Mobile data solutions provider DDS Wireless International Inc. (DD.TO) on Tuesday reported a profit for the fourth quarter compared to loss in the year-ago period, aided by a 46% surge in revenue. Looking ahead, the company expects a softer first quarter, based on historical trends. The company also provided revenue outlook for fiscal year 2009.
Fourth Quarter Results
For the fourth quarter, the Richmond, British Columbia-based company reported net income of C$0.54 million, or C$0.04 per share, compared to net loss of C$1.00 million, or C$0.08 per share, in the prior-year quarter.
Revenues for the quarter surged 46.3% to C$10.65 million from C$7.28 million in the year-ago period.
The increase in revenue for the latest quarter is primarily due to a C$1.5 million increase in revenues attributable to the inclusion of a full quarter of the company's transit business unit StrataGen's financial results and an increase of C$1.9 million attributable to the company's Taxi business in Europe.
Gross margin for the latest quarter rose to C$5.10 million from C$3.17 million for the year-ago period and is directly related to increase in revenues for the three months ended December 31, 2008, as the taxi and transit divisions closed and delivered significant business in the latest quarter.
Total expenses for the quarter increased to C$4.57 million from C$3.97 million in the year-ago period due to the addition of the operations of MobiSoft and StrataGen, offset by a decrease in operating expenses from the company's other operations.
DDS Wireless recorded a foreign exchange gain of C$0.87 million compared to a gain of C$0.08 million in the previous-year quarter.
The company has line of credit facilities totaling C$4.5 million. At December 31, 2008, the company had C$1.5 million drawn on its banking facilities. This compares to C$1.3 million drawn on its line of credit and a cash balance of C$1.1 million at December 31, 2007
Fiscal Year 2008 Results
For fiscal year 2008, DDS Wireless' net loss narrowed to C$1.48 million, or C$0.11 per share, from C$3.36 million, or C$0.28 per share, in the prior year.
The results for the year include amortization and stock compensation expenses of C$3.7 million compared to expenses of C$1.1 million in the prior year.
Revenues for the year surged 63% to C$33.50 million from C$20.59 million in the previous year, and came in line with the company's forecast in a range of C$33 million to C$34 million.
DDS Wireless attributed C$9.2 million of the increase in revenues to the inclusion of a full year of revenues for Finland-based MobiSoft Oy as well as StrataGen in its consolidated financial results. The two companies were acquired on October 8, 2007, and December 7, 2007 respectively.
Vari Ghai, CEO of DDS Wireless said, "We returned the company to profitability in the last quarter of 2008 and delivered revenue growth of 63% for the year, driven in large part by the strategic reorganization of the company into four market focused business units earlier in the year and the integration of Washington-based StrataGen Systems Inc. and Finland-based Mobisoft Oy acquired late in 2007." Outlook
Looking ahead, DDS Wireless forecasts a softer first quarter based on historical trends.
For fiscal year 2009, the company projects earnings before interest, stock compensation, taxes, foreign exchange, and amortization to be positive.
Revenue for the year is forecast in a range of C$35 million-C$36 million, based on the company's current outstanding customer orders and anticipated future sales opportunities. This compares to revenues of C$33.50 million for fiscal year 2008.
Stock Quotes
DD.TO closed Monday's regular trading session on the Toronto Stock Exchange at C$0.65, up C$0.15 on a volume of 2,000 shares. The stock has been trading in a range of C$0.40-C$2.90 in the past 52 weeks.
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