Telular Corporation Reports Fourth Quarter 2010 Results And Declares Cash Dividends

Investor Conference Call

Telular’s quarterly conference call will be held today at 4:30 p.m. Eastern Time. To participate on the teleconference from the United States and Canada dial 877 941-0843 (International dial 480-629-9643). You may also monitor the call via webcast at www.telular.com (select Earnings Conference Calls in Investor Relations). A replay of the call will be available from Thursday, November 4, 2010 beginning at 6:30 p.m. ET through Sunday, November 7, 2010 ending at 11:59 p.m. ET by dialing 800-406-7325 (enter pass code 4373074#) or internationally at 303-590-3030 (enter pass code 4373074#).

About Telular

Telular Corporation provides event monitoring and wireless access solutions for business and residential customers, enabling security systems and other industrial applications to utilize wireless technology. With over 20 years of experience in the wireless industry, Telular Corporation has developed solutions to deliver remote access for voice and data without significant network investment or disruption. Headquartered in Chicago, Telular Corporation has additional offices in Atlanta and Miami. For more information, please visit www.telular.com.

Please be advised that some of the information in this release presents the Company’s intentions, beliefs, judgments and expectations of the future and are forward-looking statements. Statements regarding expectations, including performance assumptions, estimates relating to future cash flows, levels of demand for our products, dividend amounts and capital requirements, as well as other statements that are not historical facts, are forward-looking statements. For example, the statements that “[t]he increased visibility from our recurring services businesses and new product introductions give us confidence that we can deliver net income before non-cash items of $8.0 to $9.0 million in fiscal year 2011” and that “we continue to expect Telguard quarterly unit sales of between 15,000 and 25,000 units on a quarterly basis through fiscal 2011” and “The Company is in the process of completing an analysis to determine the exact amount of the valuation allowance reversal, but it expects the total to range between $10.0 million and $30.0 million” .are forward-looking statements. These statements reflect management’s judgments based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer growth and retention, pricing, operating costs and the economic environment. It is important to note that the Company’s actual results could differ materially from these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s report on Form 10-K for the fiscal year ended September 30, 2009 Copies of these filings may be obtained by contacting the Company or the SEC.

TELULAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AND STATEMENTS OF CASH FLOWS
(Dollars in thousands, except share data)
BALANCE SHEETS
		September 30,				September 30,
		2010				2009
		(Unaudited)
ASSETS
Cash and cash equivalents		$	27,678			$	17,904
Trade receivables, net			7,056				7,589
Inventories, net			4,821				7,803
Prepaid expenses and other current assets			290				273
Total current assets			39,845				33,569
Property and equipment, net			2,169				2,193
Other assets			4,503				4,563
Total assets		$	46,517			$	40,325
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities		$	6,134			$	4,903
Total stockholders' equity			40,383				35,422
Total liabilities and stockholders' equity		$	46,517			$	40,325
Outstanding shares			14,871,889				14,911,688
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		Twelve Months Ended September 30,
		2010				2009
		(Unaudited)				(Unaudited)
Net cash provided by (used in) continuing operations:
Net cash provided by operating activities		$	10,883			$	5,453
Net cash used in investing activities			(857	)			(3,341	)
Net cash used in financing activities			(252	)			(8,989	)
			9,774				(6,877	)
Net cash provided by discontinued operations			-				3,613
Net increase (decrease) in cash and cash equivalents		$	9,774			$	(3,264	)

TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
				Three Months Ended September 30,							Twelve Months Ended September 30,
				2010			2009				2010			2009
Revenues
	Net product sales			$	4,823		$	6,153			$	19,895		$	24,754
	Service revenue				7,151			6,092				27,459			22,440
		Total revenue			11,974			12,245				47,354			47,194
Cost of Sales
	Net product cost of sales				3,953			4,422				16,413			18,270
	Service cost of sales				2,863			2,605				10,964			9,953
		Total cost of sales			6,816			7,027				27,377			28,223
Gross margin					5,158			5,218				19,977			18,971
Operating Expenses
	Engineering and development expenses				1,010			1,128				4,562			4,783
	Selling and marketing expenses				1,367			1,535				5,934			6,549
	General and administrative expenses				1,479			1,159				6,119			5,610
		Total operating expenses			3,856			3,822				16,615			16,942
Income from operations					1,302			1,396				3,362			2,029
	Other income, net				118			90				394			321
Income from continuing operations before income taxes					1,420			1,486				3,756			2,350
	Provision for income taxes				55			52				139			65
Income from continuing operations					1,365			1,434				3,617			2,285
	Loss from discontinued operations				-			(22	)			-			(419	)
Net income				$	1,365		$	1,412			$	3,617		$	1,866
Income (loss) per common share:
	Basic
		Continuing operations		$	0.09		$	0.09			$	0.24		$	0.13
		Discontinued operations			-			-			$	-		$	(0.02	)
		Net Income		$	0.09		$	0.09			$	0.24		$	0.11
	Diluted
		Continuing operations		$	0.09		$	0.09			$	0.24		$	0.13
		Discontinued operations			-			-			$	-		$	(0.02	)
		Net Income		$	0.09		$	0.09			$	0.24		$	0.11
Weighted average number of common shares outstanding:
	Basic				14,939,803			14,900,353				14,937,170			17,125,601
	Diluted				15,325,862			15,231,145				15,351,480			17,205,307

Reconciliation of Non-GAAP Measures

We use net income before non-cash items as an additional measure of our operating performance. This measure is not recognized under generally accepted accounting principles. The reconciliation below demonstrates how we calculate this measure from our financial statements.

			Three Months Ended September 30,						Twelve Months Ended September 30,
			2010			2009			2010			2009
			(Unaudited)						(Unaudited)
Net income			$	1,365		$	1,412		$	3,617		$	1,866
Non-cash compensation				336			208			1,611			1,384
Depreciation and amortization				296			280			1,148			1,071
Net income before non-cash items			$	1,997		$	1,900		$	6,376		$	4,321

Net income before non-cash items should be considered in addition to, but not as a substitute for, other measures of performance reported in accordance with accounting principles generally accepted in the United States. While we believe that net income before non-cash items, as defined above, is useful within the context described above, it is in fact incomplete and not a measure that should be used to evaluate the full performance of Telular Corporation. Such evaluation needs to consider all of the complexities associated with our business, including, but not limited to, how past actions are affecting current results and how they may affect future results, how we have chosen to finance the business and how regulations and other aforementioned items affect the final amounts that are or will be available to shareholders as a return on their investment. Net income determined in accordance with U.S. GAAP is the most complete measure available today to evaluate all elements of our performance.

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