BSM Technologies Inc. Reports Fourth Quarter and Fiscal Year-End 2016 Results

TORONTO, Dec. 14, 2016 /CNW/ - BSM Technologies Inc. ("BSM" or the "Company") (TSX: GPS), a leading provider of remote monitoring, fleet management and fleet diagnostics, today announced its financial and operating results for the three and 12 months ended September 30, 2016 (the "Quarter" and "Fiscal 2016", respectively). The operating and financial results of BSM for the Quarter and Fiscal 2016 are prepared on a consolidated basis and include the operating results of Webtech Wireless Inc. ("Webtech"), which was acquired by BSM on September 30, 2015 (the "Webtech Acquisition"). The comparable periods in the prior year do not include the operating and financial results of Webtech. The Webtech Acquisition has led to significant changes in our operating results. All amounts herein are presented in Canadian dollars unless otherwise stated.

Fiscal 2016 Highlights

• Recurring Revenue⁽ⁱ⁾ of $38.3 million, an increase of 86% compared to $20.6 million in fiscal 2015 ("F2015").
• Hardware revenue and service revenue of $20.7 million, an increase of 105% compared to $10.1 million in F2015.
• Total revenue of $59.0 million, an increase of 92% compared to $30.7 million in F2015.
• Adjusted EBITDA⁽ⁱ⁾ of $8.4 million, an increase of 223% compared to $2.6 million in F2015.
• Subsequent to year-end, BSM acquired the assets of Mobi Corp., enhancing its commercial fleet management solutions to include planning, scheduling, route optimization and fleet analytics for consideration of US$8.0 million and up to US$17.0 million in potential earn-out payments.

Fourth Quarter of Fiscal 2016 Highlights

• Recurring Revenue⁽ⁱ⁾ of $9.3 million, an increase of 75% compared to $5.3 million in the fourth quarter of fiscal 2015 ("Q4 F2015").
• Hardware revenue and service revenue of $5.6 million, an increase of 155% compared to $2.2 million in Q4 F2015.
• Total revenue of $15.0 million, an increase of 100% compared to $7.5 million in Q4 F2015.
• Adjusted EBITDA⁽ⁱ⁾ of $2.0 million, an increase of 300% compared to $0.5 million in Q4 F2015.
• Subscriber gross additions of 6,200 and Subscriber Churn of 2,900 ending the Quarter with 152,100 total subscribers.
• As of December 13, 2016 and since its commencement on December 23, 2015, BSM has purchased 7,523,500 common shares of the Company at an average price of $0.98 per common share under the Company's normal course issuer bid.

Management Commentary:

"Improving organic growth drove strong financial results in the fourth quarter of our fiscal 2016," said Aly Rahemtulla, BSM's President and CEO. "Notably, this quarter we saw improved gross subscriber additions with lower subscriber churn. While the decrease in subscriber churn this quarter is encouraging and suggests our increased effort in improving customer satisfaction and retention is beginning to yield results, we expect continued quarter to quarter variability as we work to manage controllable subscriber churn in 2017 and beyond."

Mr. Rahemtulla continued: "Our primary objective in fiscal 2016 was to build a strong foundation for our business. By prioritizing the integration of Webtech, we believe that we have implemented the necessary changes to position us for growth in 2017. As momentum continues to build across all of our verticals, our focus is shifting to investing in internal resources to support this growth. These additional investments, which are expected to total $1.7 million in fiscal 2017, will primarily center on three key areas of the business: sales and marketing, customer experience and platform consolidation. We believe that these investments will enhance our value proposition to customers as we concentrate on driving organic growth and reducing subscriber churn."

Financial Highlights for the Fourth Quarter and Fiscal 2016⁽ⁱⁱ⁾:

($ thousands except gross margin % and per share data)	Three months ended		12 months ended
	September 30		September 30
	2016	2015	2016	2015
Total revenue	$ 14,965	$ 7,486	$ 58,997	$ 30,691
Recurring revenue^(i)	9,346	5,274	38,264	20,573
Hardware revenue	4,363	1,890	16,268	8,484
Service revenue	1,256	322	4,465	1,634
Gross profit	8,587	3,871	32,997	15,267
Gross margin %	57%	52%	56%	50%
Net income (loss)	9,135	479	7,609	18
Basic income (loss) per share	0.112	0.011	0.091	0.000
Diluted income (loss) per share	0.112	0.011	0.090	0.000
EBITDA^(i)	3,485	201	8,282	3,004
Adjusted EBITDA^(i)	$ 2,033	$ 494	$ 8,353	$ 2,612
($ thousands)	Balance as at		Balance as at
	September 30, 2016		September 30, 2015
Cash and cash equivalents		$24,900		$23,980
Restricted cash and cash equivalents		-		8,800

 

Notes:
(i) Recurring Revenue, EBITDA and Adjusted EBITDA are non-GAAP financial measures and do not have any standardized meaning prescribed by the Company's GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. See "Non-GAAP Disclosures" below for additional information.
(ii) After the Webtech Acquisition, the Company re-evaluated the presentation of its financial information. Through this process, the Company revised the presentation of certain aspects of its financial information disclosed. Refer to the Company's management's discussion and analysis for the three and 12 months ended September 30, 2016 available under the Company's profile on SEDAR at www.sedar.com, for further details with respect to the change in financial statement presentation.

