The Company sold 2,100 tank monitoring units, increasing the number of billable tanks to 19,900. This resulted in TankLink product revenues of $830,000.
On January 10, 2011, Teluar announced the acquisition of assets underlying the SMARTank line of business of SMARTLogix, Inc., the largest value added reseller of TankLink tank monitoring solutions. The acquisition of SMARTank puts Telular in a direct relationship with a majority of TankLink’s current end users.
“We had a solid start to 2011, as we continued to build our recurring service revenues and expand our TankLink business with the acquisition of SMARTank,” commented Joe Beatty, president and chief executive officer of Telular Corporation. “During the quarter, we sold 19,070 Telguard units, in-line with our Telguard sales guidance of between 15,000 and 25,000 units on a quarterly basis through fiscal 2011. As part of our dividend policy, we are declaring a quarterly dividend that exemplifies our recurring revenue model and our ability to generate operating cash flow. The ongoing trend towards cellular-only households is driving strong growth in our business and we are well positioned as a leader in alarm and event monitoring solutions and services.”
“Today we are reiterating our increased fiscal 2011 net income guidance before non-cash items of $8.5 – $9.5 million,” added Jonathan Charak, chief financial officer of Telular Corporation. “We remain confident in our ability to drive growth and profitability in our Telguard and TankLink businesses. Service revenues now represent over 60% of our total revenues, providing us with strong visibility into our business and a steady cash flow stream. We believe our acquisition of the assets underlying the SMARTank business will allow us to earn higher recurring revenue and operating cash flow margins while we will continue to build on our relationship with SMARTLogix as a sales engine for TankLink.”
During the quarter, the Company paid shareholders a special one-time cash dividend of $1.00 per share of common stock and a quarterly dividend of $0.10 per share of common stock. The total amount of cash paid to shareholders was $16.4 million. Included in our results is a one-time charge of $1.1 million for special compensation paid to option holders commensurate with the $1.00 per share special dividend. This includes $660,000 paid in cash and $475,000 paid in stock.