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TheStreet Open House

Telular Corporation Reports First Quarter 2011 Results

Investor Conference Call

Telular’s quarterly conference call will be held today at 4:30 p.m. ET. To participate on the teleconference from the United States and Canada dial 877-941-6009 (International dial 480-629-9770). 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, January 27, 2011 beginning at 6:30 p.m. ET through Saturday, January 29, 2011 ending at 11:59 p.m. ET by dialing 800-406-7325 (enter pass code 4402176#) or internationally at 303-590-3030 (enter pass code 4402176#).

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 ”we are reiterating our increased fiscal 2011 net income guidance before non-cash items of $8.5 – $9.5 million,” and “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” 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, 2010 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
 
December 31, September 30,
2010 2010
(Unaudited)
ASSETS
Cash and cash equivalents $ 10,828 $ 27,678
Trade receivables, net 7,781 7,056
Inventories, net 4,314 4,821
Deferred taxes 352 336
Prepaid expenses and other current assets   488     290  
Total current assets 23,763 40,181
 
Property and equipment, net 2,187 2,169
Long term deferred taxes 34,419 34,698
Other assets   4,436     4,503  
Total assets $ 64,805   $ 81,551  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 4,637 $ 6,135
Long-term liabilities 485 529
Total stockholders' equity   59,683     74,887  
Total liabilities and stockholders' equity $ 64,805   $ 81,551  
 
Outstanding shares 14,995,390 14,871,889
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Three Months Ended December 31,
2010 2009
(Unaudited) (Unaudited)
Net cash provided by (used in):
Operating activities $ (297 ) $ 3,020
Investing activities (254 ) (194 )
Financing activities   (16,299 )   40  
Net increase (decrease) in cash and cash equivalents $ (16,850 ) $ 2,866  
 
TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
   
Three Months Ended December 31,
2010 2009
Revenues
Net product sales $ 4,770 $ 6,568
Service revenue   7,320   6,454
Total revenue 12,090 13,022
 
Cost of Sales
Net product cost of sales 3,665 5,205
Service cost of sales   2,836   2,601
Total cost of sales 6,501 7,806
 
Gross margin 5,589 5,216
 
Operating Expenses
Engineering and development expenses 1,194 1,254
Selling and marketing expenses 1,798 1,614
General and administrative expenses   2,086   1,450
Total operating expenses 5,078 4,318
 
Income from operations 511 898
Other income, net   121   98
Net income before income taxes 632 996
Provision for income taxes   242   21
Net income $ 390 $ 975
 
Income per common share:
 
Basic $ 0.03 $ 0.07
Diluted $ 0.02 $ 0.06
 
Weighted average number of common shares outstanding:
Basic 14,923,359 14,922,219
Diluted 15,677,326 15,334,272
 

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 December 31,
2010   2009
(Unaudited)
 
Net income $ 390 $ 975
 
Non-cash compensation 685 378
Depreciation and amortization 307 282
Non-cash deferred tax provision 219 -
   
Net income before non-cash items $ 1,601 $ 1,635
 

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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