2008.


To maintain its recurring revenues, Datacom considered the option to replace
analogue units now in service with their digital counterparts. Such replacement,
would, however, have required the investment of $3,500,000 to $4,000,000,
clearly not warranted by the products' levels of profitability. The Company's
Board of Directors therefore decided not to offer the replacement of analogue
with digital units and take this opportunity to concentrate its efforts on the
Fleet Managament products where a larger potential of growth and profitability
exists.


Furthermore, based on an economic analysis demonstrating the unprofitability of
this sector of activity in this context, the Company will stop selling Mobilus
and Vigil Digital products over the third quarter and will focus its efforts and
financial resources around the sale of its flagship product: Mobicom, while
continuing with the sale of Mobiguard product.


In July 2008, the Company also finalized its agreements with its principal
clients with respect to the termination of analogue service. We shall maintain
analogue service until the scheduled network shutdown date for analogue units in
November 2008 and shall maintain digital service until December 31, 2010.


We estimate that the annual loss of recurring revenue for 2009 associated with
analogue security products (the digital product will continue to generate
revenues until December 31, 2010) will be approximately $1,085,000 with an
estimated reduction in the gross profit margin of $520,000. Management expects
to fully offset this loss of profit margin through cost-cutting efforts that
were initiated in the second quarter and that will continue due to the
reorganization that will follow the completion of this activity. Datacom will
lay off about a dozen employees within the next two months in the course of this
reorganization.


The anticipated cost of implementing the cost-reduction plan, expenses related
to agreements we have finalized with our principal clients with respect to the
termination of this activity and expenses for maintaining digital service until
December 31, 2010 are estimated at some $525,000, which we plan to pay according
to the following schedule: $475,000 in 2008 and $50,000 in 2010.


This decision complies with the action plan that the Company instituted at the
start of the second quarter and that is designed to enhance the Company's
profitability by orienting activities around profitable Fleet Management
solutions and by cutting operating expenses.


About Datacom Wireless Corporation:

Founded in 1999, Datacom has grown to become one of the Canadian leaders in the
design, development and marketing of mission critical vehicle fleet management
and theft prevention solutions. Its products and services use wireless
communications and satellite-based tracking technologies (GPS) and a
state-of-the-art ASP information portal. For further information, visit
www.datacom.com.


Forward-Looking Statements:

This press release includes certain statements that may be deemed
"forward-looking statements". Forward-looking statements are frequently
characterized by words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", and other similar words, or statements that certain
events or conditions "may" or "will" occur. All statements in this release,
other than statements of historical facts, that address future events or
developments that the Company expects or anticipates, are forward-looking
statements. Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such statements
are not guarantees of future performance and actual results or developments may
differ materially from those in forward-looking statements. Factors that could
cause actual results to differ materially from those in forward-looking
statements include market prices and general economic, market or business
conditions. There can be no assurance that forward-looking statements will prove
to be accurate, as results and future events could differ materially from those
anticipated statements. The Company undertakes no obligation to update
forward-looking statements if circumstances or management's estimates or
opinions should change. The reader is cautioned not to place undue reliance on
forward-looking statements.


All trademarks and brands mentioned in this release are the property of their
respective owners.


1 Year Datacom Wireless Corp Chart

1 Year Datacom Wireless Corp Chart

1 Month Datacom Wireless Corp Chart

1 Month Datacom Wireless Corp Chart