DENVER – March 17, 2014 (TSX: IMP) – Intermap Technologies Corporation (“Intermap” or the “Company”) today reported financial results for the fourth quarter and year ended December 31, 2013. A conference call will be held today, March 17th, at 4:30 p.m. Eastern Time to discuss the results.
All amounts in this news release are in United States dollars unless otherwise noted.
In 2013, Intermap’s primary focus was on the development of its Orion Platform™ - a software-driven spatial data platform that derives answers for customers and provides a recurring software revenue stream to the Company.
The Orion Platform’s key elements include:
1. 3-D Business Intelligence (“3DBI”): Analytics based SaaS applications for both GIS and non-GIS users
2. Infrastructure: Server based software delivered in both PaaS and traditional local licenses
3. Foundation Data: Seamless, off-the-shelf, high-resolution elevation data
4. Geospatial Services: Auditing and custom data collection
“Our Orion Platform embodies our solutions selling approach that provides our customers with the ability to analyze tera-bytes of different data types and deliver targeted information that is unique to a specific industry – for example: flood analysis in the insurance markets,” said Todd Oseth, President & CEO of Intermap. “The Orion platform allows businesses and governments to geospatially align everything in their environment. It also allows them to distribute complicated geospatial transformations in an easy to use browser format for both office and mobile users.”
Mr. Oseth added, “At the end of the year, we were able to increase investment in our software development capabilities in order to accelerate the introduction of our applications. For most of 2013, our rate of development was based on internally generated cash flows. Unfortunately, large cash generating spatial data infrastructure (“SDI”) contracts that were expected in 2013 have now moved into 2014; the effect was a reduction in our expected cash flows during the year. These reduced cash flows created an increase in our design cycles and delays in product launches into 2014. The latest $5.0 million round of financing, which was announced in February 2014, will allow us to bring these products to market earlier in 2014. We currently have new software applications in beta version with lead customers that will be introduced over the next few months. Further, our AdPro software application for the outdoor advertising space is gaining momentum in the market, and is currently being enhanced to include additional key analytics. We’re excited about the developments that are taking place at Intermap today and we look forward to revenue growth for 2014.”
“A key metric that we use to measure the progress of our business is positive adjusted EBITDA. We were successful in this metric during 2013 and we expect to see an improvement in 2014. Our identified sales opportunities have grown for this coming year, driven by commercial applications including data management, advertising, and risk management, as well as new SDI opportunities both domestically and internationally,” said Mr. Oseth. “It is important to remember that our mapping services business includes significant revenue and operational variations on a quarter-to-quarter basis as we saw during 2013. We’re currently completing two mapping services contracts where the majority of the revenue was recognized on a percentage of completion basis during the second and third quarters, when we were performing the airborne collection portion of the contracts. We are working to close new Orion Platform based SDI contracts in the coming months from our growing list of identified opportunities. Unfortunately, some of our larger opportunities have been delayed due to political unrest and contracting delays in the regions of interest where the opportunities exist.”
Mr. Oseth added, “Our net loss for the year was $14.9 million. This amount includes a $9.2 million impairment charge and $4.6 million of amortization on our data library. Absent these two related non-cash expense items, our net loss for the year would have been $1.1 million. As we move into 2014, we’re pleased that the expenses associated with the capitalization of only a portion of our data library are now behind us. With the absence of these non-cash charges in future periods, our path to sustained profitability is attainable. Additionally, we will now be able to report what we believe to be a more meaningful expression of the true operating results of the Company as reflected in the net income amount.”
For the fourth quarter 2013, Intermap reported total revenue of $4.1 million, 46% lower compared to $7.6 million last year. Contract services revenue in the fourth quarter was 34% lower at $1.9 million, compared to $2.9 million last year. Data licensing revenue was 53% lower at $2.2 million, compared to $4.7 million last year. The lower data licensing revenue was primarily the result of revenue recognized during the fourth quarter of 2012 on a single $2.3 million contract that was announced in November 2012 for the licensing of data from the Company’s Southeast Asia database. No similar size contract occurred in the fourth quarter of 2013. As of December 31, 2013 there remained $2.1 million in backlog contracts ($1.6 million in contract services, and $0.5 million in data licensing contracts) to be recognized in future periods.
For the fourth quarter 2013 and 2012, personnel expense was $2.9 million. Headcount increased slightly on a year-over-year basis, but the associated costs were offset by a change in the mix of personnel.
For the fourth quarter 2013, purchased services and materials expense was $2.1 million, a 62% increase from $1.3 million last year. The increase was primarily due to increases in subcontractor expenses associated with the airborne radar collection portion of a project in Southeast Asia and third-party LiDAR acquisition services on a contract in North America. Purchased services and materials includes (i) aircraft related costs (ii) professional and consulting costs (iii) third-party support services related to the collection, processing and editing of the Company’s airborne data collection activities, and (iv) software expenses (including maintenance and support).
Fourth quarter adjusted EBITDA, a non-GAAP and IFRS financial measure, was ($1.5) million, compared with $2.7 million last year. Adjusted EBITDA excludes restructuring costs, share-based compensation expense, gain or loss on the disposal of equipment, asset impairment charges, and gain or loss on foreign currency translation.
At the end of the fourth quarter, the Company took a full asset impairment charge on the remaining balance of its data library asset in the amount of $9.2 million. The fourth quarter net loss prior to the data library impairment charge was $3.4 million, compared with net earnings of $1.0 million for the same period last year. Net loss after the impairment charge was $12.6 million, or ($0.14) per share, compared with net earnings of $1.0 million, or $0.01 per share, during the fourth quarter last year.
