Woodbridge, Ontario CANADA, June 02, 2008 - BSM Technologies Inc. (GPS - TSX Venture), (http://www.bsmtechnologies.com) a leading provider of high security vehicle tracking and surveillance solutions today announced that revenues for the quarter ended March 31, 2008 were $1,643,674. The decrease of $478,199 from March 31, 2007 quarterly revenues of $2,121,873 can be attributed to a hardware order backlog. As at March 31, 2008 backlog in hardware orders, caused by supply delays from the hardware supplier, was $1,375,500.
Results of operations
Revenue
Revenue for the quarter ended March 31, 2008 decreased by $478,199 to $1,643,674, compared to $2,121,873 for the quarter ended March 31, 2007.
Gross Profit
The gross profit for the quarter ended March 31, 2008 decreased by $ 148,609 to $813,144 or 49.47% of the revenue from $961,753 or 45.33% of the revenue for the three months ended March 31, 2007. The decrease in quarterly total gross profit was due primarily to lower hardware sales caused by the hardware product backlog. As a percentage of revenues, gross profit for the quarter ended March 31, 2008 was 49.47% compared to 45.33% for the quarter ended March 31, 2007. The increase in gross profit margins was due primarily to (i) reduction in cost of the hardware devices, (ii) increase in services subscriber base, and (iii) additional billable service features such as data bus integration offering
Operating expenses
Excluding certain one-time expenses amounting to approximately $174,430 related to legal fees incurred to maintain the injunction against the supplier of Sectrack which was obtained in June 2007, overall operating expenses before interest expenses decreased by $177,183 to $1,287,365, for the three months ended March 31, 2008, from $ 1,464,548 for the three months ended March 31, 2007 despite additions that were made to the sales, research and development, and operations functions caused by integration of Netistix staff.
Income/loss from operations
Net loss for the three months ended March 31, 2008 was $880,860 or $0.01 per share on a diluted basis compared with a net loss of $629,194 or $0.01 per share on a diluted basis for the for the three months ended March 31, 2007.The net loss per share for the three months ended March 31, 2008 was also impacted by an increase in weighted average number of common shares from 68,325,097 to 83,524,922.
Liquidity and capital resources
The Company generated $94,223 from operating activities during the three months ended March 31, 2008 including $834,777 in operating losses offset by a decrease of $929,000 in non cash operating working capital. This compares with cash used in the three months ended March 31, 2007 of $ 166,010 - $537,767 to finance operating losses offset by a decrease of $371,757 in non cash operating working capital. Lower accounts receivable, higher accounts payable and inventory, eliminating the acquired receivable, inventory and payables on acquisition of Netistix accounted for the changes in the non-cash working capital.
At March 31, 2008 the working capital deficiency was $ 2,107, 696 (March 31, 2007- Working capital $ 1,759,171). Working Capital has been calculated by netting current assets and current liabilities, and excluding deferred revenue which is a non cash item. The decrease in working capital is caused by (i) classification of Convertible debenture as a current liability and (ii) loss incurred in the three months. The Company did not meet the June 2007 EBITDA target under the Debentures and is in default of that covenant. As at March 31, 2008 the Debentures were in default. The Debenture Holders made demand for payment and agreed to a Forbearance of their right to exercise their remedies under the Debentures until April 1, 2008. The Company paid a 3% interest penalty to the Debenture holders, representing a payment of approximately $40,000, as consideration for the Forbearance. The Debentures are now repayable. The Debenture Holders have available to them all the remedies available at law and under the Debentures to enforce their right to repayment. The Debenture Holders have not taken any steps to date to enforce their security.
The Company's consolidated financial statements, accompanying notes and Management's Discussion and Analysis will be available on the System for Electronic Document Analysis and Retrieval ("SEDAR") website (www.sedar.com) on or before May 31, 2008.
This press release is available on the Company's official investor relations site for investor questions and commentary at http://www.agoracom.com/IR/BSM. Alternatively, investors are able to e-mail their questions to GPS@agoracom.com where they can also request addition to the BSM investor e-mail list.
About BSM Technologies
BSM Technologies designs, manufactures and markets a comprehensive line of AVSL ("Automatic Vehicle Security and Tracking") solutions for Commercial and Government Fleet Management, including Law Enforcement, through its subsidiary BSM Wireless. The BSM line of products range from Fleet Management and Consumer Vehicle Protection offerings to the full featured ''Stinger'' product featured in news media worldwide as the key technology behind the Bait and Covert application used by hundreds of Law Enforcement agencies to deter vehicular, trailer and heavy equipment theft.
Superior functionality, seamless switching between two separate footprints, enhanced reliability, advanced security features, and excellent value characterize BSM products. By incorporating advanced wireless locating and mapping technology, and IP-based communications protocols, the BSM line of products provides sophisticated real-time monitoring and control of commercial and personal vehicle assets to meet the demanding needs and stringent requirements of today's mobile environments. BSM's unique end to end solutions feature sophisticated wireless hardware, firmware and software all developed by and proprietary to BSM. The BSM product line can be easily adapted and customized to match any customer user requirement while BSM's in-house support infrastructure assures that all clients receive the premium AVSL solution in the industry to meet their needs.
About SecTrack
SecTrack sells Inmarsat D+ transceivers and airtime subscription to value added resellers around the world. These VARs are typically local companies who have built a proper monitoring and tracking service for end-users in a multitude of maritime and land based sectors including nuclear transport monitoring, mining, security tracking of trucks, trailers and other vehicles and tracking of airplanes and rescue helicopters. The company's customer base is spread over Europe, Asia, Africa and Central and South America
About Netistix Technologies
Incorporated in 2002, Netistix Technologies Corporation is headquartered in Ottawa, Canada and has developed a comprehensive and customizable wireless fleet management solution known as "FleetPulse". The Netistix "FleetPulse", Wireless Fleet Management System, delivers actionable information that reduces fleet operation and environmental costs, improves productivity and increases safety.
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Company Contact
Mr. Nick Cirella
President & CEO
BSM Technologies Inc.
1-(905) 265-1200
Retail Investor Inquiries
AGORACOM Investor Relations
http://www.agoracom.com/IR/BSM
Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Factors that might cause a difference include, but are not limited to, market acceptance of principal products, the impact of competitive products and technologies, the possibility of products infringing patents and other intellectual property of fourth parties, and costs of product development.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release may include certain "forward-looking statements" that involve risks and uncertainties. Actual results may differ materially from results indicated in any forward-looking statements. The company cautions that, among other things, in view of the rapid changes in communications markets and technologies, and other risks including the cost and market acceptance of the company's new products, the level of individual customer procurements and competitive product offerings and pricing, and general economic circumstances, the company's business prospects may be materially different from forward-looking statements made by the company.
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Please view the Wednesday May 9th Webcast Presentation by Mr. Nick Cirella, President and CEO of BSM Technologies
