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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Remote Dynamics Inc (CE) | USOTC:RMTD | OTCMarkets | 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% | 0.000001 | 0.00 | 01:00:00 |
Gary Hallgren, CEO of Remote Dynamics, commented, "We continued our momentum from the second quarter with an excellent third quarter. We had positive adjusted EBITDA of $121,000 during the third quarter and continued growth of our subscriber 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 12.8% in the first nine months of 2008 and 19.1% on a year-over -year basis since September 30, 2007.
September December September 30, 31, March 31, June 30, 30, 2007 2007 2008 2008 2008 ---------- ---------- -------- ---------- ---------- Ending REDIview units 9,057 9,560 10,182 10,462 10,787
-- Total revenue for the three months ended September 30, 2008 was $1.38 million compared to $1.16 million during the three months ended September 30, 2007. The 19.3% increase in revenue from the comparable period in 2007 is primarily attributable to REDIview unit growth. -- Total gross profit margin was 66% for the third quarter 2008 compared to 56% for the third quarter of 2007. Reduced costs of airtime and mapping costs were the primary reasons for the increase in gross margins. Of the 66% gross profit margin, 4 percentage points represents amortization of the deferred performance obligation of our installed base related to the reverse merger transaction on December 4, 2006. We expect gross profit margins of greater than 55% to continue through 2008. -- Total operating expenses totaled $989,000 for the three months ended September 30, 2008 compared to $904,000 for the three months ended September 30, 2007. This $85,000 or 9.4% increase is primarily attributable to increased bad debt expense and payroll expenses. -- Interest expense totaled $0.3 million for the three months ended September 30, 2008 compared to $1.4 million for the same period during 2007. The current period interest expense primarily relates to the accretion of the Series B Notes in the amount of $248,000. The $1,017,000 decrease in interest expense since the comparable period in 2007 can be primarily attributed to the fact that the Series A Notes were fully accreted in February 2008. The accretion of the Series A Notes was $0 for the three months ended September 30, 2008 compared to $0.7 million for the three months ended September 30, 2007. Additionally, default interest and liquidated damages on the Series A and Series B Notes totaled $513,000 for the three months ended September 30, 2007 versus $50,000 for the three months ended September 30, 2008. -- Adjusted EBITDA was positive $121,000 for the third quarter of 2008 compared to negative $27,000 for the same period in 2007. Adjusted year to date EBITDA was positive $91,000 for the nine months ended September 30, 2008 compared to negative $279,000 for the same period in 2007. The return to positive EBITDA is attributable to continued sales growth as well as our efforts to reduce operating expenses and improve gross margins.
Other Highlights for 2008 include:
-- Through the first nine months of 2008, we issued 2,601,382 shares of common stock as partial principal payments on our series A notes in satisfaction of $495,156 of obligations due under the notes. Additionally, we issued 1,240,060 shares of common stock as partial payments on our series B notes in satisfaction of $246,897 of obligations due under the notes. We expect to issue additional shares of our common stock in payment of amounts due under the notes during the remainder of 2008 and thereafter. In general, the shares issued are available for immediate resale by the holders in accordance with Rule 144 under the Securities Act of 1933, as amended. -- On August 8, 2008, we amended our Amended and Restated Certificate of Incorporation to (i) effect a one-for-four hundred reverse stock split of our common stock and (ii) authorize (after giving effect to the reverse stock split) 5,000,000,000 authorized shares of our common stock having a par value of $0.0001 per share. These actions were required for us to comply with the terms of our existing financing and other contractual arrangements. As of September 30, 2008, we had 4,596,531 shares of our common stock outstanding.
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.