For the year ended December 31, 2013, Intermap reported total revenue of $24.4 million, 12% lower than the $27.8 million recorded in 2012. Contract services revenue for the year improved 61% to $19.1 million from $11.9 million last year. Data licensing revenue was lower at $5.3 million compared to $15.9 million last year. The lower data licensing revenue was primarily the result of two significant sales during the year ended December 31, 2012 from the Company’s NEXTMap Asia dataset in the amounts of $8.1 million and $2.7 million, respectively. There were no significant data licensing contracts that generated similar amounts of revenue during the year ended December 31, 2013.
For the year ended December 31, 2013, personnel expense was $12.4 million, 4% lower compared to $12.9 million last year. The year-over-year decrease is primarily due to a change in the mix of personnel, even though headcount increased slightly on a year-over-year basis.
For the year ended December 31, 2013, purchased services and materials expense was $7.8 million, a 5% increase from $7.4 million last year. The year-over-year increase in purchased services and materials was due primarily to an increases in subcontractor expenses associated with the airborne radar collection portion of a contract in Southeast Asia, and third party LiDAR acquisition services on a contract in North America.
Adjusted EBITDA for the year was $1.2 million, compared with $5.0 million for 2012. For the year 2013, net loss was $14.9 million (includes a $9.2 million asset impairment charge), or ($0.18) per share, compared with a net loss of $2.9 million, or ($0.04) per share, last year.
The cash position of the Company at December 31, 2013 (cash and cash equivalents) was $2.4 million, compared to $2.1 million at December 31, 2012. Amounts receivable and unbilled revenue at December 31, 2013 was $6.6 million, compared to $8.4 million at December 31, 2012. Working capital improved to $3.9 million at December 31, 2013, compared to $1.9 million at December 31, 2012 (see “Intermap Reader Advisory” below).
Detailed financial results and management’s discussion and analysis can be found on SEDAR at: www.sedar.com.
Fourth Quarter Business Highlights
The Company announced that it was awarded a US$1.0 million contract from a repeat customer for Phase II of a geospatial professional services project initiated in 2011. This Phase II contract illustrates Intermap’s acquisition sensor agnostic approach, whereby LiDAR and digital aerial photo will be the sensors used to acquire new data. Phase I of the project utilized Intermap’s proprietary IFSAR radar based NEXTMap® data for the initial project planning to create a base model. The final fused database will be used for infrastructure design and management for a major utility corridor in the western United States. Work on the project commenced in Q4 and is expected to be completed during the first quarter of 2014.
Subsequent to year-end, in February 2014, the Company announced the completion of a private placement convertible debt financing for aggregate proceeds of US$5,000,000 (the "Debt Financing"). The Debt Financing matures 12 months from the date of issuance and the principal amount is convertible into common shares of the Company (the "Common Shares") at each of the holder's option at a price of US$0.4043 per Common Share. Simple interest is payable at maturity at an annual rate of 16.0%. If the principal amount is converted into Common Shares, any interest payable on such principal amount shall be forgiven and the Company shall cease to owe, and each of the holders shall cease to have any right to payment of any interest amount. In addition, an aggregate of 3,091,572 warrants were issued to a holder of the convertible debt, entitling such holder to purchase up to 3,091,572 Common Shares at a price of C$0.56 per share. The warrants expire in three years and are subject to adjustment in certain events. The Debt Financing is subject to a prepayment right by the Company at 116% of the principal amount at any time following six months from the date of closing, subject to a 60 day notice period and each of the holder's right to exercise its conversion rights during any such notice period.
The proceeds of the Debt Financing will be used by the Company to accelerate the development and market introduction of its RiskPro and GeoPro 3DBI software products for governments, enterprises and consumers.
As of March 12, 2013, there were 92,139,499 common shares outstanding.
Important factors, including those discussed in the Company’s regulatory filings (www.sedar.com) could cause actual results to differ from the company’s expectations and those differences may be material. Detailed financial results and management’s discussion and analysis can be found on SEDAR at: www.sedar.com.
Intermap will host a conference call today, March 17, 2014, at 4:30 pm EST (2:30pm MST).
To participate in the call, please dial +1-647-427-7450 or 1-888-231-8191 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through March 31, 2014. Please dial +1-416-849-0833 or 1-855-859-2056 and provide pass code 9049199 to listen to the rebroadcast. The call will also be available on Intermap's website at http://www.intermap.com/investors.aspx for replay.
About Intermap Technologies
Headquartered in Denver, Colorado - Intermap (www.intermap.com) is an industry leader in geospatial solutions on demand with its secure, cloud based Orion Platform™. Through its powerful suite of 3DBI software applications and proprietary development of contiguous databases that fuse volumes of geospatial data into a single source, the Orion Platform is able to provide location- based solutions for customers in diverse markets around the world. For more information please visit www.intermap.com.
Adjusted EBITDA is not a recognized performance measure under GAAP and does not have a standardized meaning prescribed by IFRS. The term EBITDA consists of net income (loss) and excludes interest, taxes, depreciation, and amortization. Adjusted EBITDA is included as a supplemental disclosure because management believes that such measurement provides a better assessment of the Company’s operations on a continuing basis by eliminating certain non-cash charges and charges that are nonrecurring. The most directly comparable measure to adjusted EBITDA calculated in accordance with IFRS is net income (loss).
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.
Reference is made to the Company’s audited Consolidated Financial Statements for the years ended December 31, 2013 and 2012, together with the accompanying notes, which includes a going concern disclosure and such disclosure remains applicable as of the date of the financial statements included herein.
For more information, please contact:
Rich Mohr, Senior Vice President & Chief Financial Officer
+1 (303) 708-0955
Cory Pala, Investor Relations
+1 (416) 657-2400