NEXTMap USA 86% collected
Q3 sets record for data delivered to customers
Calgary, Alberta: Intermap Technologies Corp. (“Intermap” or the “Company”) today reported financial results for the third quarter ended September 30, 2008. A conference call will be held today, October 27, at 4:30 p.m. EDT to discuss the results.
Financial Review
All amounts in this news release are in United States dollars unless otherwise noted.
For the third quarter of 2008, Intermap™ reported total revenue of $12.8 million, compared to $14.3 million in the third quarter of 2007. Intermap's contract services revenue component contributed $10.3 million and multi-client data license (MCDL) revenue from NEXTMap® datasets contributed $2.5 million of the total revenue.
“We set a new record for data deliveries in a single quarter, comprised of MCDL and contract services. The deliveries were from either our MCDL library or the result of data collected in prior periods. This created invoicing in the quarter totaling $16.8 million. The difference between this billing amount and the revenue recorded during the quarter relates to timing differences resulting from the use of percentage-of-completion accounting on contract services,” stated Brian Bullock, president & CEO of Intermap Technologies. “Total revenue from NEXTMap data sales on a year-to-date basis is nearly double that of 2007. Since its inception, total revenue from NEXTMap licensing has reached more than $42 million, and we have yet to make all of the United States and Western Europe commercially available.”
In July, Intermap announced a follow-on contract to an existing international mapping project worth $4.3 million bringing the combined total of these two contracts to $12.4 million. Additionally, in August and September the Company announced $6.2M and $2.1 million contracts for international projects using data that had been previously collected by the Company.
Aircraft deployment in the third quarter of 2008 was focused primarily on NEXTMap data collection in the United States while weather conditions remained favorable. This led to the deferral of contract services collection in Asia until later in the fourth quarter.
Sales, general, and administrative (SG&A) expense for the third quarter was $7.8 million (year-to-date $22.9 million), compared to $6.0 million (year-to-date $17.3 million) for the same period in 2007. The majority of this increase is attributable to the costs of personnel in the areas of business development (including automotive), recreational map-enabled GPS applications, insurance risk assessment, sales, and marketing in support of the Company's MCDL data licensing.
Cost of Services expense totaled $0.8 million for the third quarter of 2008, compared to $3.1 million for the same period in 2007. The $2.3 million decrease in expense was primarily the result of reduced aircraft hours flown on contract services work during the third quarter of 2008, compared to the same period in 2007.
Amortization expense of the MCDL database for the third quarter decreased to $1.3 million (year-to-date increase to $5.2 million) from $1.5 million (year-to-date $3.4 million) during the same period in 2007. The increase on a year-to-date basis was primarily due to increased revenue associated with NEXTMap and an increase in the size of the underlying NEXTMap datasets.
Intermap reported net income of $0.2 million or $0.00 per share in the third quarter, compared to net income of $2.6 million or $0.06 per share for the same period in 2007. Positive earnings in the third quarters of 2007 and 2008 resulted primarily from increased revenues associated with contract services programs. These contract services programs have the capability of producing substantial swings in revenue on a quarter-to-quarter basis. Management generally does not expect profitable quarters during the current investment phase of the NEXTMap build process. However, revenue recognized from large contract services programs may occasionally result in a profitable quarter as is evident in the current reporting period.
For the nine months ended September 30, 2008, Intermap reported consolidated revenue of $27.4 million as compared to $27.6 million during the same period in 2007. Contract services revenue on a year-to-date basis was $18.7 million in 2008, compared to $23.0 million for the same period in 2007. MCDL revenue totaled $8.7 million in 2008, an increase of 87% over the same period in 2007. The increase in MCDL revenue during 2008 is primarily due to the increased availability of NEXTMap data in the United States, Europe, and Indonesia.
Intermap added $0.5 million to its cash position during the quarter. Cash and cash equivalents at September 30, 2008 were $41.6 million, compared to $56.8 million at December 31, 2007. The Company's working capital was $37.5 million at September 30, 2008, compared to $65.0 million at December 31, 2007.
“We are scheduled to collect at least 3.5 million km² of NEXTMap data in 2008,” added Mr. Bullock. “That leaves us approximately 600,000 km² to collect next year, which will take about four months using one aircraft. This significant reduction in flying activity will reduce our cash outflow by approximately $10 million in 2009. With our strong cash position, we believe we have sufficient capital to complete the project as planned.”
Operating Highlights
On September 22, 2008, Intermap's common shares were added to Standard & Poor's Canadian SmallCap Index. Over the past 12 months, Intermap's share price, improved trading liquidity, and increased market capitalization were important factors in meeting the criteria for the index inclusion.
