Numerex Posts Massive Net Subscription Adds in Second Quarter

[Satellite TODAY Insider 08-01-12] On-demand and interactive machine-to-machine (M2M) technology and solutions provider Numerex added a company record 116,000 net subscriptions in its 2012 fiscal second quarter, which more than doubled its 42,000 net additions in the same period last year, according to the company’s latest financial results issued July 31.

   Numerex’s second quarter performance brings its total subscriber net gains in the first half of 2012 to 199,000, which also is more than double the 95,000 net subscriptions it recorded by this time in 2011. Additionally, the company’s subscription-based recurring revenue growth reached 16 percent in the first half of the year and 5.4 percent in sequential growth from the first quarter of this year, representing an annualized rate of 21.6 percent.
   Numerex’s consolidated gross margin for the second quarter increased slightly to 44.3 percent from 43.8 percent in the second quarter of 2011. Numerex Chairman and CEO Stratton Nicolaides said his company’s strong performance in the second quarter was the result of an across-the-board increase in demand for its interactive and on-demand services and solutions.
   “We have added several new customers this year who have introduced new innovative M2M solutions during the first half of the year, contributing significantly to our subscription base,” Nicolaides said in a statement. “In addition, our existing customer base continues to add subscriptions at a robust pace. Our on-demand subscription-based model is highly scalable and is expected to drive improved financial results over the balance of the year as we continue to deliver on-demand and interactive device management, network, and application services from our fully integrated and hosted M2M platform.”
   Numerex’s operating expenses for the second quarter decreased as a percent of total revenue during the quarter and first six months of the year. GAAP net earnings for the three months ending June 30 were $698,000, compared with $340,000 reported in the second quarter of last year — a 105 percent improvement. Numerex’s GAAP net earnings for the first six months of the year improved 79 percent from last year’s comparative results.
   At the end of the second quarter, Numerex stood with a cash supply of $9 million and long-term debt of $3.9 million. Nicolaides said the company’s main focus was to record an improvement in working capital in a year-over-year comparison.
   “The investment made in our infrastructure and technology that produced a unique interactive on-demand M2M service has enabled a wide variety of enterprise customers that continue to increase their use of our solutions and services,” said Nicolaides. “We expect that growth in our subscription base and related recurring revenues will continue at a solid pace throughout the year. As a result, we affirm our guidance range of 25 percent to 30 percent for growth in our subscription base, which is currently growing at 29 percent; and affirm our 18 percent to 23 percent growth guidance for subscription-based recurring revenues, which is currently growing at 16 percent year-over-year and 5.4 percent sequentially from the first quarter of this year — an annualized pace of 21 percent.”

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