[NUMEREX LETTERHEAD]
PRESS RELEASE
FOR IMMEDIATE RELEASE
NUMEREX REPORTS FIRST QUARTER RESULTS
ATLANTA, MAY 6, 2003 - NUMEREX CORP. (NASDAQ: NMRX), today announced the
results of its first quarter of 2003 reporting a net loss of $1.1 million, or
$(.10) per fully diluted share, as compared to earnings of $199 thousand, or
$.02 per fully diluted share, for the first quarter of 2002. Net sales for the
first quarter were $4.7 million as compared to $7.1 million for the first
quarter of 2002. Please see attached financial statements for more details.
"The repositioning of our wireless data distribution channels and a decline in
our digital multimedia business significantly contributed to the year over year
decline in the Company's revenues, which in turn, negatively impacted the
bottom line year over year, said Stratton Nicolaides, chairman and CEO of
Numerex Corp. However, operating results for the quarter improved over last
year's fourth quarter as a result of changes made to our distribution strategy
for wireless mobile telemetry product lines and cost cutting measures
introduced in the fourth quarter of 2002. Continued focus on key segments of
our wireless data products and services business is expected to drive results
through the year. We are particularly pleased with customer and dealer reaction
to our recently introduced vehicle location product, MobileGuardian(TM).
Wireless data revenues improved significantly over the fourth quarter of 2002
and are expected to grow sequentially through the year. We are cautiously
optimistic in our expectations for consistent improvement in our operating
results and cash flows, in spite of a difficult economy and operating
environment, as the full impact of cost reductions and increased revenue
activity from our new product lines are realized. As of the end of the quarter,
our cash and available line of credit totaled $1.7 million compared to a cash
balance of $2.1 million at end of 2002. Our short-term objective is to
strengthen our balance sheet from continued improvements in working capital
efficiencies and through the sale of non-core assets."
CONFERENCE CALL AND WEBCAST INFORMATION
Numerex will conduct a conference call today, May 6th, at 11:00 A.M., Eastern
Daylight Time, accessible by calling (877) 822-9907 in the U.S. and Canada, or
(706) 679-7183 international. A live Webcast of the call will also be available
via Numerex's Web site at http://www.nmrx.com, under the Investor Relations
section. A replay of the conference call will be available via Numerex's Web
site beginning two hours after the call.
ABOUT NUMEREX
Numerex (Nasdaq:NMRX) is a technology company comprised of operating
subsidiaries that develop and market a wide range of wireless and wireline
communications products and services. The Company's primary focus is wireless
data communications utilizing proprietary network technologies. Numerex
primarily offers products and services in wireless data communications through
Cellemetry(R) and Data1Source(TM), and digital multimedia through
PowerPlay(TM). These services enable customers around the globe to monitor and
move information for a variety of applications from home and business security
to distance learning. In addition, the Company offers wireline alarm security
products and services, as well as telecommunications network operational
support systems. For more information on Numerex, please visit our Web site at:
www.nmrx.com.
Forward-looking statements with respect to Numerex's future financial or
business performance, conditions or strategies and other financial and business
matters, including expectations regarding growth trends and activities in the
wireless data business are also included in other portions of this press
release and may be included in other statements Numerex makes. Forward-looking
statements are typically identified by words or phrases such as "believe,"
"expect," "anticipate," "intend," "estimate," "assume," "strategy," "plan,"
"outlook," "outcome," "continue," "remain," "trend," and variations of such
words and similar expressions, or future or conditional verbs such as "will,"
"would," "should," "could," "may," or similar expressions. Numerex cautions
that these forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which change over time. These forward-looking
statements speak only as of the date of this press release, and Numerex assumes
no duty to update forward-looking statements. Actual results could differ
materially from
those anticipated in these forward-looking statements and future results could
differ materially from historical performance.
The following factors, among others, could cause actual results to differ
materially from forward-looking statements or historical performance:
variations in quarterly operating results, delays in the development,
introduction and marketing of new wireless products and services; customer
acceptance of products and services; economic conditions; changes in financial
and capital markets; the inability to attain revenue and earnings growth;
changes in interest rates; inflation; the introduction, withdrawal, success and
timing of business initiatives and strategies; competitive conditions; the
inability to realize revenue enhancements; and extent and timing of
technological changes. Numerex's SEC reports identify additional factors that
can affect forward-looking statements.
-Continued-
NUMEREX CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTH
PERIOD ENDED MARCH 31,
2003 2002
(UNAUDITED) (UNAUDITED)
----------- -----------
NET SALES:
Wireless Data Communications $ 2,886 $ 4,250
Digital Multimedia and Networking 1,546 2,636
Wireline Data Communications 255 208
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TOTAL NET SALES 4,687 7,094
Cost of sales 2,454 3,535
Depreciation and amortization 180 49
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GROSS PROFIT 2,053 3,510
Selling, general, and administrative expenses 2,387 2,456
Research and development expenses 298 602
Depreciation and amortization 489 518
------- -------
OPERATING PROFIT/(LOSS) (1,121) (66)
Interest income and (expense), net (20) (1)
Other income and (expense), net 43 --
Minority interest -- 326
------- -------
PROFIT (LOSS) BEFORE TAX (1,098) 259
Provision for income taxes 19 --
------- -------
NET PROFIT (LOSS) (1,117) 259
Preferred stock dividend -- 60
------- -------
NET PROFIT (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $(1,117) $ 199
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BASIC EARNINGS (LOSS) PER COMMON SHARE $ (0.10) $ 0.02
DILUTED EARNINGS (LOSS) PER COMMON SHARE $ (0.10) $ 0.02
Number of shares used in per share calculation
Basic 11,384 10,582
Diluted 11,384 11,512
NUMEREX CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31,
2003 DECEMBER 31,
(UNAUDITED) 2002
----------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 700 $ 2,137
Accounts receivable, net 3,524 4,459
Notes Receivable 590 823
Inventory 5,002 5,189
Prepaid expenses and other current assets 759 976
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TOTAL CURRENT ASSETS 10,575 13,584
PROPERTY AND EQUIPMENT, NET 2,186 2,475
GOODWILL, NET 15,059 10,983
OTHER INTANGIBLES, NET 8,449 8,050
SOFTWARE, NET 1,823 1,963
OTHER ASSETS 58 56
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TOTAL ASSETS $ 38,150 $ 37,111
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,836 $ 5,238
Other current liabilities 1,360 1,866
Note payable, current 3,500 --
Deferred revenues 955 819
Obligations under capital leases, current portion 710 710
-------- --------
TOTAL CURRENT LIABILITIES 10,361 8,633
LONG TERM LIABILITIES
Obligations under capital leases and other long term liabilities 760 863
Note Payable 1,500 --
-------- --------
TOTAL LONG TERM LIABILITIES 2,260 863
SHAREHOLDERS' EQUITY
Preferred stock - no par value; authorized 3,000,000; none issued -- --
Class A common stock - no par value; authorized 30,000,000; issued
13,171,399 on March 31, 2003 and 13,168,889 on December 31, 2002 36,781 36,769
Additional paid-in-capital 439 439
Treasury stock, at cost, 2,391,400 shares on March 31, 2003 and
1,766,400 on December 31, 2002 (10,197) (9,222)
Class B common stock - no par value; authorized 5,000,000; none issued -- --
Accumulated other comprehensive income (9) (9)
Retained earnings (1,485) (362)
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25,529 27,615
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 38,150 $ 37,111
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