TORONTO, May 28 /CNW/ - AirIQ Inc. ("AirIQ" or "the Company") (TSV: IQ), a supplier of Wireless Location-Based Services (LBS) and telematics technology, today announced its financial results for the first quarter ended March 31, 2010.
On November 30, 2009, the Company sold its U.S. subsidiary, AirIQ Marine, Inc. ("AirIQ Marine") to Boatracs Inc.
This is the first quarter showing the financial results of the Company for the continuing operations. All prior periods results have been amended to reflect the sale of AirIQ Marine.
Revenue for the quarter was $907 thousand compared to $1,581 thousand for the first quarter of 2009, a decrease of $674 thousand. The decrease is primarily a result of the continuing effect of the dramatic downturn in the economy, unfavourable currency movements and increased competition in the marketplace. The decrease in revenue in the first quarter 2010 is $155 thousand from the fourth quarter of 2009. The Company has re-launched its MobileIQ(R) consumer product and introduced a new rental program to enter an attractive niche in the marketplace to seek improved sales and revenues.
Gross profit for the first quarter 2010 was $508 thousand compared to $765 thousand in the comparable first quarter of 2009. The gross margin percentage was 56% in the first quarter 2010 which was an improvement from 48% in the comparable quarter of 2009.
Expenses for the three months ended March 31, 2010 were $725 thousand compared to $1,034 in the same quarter of 2009, a decrease of $309 thousand. The greatest decrease was in General and Administrative expenses which decreased $289 thousand offset by a $76 thousand swing in foreign exchange from a gain to a loss.
Net loss from continuing operations for the first quarter of 2010 was $340 thousand as compared to a loss of $496 thousand in the first quarter of 2009.
"The Company continues to focus on achieving its key strategic goals and becoming cash flow positive," said Don Gibbs, President and Chief Executive Officer of AirIQ. "The Company used $255 thousand in cash for operations but included in this number was approximately $185 thousand in one time non-recurring restructuring payments, legal fees and prior auditor transition fees. As a result, ongoing operational activities used approximately $70 thousand during the first quarter ended March 31, 2010. With the re-launch of MobileIQ, further cost containment activities and the number of units in trial with significant customers interested in the Company's rental program, the Company is on course to becoming operationally cash flow positive," continued Mr. Gibbs.
The Company continues to grow revenues and manage its costs through the following actions:
- Building a sales pipeline of qualified customer leads currently
representing a total of over 7,000 potential unit activations.
- Reduced the Board from seven members to four members and reduced
- Negotiated a transition services agreement in conjunction with the
sale of AirIQ Marine which was terminated by both parties on
March 31, 2010. As a result, the Company was able to further reduce
staff and hours in its Client Care operation as well as
- Reviewing with plans of reducing contracted labour costs in the
The Company's unaudited interim consolidated financial statements as at and for the three months ended March 31, 2010, including notes thereto, and the accompanying Management's Discussion and Analysis were filed with the Canadian securities regulatory authorities today, May 28, 2010, and will be available on the Company's website (www.airiq.com) and on the System for Electronic Document Analysis and Retrieval website (www.sedar.com).
Settlement of Contingent Liability
Class Action Complaint
In November 2008, a class action complaint was filed in the Los Angeles County Superior Court against several defendants including the Company and its U.S. subsidiary, AirIQ USA, by AFA Diversified Corp. on behalf of itself and others located in California. The complaint alleged misrepresentations in connection with analog vehicle tracking devices purchased from the defendants. The analog devices ceased functioning in early 2008 due to termination of analog services by wireless network service providers. In April 2010, the Company entered into a settlement agreement with the plaintiff and other defendants requiring the Company to make a cash payment of $150,000 upon final approval of the settlement by the Court. The settlement agreement received preliminary approval of the Court on April 30, 2010, and final Court approval is expected in September 2010.
AirIQ currently trades on the TSX Venture Exchange under the symbol IQ. AirIQ's office is located in Pickering, Ontario, Canada. The Company offers a suite of location based services (LBS) that generate recurring revenues from each device deployed. AirIQ delivers services to two primary markets: Commercial Fleets and dealers that service Consumer segments. AirIQ provides vehicle owners with the ability to monitor, manage and protect their mobile assets. Services include: instant vehicle locating, boundary notification, automated inventory reports, maintenance reminders, security alerts and vehicle disabling and unauthorized movement alerts. For additional information on AirIQ or its products and services, please visit the Company's website at www.airiq.com.
This news release contains forward-looking information based on management's best estimates and the current operating environment. These forward-looking statements are related to, but not limited to, AirIQ's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "hope", "goal", "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. These statements are based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including AirIQ's perception of historical trends, current conditions and expected future developments as well as other factors management believes are appropriate in the circumstances. Such forward-looking statements are as of the date which such statement is made and are subject to a number of known and unknown risks, uncertainties and other factors, which could cause actual results or events to differ materially from future results expressed, anticipated or implied by such forward-looking statements. Such factors include, but are not limited to, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Therefore, actual outcomes may differ materially from those expressed in such forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Other than as may be required by law, AirIQ disclaims any intention or obligation to update or revise any such forward-looking statements, whether as a result of such information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE AIRIQ INC.
For further information: For further information: AirIQ Inc., Donald Gibbs, President and Chief Executive Officer, (905) 831-6444, Ext. 4255, email@example.com