Financial Tables Follow
REMOTE DYNAMICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Revenues Service $ 901 $ 817 $ 2,555 $ 2,397 Ratable product 433 345 1,125 1,089 Product 50 (2) 183 129 ----------- ----------- ----------- ----------- Total revenues 1,384 1,160 3,863 3,615 ----------- ----------- ----------- ----------- Cost of revenues Service 306 385 995 1,159 Ratable product 164 92 399 233 Product 5 29 60 152 ----------- ----------- ----------- ----------- Total cost of revenues 475 506 1,454 1,544 ----------- ----------- ----------- ----------- Gross profit 909 654 2,409 2,071 ----------- ----------- ----------- ----------- Expenses: General and administrative 423 351 1,194 1,463 Sales and marketing 165 165 515 557 Customer operations 86 71 226 217 Engineering 114 104 382 267 Depreciation and amortization 201 213 609 735 ----------- ----------- ----------- ----------- Total expenses 989 904 2,926 3,239 ----------- ----------- ----------- ----------- Operating loss (80) (250) (517) (1,168) Other income (expenses): Interest income 10 31 36 85 Interest expense (340) (1,388) (1,439) (4,246) Other income - 10 (1) 384 Loss on extinguishment of debt - - - (341) Loss on extinguishment of redeemable preferred stock - - - (363) ----------- ----------- ----------- ----------- Total other income (expenses) (330) (1,347) (1,404) (4,481) ----------- ----------- ----------- ----------- Loss before income taxes (410) (1,597) (1,921) (5,649) Income tax benefit - - - - ----------- ----------- ----------- ----------- Net loss (410) (1,597) (1,921) (5,649) =========== =========== =========== =========== Net loss per common share - basic and diluted $ (0.00) $ (532.33) $ (0.00) $ (1,883.00) =========== =========== =========== =========== Weighted average number of common shares outstanding: Basic and diluted 2,493,401 3 1,078,648 3 =========== =========== =========== =========== 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) September 30, December 31, 2008 2007 (unaudited) ------------- ------------- ASSETS Current assets: Cash and cash equivalents $ - $ 228 Accounts receivable, net of allowance for doubtful accounts of $92 and $54, respectively 727 526 Due from related parties - 71 Inventories, net of reserve for obsolescence of $3 and $7, respectively 194 158 Deferred product costs - current portion 498 352 Lease receivables and other current assets, net 238 466 ------------- ------------- Total current assets 1,657 1,801 Property and equipment, net of accumulated depreciation and amortization of $207 and $154, respectively 118 157 Deferred product costs - non-current portion 336 336 Goodwill 616 616 Customer Lists, net 1,748 2,162 Software, net 545 674 Tradenames, net 48 59 Deferred financing fees, net 162 191 Lease receivables and other assets, net 39 135 ------------- ------------- Total assets $ 5,269 $ 6,131 ============= ============= LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 1,391 $ 1,550 Accounts payable - related parties 26 55 Deferred product revenues - current portion 997 1,197 Series A convertible notes payable (net of discount of $0 and $392, respectively) 3,699 3,801 Series B convertible notes payable (net of discount of $822 and $1,543, respectively) 5,203 5,007 Note payable - related parties 250 250 Accrued expenses and other current liabilities 1,990 1,770 Accrued expenses and other current liabilities - related parties 101 60 ------------- ------------- Total current liabilities 13,657 13,690 Deferred product revenues - non-current portion 577 590 Capital leases, less current portion - 11 Series B convertible notes payable - long-term (net of discount of $712 and $0, respectively) 414 - Other non-current liabilities 39 99 ------------- ------------- Total liabilities 14,687 14,390 ------------- ------------- Commitments and contingencies Redeemable Preferred Stock - Series B (3% when declared, $10,000 stated value, 650 shares authorized, 522 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively (redeemable in liquidation at an aggregate of $5,220,000 at September 30, 2008) 134 134 Redeemable Preferred Stock - Series C (8% cumulative, $1,000 stated value, 10,000 shares authorized, 5,391 shares issued and outstanding at September 30, 2008; 5,202 shares issued and outstanding at December 31, 2007 (redeemable in liquidation at an aggregate of $5,391,000 at September 30, 2008) - - Stockholders' deficit: Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 4,596,578 shares issued and 4,596,531 outstanding at September 30, 2008, retroactively restated; 1,875,000 shares authorized, 3,484 shares issued and 3,437 outstanding at December 31, 2007, retroactively restated - 14 Treasury stock, 47 shares at September 30, 2008 and December 31, 2007, respectively, at cost - - Additional paid-in capital 1,673 897 Accumulated deficit (11,225) (9,304) ------------- ------------- Total stockholders' deficit (9,552) (8,393) ------------- ------------- Total liabilities and stockholders' deficit $ 5,269 $ 6,131 ============= ============= 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 December September 31, March 31, June 30, 30, 2007 2008 2008 2008 ---------- ---------- ---------- ---------- Net loss $ (581) $ (1,101) $ (410) $ (410) Add non-EBITDA items included in net results: Depreciation and amortization 214 203 205 201 Interest expense, net 491 810 263 330 Non-recurring reversal of legal accrual - - - - Loss on debt extinguishment - - - - Loss on redeemable preferred stock extinguishment - - - - ---------- ---------- ---------- ---------- Adjusted EBITDA $ 124 $ (88) $ 58 $ 121 ---------- ---------- ---------- ----------
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 Info: Gary Hallgren CEO 949-412-2836
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