During the quarter, Intermap signed an agreement with G-VR Limited, a London-based producer of three-dimensional digital models, to incorporate NEXTMap's accurate elevation data for use with a wide range of computer-aided design 3-D visualization applications including: pre-development landscape modeling, engineering and design, architectural visualization, and computer gaming. The optimized TIN models are now available off-the-shelf for Great Britain.
In the third quarter, Intermap also added to its management team with the hiring of Richard Eagle as vice-president of product strategy. Mr. Eagle will help the Company to develop market and competition-driven product plans across the Company's business units through the implementation of an integrated product management (IPM) methodology. He worked previously for IBM and Ford Motor Company where IPM was a key part of their innovation strategy. The Company also recruited Adam Denman as vice-president of strategic business development in Europe. In this capacity, he will lead Intermap into European industry segments including GIS, automotive, insurance, Internet, and 3-D mapping. Mr. Denman was the director of business development at automotive navigation system and telematics supplier Magneti Marelli. He also served as the vice president of strategic marketing at NAVTEQ, where he helped define the digital map database provider's automotive strategy. Mr. Denman has also held leadership positions at Johnson Controls and Visteon Corp.
Automotive Safety and Navigation Market
In addition to its office in Munich, Germany, in the third quarter Intermap added a Detroit-area office to support and accelerate advanced automotive technologies in the industry. The Company is creating highly accurate 3-D road vectors within NEXTMap to help improve vehicle safety and enhance fuel efficiency in the transportation industry.
Next generation safety systems using high-precision 3-D road vectors can provide vehicles with precise knowledge of the road ahead to anticipate potentially dangerous situations, thereby helping reduce the number of serious injuries and fatalities. These 3-D road vectors can enable systems that alert drivers of upcoming curves and hills and are a critical element in the development of predictive headlights that automatically follow the road by physically turning into curves and up and down according to the change in grade. Precision road vectors can also provide advanced knowledge of the road ahead to automatically adjust engine and drive-line control units to increase fuel efficiency or extend the range of electric power sources in hybrid vehicles.
GPS / Personal Navigation Devices (PND)
In July, Intermap jointly announced with Magellan® the first commercial availability of Intermap's AccuTerra™ (www.AccuTerra.com) maps for Magellan's Triton® and eXplorist® handheld GPS devices, providing outdoor enthusiasts with the nation's best recreational map content. Customers can now download AccuTerra maps for recreational use, which are available for the contiguous United States and Hawaii, from the Magellan Web site. Initial reaction by Magellan users has been positive and well over a thousand users have downloaded the AccuTerra datasets. AccuTerra maps are available via download athttp://www.magellangps.com/products/software.asp. AccuTerra supports Magellan's Triton 400, 500, 1500, and 2000 units, and the eXplorist 400, 500, 600, and XL units.
Intermap also has a similar relationship with Bushnell Outdoor Products. Intermap's advanced AccuTerra topographic maps provide access to digital terrain data, off-road and recreation-related roads, trails, and points of interest such as campgrounds, service facilities, and landmarks. In addition, customers can benefit from a land management data layer that displays the location of public lands (national forest, wilderness areas, state parks etc.) and private property for most recreation areas in the United States.
Risk Management Applications
Intermap recently completed a flood model for Hungary, adding to the flood models previously completed for the Czech and Slovak Republics. The Company is also nearing completion of a flood model for a fourth country, which is scheduled to be announced in the fourth quarter.
During the third quarter, Intermap announced an agreement with Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist, and a part of the Marsh & McLennan group of companies. In collaboration with hydrological modeling experts, JBA Consulting, the group is developing comprehensive flood hazard maps and a state-of-the-art national flood model for mainland France. This will result in the most detailed countrywide model of the French territory and will be available by the end of 2009. This product will be closely followed by a fully probabilistic national flood model for France in early 2010. The model can enable insurance companies to better quantify their exposure to flood hazards for reinsurance and risk management purposes. Once completed, Guy Carpenter will focus on marketing the flood models to the re-insurance market while Intermap will concentrate its efforts on direct insurers.
In the third quarter, Intermap secured an agreement in the Czech Republic to launch a risk assessment service direct to home owners. This service, which includes address-specific flood risk reports, is scheduled to be launched during the fourth quarter.
In addition to risk management applications for European flood modeling, Intermap is developing wind storm modeling and assessment applications throughout Europe. The Company has teamed with a German-based firm with the technology to intersect synoptic wind fields with Intermap's NEXTMap terrain models and develop very precise delineation of high-risk areas.
