Telular Corporation (NASDAQ:WRLS):
- Total Recurring Service Revenue Up 23% Year-Over-Year
- Company Increases Cash Balance to $24.6 million
Telular Corporation, a global leader in connecting businesses and machines over wireless networks, today announced financial results for the third quarter ended June 30, 2010. In the third quarter, Telular reported revenue of $11.0 million and net income of $960,000, or $.06 per diluted share.
For the third quarter of 2010, net income before non-cash items increased to $1.8 million compared to $571,000 in the prior year period. Net income before non-cash items is a non-GAAP measure which adds back depreciation, amortization and stock-based compensation expense to net income. For further information, see the reconciliation of this measure to net income in accordance with GAAP, on the last page of this press release.
In the third quarter of 2010, recurring service revenue grew sequentially from $6.8 million to $7.1 million, which also represents a 23% increase over the prior year period. This includes recurring service revenue of $6.7 million from Telguard and $370,000 from TankLink. There were over 18,000 new Telguard activations which were offset by a similar number of deactivations, of which 14,500 came from our largest security dealer customer as a result of its effort to purge previously cancelled accounts. Most of these deactivations related to end users who terminated their service with this dealer within the past three years, but whose Telguard service had not been terminated with Telular by the dealer. Telular expects this dealer to continue to have unusually high deactivation rates through the end of the fourth fiscal quarter as the planned account reconciliation is completed, after which overall churn is expected to normalize at an annualized rate of approximately 7%, a rate well below the security industry average. Telguard service revenue was able to grow sequentially even without increasing the subscriber base because units deactivated by this large dealer generate less revenue than new activations with other security dealers.