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Telular Corporation Reports First Quarter 2013 Results

"We had a strong start to 2013, as our business units combined to deliver strong growth in Adjusted EBITDA during the first quarter," commented Joe Beatty, president and chief executive officer of Telular Corporation. "Looking ahead, we have a very well defined growth strategy centered on releasing key service enhancements during the year and leveraging these new services to improve our market position in each line of business."

"Based on our strong results this quarter and the high visibility in our recurring revenue model, we are reiterating our guidance for fiscal year 2013 Adjusted EBITDA of $23.5 - $25.5 million," stated Jonathan Charak, chief financial officer. "We remain dedicated to generating operating cash flow and delivering a regular, quarterly dividend to our shareholders."

Telular declared a quarterly dividend of $0.12 per share on its common stock, payable February 26, 2013, to shareholders of record as of the close of business on February 19, 2013. During the first quarter, the Company paid shareholders a dividend totaling $2.0 million.

CEO Transition Plan

Telular also announced today that president and chief executive officer Joe Beatty will be stepping down due to personal, family-related reasons.  Mr. Beatty will continue to serve as president and chief executive officer and on the board of directors until Telular's second quarter earnings announcement, currently scheduled for May 2, 2013. The Company's board of directors will initiate a search process and retain an executive search firm to identify the next president and chief executive officer. The search process will include a full review of external and internal candidates. During the interim period, Mr. Beatty will work closely with the Company's entire management team to aid in the smooth transition to new leadership.

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 866-225-8754 (International dial 480-629-9818). A replay of the call will be available from January 31, 2013 beginning at 6:30 p.m. ET (5:30 p.m. CT) through February 4, 2013 ending at 11:59 p.m. ET (10:59 p.m. CT) by dialing 800-406-7325 in the United States and entering pass code 4591507 # or internationally at 303-590-3030: and entering pass code 4591507#. The replay will also be available via webcast from the Company's corporate website at: www.telular.com under "Investor" and the link "Conference Calls."

About Telular Corporation

Telular Corporation (Nasdaq:WRLS) provides remote monitoring and asset tracking solutions for business and residential customers, enabling security systems and industrial applications to exchange actionable information wirelessly, typically through cellular and satellite technology. With over 25 years of experience in the wireless industry, Telular Corporation has developed solutions to deliver remote access for voice and data without significant network investment. Headquartered in Chicago, Telular Corporation has additional offices in Atlanta, Washington, D.C., 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 statement, "…we are reiterating our guidance for fiscal year 2013 Adjusted EBITDA of $23.5 - $25.5 million," is a forward-looking statement. 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. The Company cautions you not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release, and the Company undertakes no obligation to update this information. 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, 2012. Copies of this filing 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, 2012 September 30, 2012
  (Unaudited)  
ASSETS    
Cash and cash equivalents  $ 9,160  $ 12,676
Trade receivables, net  12,289 12,224
Inventories, net 9,315 7,478
Deferred taxes 618 687
Prepaid expenses and other current assets 1,606  833
Total current assets 32,988 33,898
     
Property and equipment, net 3,754 3,346
Long term deferred taxes 32,303 32,706
Other assets  43,668 43,235
Total assets  $ 112,713  $ 113,185
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities  $ 16,082  $ 17,268
Long-term liabilities 23,650 24,786
Total stockholders' equity  72,981 71,131
Total liabilities and stockholders' equity  $ 112,713  $ 113,185
     
Outstanding shares  17,174,200 16,776,575
     
     
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  Three Months Ended December 31,
  2012 2011
  (Unaudited) (Unaudited)
Net cash provided by (used in):    
Operating activities  $ (1,040)  $ 2,603
Investing activities (803) (252)
Financing activities  (1,673)  (1,660)
Net increase (decrease) in cash and cash equivalents  $ (3,516)  $ 691
 
 
TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
     
   Three Months Ended December 31,
  2012 2011
Revenues    
M2M service revenue  $ 13,979  $ 8,286
M2M hardware sales  10,789  5,031
Subtotal M2M  24,768  13,317
Other product sales  14 388
Total revenue  24,782  13,705
     
Cost of Sales    
M2M service cost of sales  4,024 2,310
M2M hardware cost of sales  8,323 3,233
Subtotal M2M  12,347 5,543
Other product cost of sales  12 648
Total cost of sales  12,359  6,191
     
Gross margin  12,423 7,514
     
Operating Expenses    
Engineering and development expenses  2,095 1,287
Selling and marketing expenses  3,165 1,785
General and administrative expenses  3,531 1,874
Total operating expenses  8,791  4,946
     
Income from operations  3,632 2,568
Other expense, net  (215)  --
Income before income taxes  3,417  2,568
Provision for income taxes  1,220  944
Net income   $ 2,197  $ 1,624
     
Income per common share:    
Basic  $ 0.13  $ 0.11
Diluted  $ 0.12  $ 0.10
     
Weighted average number of common shares outstanding:    
Basic  16,969,086  15,162,314
Diluted  17,845,403  16,207,864

Reconciliation of Non-GAAP Measures

We use adjusted EBITDA 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,
  2012 2011
  (Unaudited)
     
Net income   $ 2,197  $ 1,624
Non-cash compensation  323  373
Depreciation and amortization  1,957  496
Net interest expense (income)  211  (2)
Income tax provision  1,220  944
Adjusted EBITDA  $ 5,908  $ 3,435

Adjusted EBITDA 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 Adjusted EBITDA, 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.

CONTACT: Investor Contact:
         The Blueshirt Group
         Brinlea Johnson or Allise Furlani
         brinlea@blueshirtgroup.com or allise@blueshirtgroup.com
         (212) 331-8424 or 212-331-8433
         
         Media Contact:
         Pam Benke
         Telular Corporation
         pbenke@telular.com
         (678) 909-4616

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