Insurance companies can use NEXTMap's superior insurance risk information to better define possible risks. The result can be more effective portfolio management and a net reduction of costs through a reduced need for reinsurance coverage and lower payouts after insurable events occur. Intermap is also in discussions with United States insurers for similar commercial insurance applications.
NEXTMap Europe
Intermap continued with the processing of its NEXTMap Europe data in the third quarter. NEXTMap Europe covers approximately 2.2 million km² of area and encompasses 17 Western European countries. Great Britain and Germany have been processed in their entirety and are currently available for purchase. Intermap will continue to make data available for the remaining European countries as the final processing is completed. France is scheduled to be available in November, Italy by the end of December, and the remainder of Western Europe is expected to be fully processed and available for purchase by March 31, 2009.
Subsequent to the close of the third quarter, Intermap announced a contract with the survey section of GEOinfo, the organization responsible for the acquisition, generation, and dissemination of geodata in Lower Austria. The digital map data will be used for the georectification of orthophotos and the general planning of a large construction project for the renewal of the Vienna International Airport.
NEXTMap USA
NEXTMap USA is the Company's largest mapping program and includes terrain elevation and imagery data accurate to one-meter or better, covering nearly eight million square kilometers of the United States. Intermap collected over 1.2 million km² of NEXTMap USA data during the third quarter of 2008. The total data collected since the inception of the NEXTMap USA program is 6.9 million km², or 86 percent of the contiguous 48 states and Hawaii. The Company expects to have the NEXTMap USA program completed by December 31, 2009.
“We have been exceeding many of our production goals on the NEXTMap USA program and have seen a steady decrease in our cost per km² since the beginning of the project,” said Mr. Bullock. “We recently announced the commercial availability of the entire state of Oklahoma and additional states will be announced as they become commercially available over the coming months. Recent sales of NEXTMap USA data includes licenses of data to petroleum companies in North Dakota and wind energy farms in the midwest. Petroleum and wind energy represent new markets for NEXTMap data and we foresee further sales in these verticals.”
Intermap and FS Dreamscapes released the first products optimized for Microsoft Flight Simulator X for California, Hawaii, Mississippi, Florida, and the United Kingdom. The NEXTMap elevation data used in this application is eight times the resolution and 64 times more detailed than other previous terrain products for Flight Simulator.
NEXTMap data is available directly from Intermap or through selected partners worldwide.
Detailed financial results for the quarter and management's discussion and analysis can be found on SEDAR at: www.sedar.com.
A pdf copy of this release, along with financial details, is available by clicking here.
Conference Call October 27, 2008 at 4:30 p.m. EDT (2:30 p.m. MDT)
Intermap will host a conference call today, October 27, 2008, at 4:30 p.m. EDT (1:30 p.m. PDT, 2:30 p.m. MDT, 9:30 p.m. GMT). To participate in the call, please dial +1 416-695-5259 or +1-800-952-6845 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through November 3, 2008. Please dial +1 416-695-5800 or +1-800-408-3053 and provide the password 3273589 to listen to the rebroadcast.
About Intermap Technologies
Intermap (TSX: IMP.TO, AIM: IMAP.L) is a preeminent digital mapping company creating uniform high-resolution 3D digital models of the earth's surface. The Company is proactively remapping entire countries and building uniform national databases, called NEXTMap®, consisting of affordably priced elevation data and geometric images of unprecedented accuracy. Demand for NEXTMap data is growing as new commercial applications emerge within the GIS, engineering, automotive, GPS maps, insurance risk assessment, oil and gas, hydrology, environmental planning, wireless communications, transportation, and 3D visualization markets.
Headquartered in Denver, Colorado, Intermap employs more than 875 people worldwide, with additional offices in Calgary, Detroit, Jakarta, London, Munich, Ottawa, Paris, Prague, and Washington D.C. For more information, visit www.Intermap.com.
NEXTMap® is a registered trademark of Intermap Technologies Corporation.
For more information, please contact:
Intermap Technologies
Richard Mohr, Senior Vice President & Chief Financial Officer
rmohr@intermap.com
(303) 708-0955
Canada — Financial
Corbet Pala, Investor Relations
E-vestor Communications Inc.
(416) 657-2400
United States — Financial
Budd Zuckerman, Investor Relations
Genesis Select Corporation
(303) 415-0200
United Kingdom — AIM, Nominated Advisor
Canaccord Adams Limited
Andrew Chubb
+44 (0) 207 050 6500
Intermap Reader Advisory
Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Intermap believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of known and unknown risks and uncertainties. You can find a discussion of such risks and uncertainties in our Annual Information Form and other securities filings. While the Company makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to Intermap or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements made herein, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.