The Company's annual consolidated financial statements for the years ending September 30, 2016 and 2015, together with its corresponding management's discussion and analysis can be found under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.bsmwireless.com.

Conference call details:

DATE:	Thursday, December 15, 2016
TIME:	8:30 a.m. ET
DIAL-IN NUMBER:	647-427-7450 or 1-888-231-8191
CONFERENCE ID:	28875609
TAPED REPLAY:	416-849-0833 or 1-855-859-2056 Reference number 28875609 Available until Thursday, December 22, 2016 at midnight
LIVE WEBCAST:	http://bit.ly/2gStzVc Webcast will be archived for 90 days

About BSM Technologies Inc. (bsmwireless.com)

BSM Technologies Inc., through its subsidiaries, is a global top 20 commercial fleet telematics provider for automatic vehicle location (AVL) solutions that improve efficiency, accountability and reduce costs for fleet operators. BSM's end-to-end solutions automate record keeping and regulatory compliance, reduce fuel burn and idling, mitigate risk, and keep drivers safe. BSM provides solutions for commercial and government units who manage and operate diverse assets and large fleets that utilize its integrated fleet tracking, fleet maintenance, and intelligent business engine which provides real time, web‐based tracking of mobile and fixed assets.

For more information, please visit http://www.bsmwireless.com

Non-GAAP Disclosures

This news release includes the measures "Recurring Revenue", "EBITDA" and "Adjusted EBITDA", which are deemed "non-GAAP financial measures" under applicable laws. Non-GAAP financial measures do not have any standardized meaning under the Company's GAAP and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that that the disclosure of these items are meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined by GAAP.  BSM believes that investors use these non-GAAP financial measures as indicators to assess telematics companies.

"Recurring Revenue" includes monthly application service provider fees, monthly monitoring fees, and resale of cellular and satellite data. Recurring Revenue is derived from the service revenue category within the segmented information note of the Company's financial statements. BSM believes that Recurring revenue provides useful information to BSM's investors because it shows the long term nature of service revenue. "EBITDA" and "Adjusted EBITDA" are measures of BSM's operating profitability. BSM believes that EBITDA and Adjusted EBITDA provide useful information to its investors because they exclude transactions not related to the core cash operating business activities, allowing meaningful analysis of the performance of BSM's core cash operations. EBITDA is an indicator of the financial results generated by BSM's business activities excluding: the impact of any financing activities; amortization of property, equipment and intangible assets; and taxes with respect to various jurisdictions. Adjusted EBITDA is a further refinement of EBITDA to remove the effect of: acquisition, integration and restructuring related costs; share-based compensation expense; write-off of goodwill or other impairments to any financial and non-financial assets; fair value adjustments on contingent consideration; and costs related to certain legal actions. As such, Adjusted EBITDA provides more meaningful continuity with respect to the comparison of BSM's operating results over time. EBITDA and Adjusted EBITDA are derived from the consolidated statements of operations and comprehensive income and statement of cash flows. BSM believes that using these metrics enhances an overall understanding of the Company's results and BSM presents them for that purpose. Refer to the "Non-GAAP Financial Measures and KPIs" section in the Company's management's discussion and analysis for the three and 12 months ended September 30, 2016, available under the Company's profile on SEDAR at www.sedar.com for further information on the calculation and reconciliation of these non-GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements

This news release includes certain forward-looking statements or information under applicable Canadian, U.S. and other securities laws. Such forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could", or "might" occur or be achieved and any other similar expressions. Such forward-looking information includes but is not limited to, statements with respect to expected operating expenses for fiscal 2017, quarter to quarter variability in subscriber churn, internal investments leading to increased customer growth, the future financial or operating performance of the Company and the ability to capitalize on future opportunities. These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business and include, but are not limited to, expected investments in the sales and marketing of the Company, in the Company's customer experience and the Company's platform consolidation, these investments leading to increased customer growth, efficiently and successfully completing a network operating centre consolidation, efficiently and successfully completing a hardware and software consolidation, and reducing churn through internal investment. Management believes that these assumptions are reasonable; however, some risks include, but are not limited to, the failure to efficiently or successfully complete network centre consolidation, the failure to efficiently or successfully complete hardware and software consolidation, the failure to capitalize on future opportunities, the failure to make the internal investments and the failure to reduce churn through the internal investments. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Some of these risks, uncertainties and other factors are described under the heading "Risk Factors" in BSM's most recent annual information form available under the Company's profile on SEDAR at www.sedar.com. Forward-looking statements or information are based on estimates and opinions of management at the date the statements are made. Except as required by applicable law, BSM does not undertake any obligation to update forward-looking information. Readers should not place undue reliance on forward-looking information.

SOURCE BSM Technologies Inc.

BSM Technologies Inc., Aly Rahemtulla, President & CEO, BSM Technologies Inc., [phone], [email protected]; Conrad Seguin, Investor Relations, NATIONAL Equicom, [phone], [email protected]