GIVATAYIM, Israel, Nov. 12, 2001 — Nexus Telocation Systems Ltd. today announced it hat a 206 percent increase in its revenue compared with last year.
Nexus Telocation Systems Ltd., a provider of Location Based Services (LBS) and Automated Meter Reading (AMR), today announced consolidated results for the third quarter ending September 30, 2001. The consolidated reports combine Nexus’ two business activities as well as full consolidation of the recently acquired activity in Argentina.
Nexus has two core business lines. Its location based information systems and services (LBS) are focused primarily in the fields of automatic vehicle and personal location for security and workforce management applications.
Its automated meter reading (AMR) provides low-cost wireless wide-area data collection and information management solutions for the utility industry through the Company’s wholly owned subsidiary NexusData Inc.
During the third quarter, there were positive developments in both business units of the company. At the end of July 2001, NexusData announced its first major agreement with IMServe, for the deployment of a wide-area fixed network for automatic gas meter reading in Georgia, USA. The contract is expected to generate revenues in excess of US$50 Million during the next 3 years. At the beginning of October 2001, the Company announced its receipt of a US$2.5 million order from Tri-Angel for the sale of its first network in the US to supply location based service applications in Southern Florida. These orders position Nexus Telocation, at the beginning of the fourth quarter of 2001, with a new record orders backlog of close to US$60 million.
At the end of the first quarter of 2001, the Company acquired Tracsat S.A., a Buenos Aires based provider of security services utilizing the Company’s LBS technology. This Argentinean majority-owned subsidiary has been commercialized since the acquisition, completing the deployment of the Nexus Network in the greater Buenos Aires area through the second quarter of 2001 and signing its first commercial contracts for the supply of vehicle anti-theft services and cargo anti-theft services through the third quarter of 2001. During the third quarter, Tracsat signed its first service contract with a local insurance company in Argentina and has begun to install anti-theft units in its client’s vehicles, exceeding 1000 subscribers in the quarter and gaining marginal revenue from service fees for the first time. In addition, Tracsat has already successfully demonstrated its enforcement and anti-theft capabilities in several cases to the Argentinean insurance and Cargo anti-theft markets.
The Company is taking necessary measures to decrease the short-term negative effect of the consolidation of Tracsat’s initial operating stage into its results. Such efforts are planned to be fully effective during the first half of 2002.
Consolidated revenues for the three months ending September 30, 2001 were $3.6 M, compared to $2.1 M in the third quarter of 2000, and $3.3 M in Q2 of 2001, an increase of 71% and 9% respectively. Revenues for the nine-month period ending September 30, 2001 were $10.1 M compared to $3.3 M in the first three quarters of 2000, an increase of 206%.
The gross profit of the LBS business unit for the third quarter was $1.1 M, exceeding 30% gross margins. This is a significant increase of 33% compared to the previous quarter and reflects an increase of 66% compared to the same quarter in 2000. For the consolidated group there was a gross loss of $46 K during Q3, 2001. This loss derived mainly from combined gross losses of NexusData and Tracsat, who signed their first commercial contracts and began to generate first revenues during this quarter but are still in their investment stages.
The consolidated loss, before taxes, for the three months ending September 30, 2001 was $2.5 M, compared to a loss of $1.9 M in Q3 of 2000 and a loss in Q2/2001 of $2.4 M. The loss per share was $(0.23), compared to $(0.24) in Q3 of 2000 and $(0.22) in Q2 of 2001.
Consolidated losses for the nine-month period ending September 30, 2001 were $5.4 M compared to $6.1 M in the first nine months of 2000. The loss per share decreased from $(0.84) for the first nine months of 2000 to $(0.54) for the corresponding period of 2001.
Sadowsky, President and CEO of Nexus Telocation said: “We are gaining business confidence from the recent developments in Nexus, including our successful penetration into the US market for both core business lines, while having continued success with sustained growth of LBS business by our South American partners. We are also encouraged by the successful commercialization of our Argentinean operations, despite the current macro-economical situation in the country.
While realizing and closely monitoring the heavy burden placed on the company in the short term from both NexusData’s continued investment and from our Argentinean operation, we remain optimistic regarding the future financial and business results of such investments. We believe that our proven accomplishments in Argentina will soon enable us find the local partners necessary to support Tracsat’s further growth and success. Such partnership and additional planned improvements will ensure profitability of the LBS business line with in the next few quarters.”
“With regard to NexusData, we are very confident and pleased with our progress following the execution of our agreements with Nicor and IMServe and expect initial, successful deliveries and installation in this quarter with growing quantities to be shipped in the coming quarters. We can thus anticipate NexusData’s transition to profitability during 2002,” concluded Sadowsky.
Yaron Sheinman, Chairman of both Nexus Telocation and Nexus Data said: “Over the last year the company has successfully focused and materialized its technological assets into promising business opportunities. The solid internal infrastructure of both business lines is very well prepared to fulfill the expectations of our customers, especially in the North American market. The quarterly financial improvements in sales and growth margins, while keeping the cost base closely monitored, are positive signs towards profitability within a few quarters”.
Nexus Telocation Systems Ltd. develops manufactures and markets low energy and cost effective wireless communications and location based information systems through the application of digital spread spectrum technologies. Nexus Telocation security services business is performed through business partners in Israel, Venezuela, Argentina, Russia and Chile. NexusData, a fully owned subsidiary of Nexus Telocation Systems Ltd., provides low-cost, wide area data collection and information management for the utility industry. The company offers an end-to-end automatic meter reading solution, which includes wireless meter modules, wide area receivers and data management center.