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DENVER - (TSX: IMP) — Intermap Technologies Corporation ("Intermap" or the "Company") today reported financial results for the fourth quarter ended December 31, 2009. A conference call will be held today, February 25, 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.
NEXTMap Europe was completed and became commercially available in 2009. Today, Intermap is focusing on the final processing phase of its NEXTMap USA dataset, which is scheduled to be commercially available in its entirety by mid-year 2010. The Company believes its NEXTMap Europe dataset represents the most uniform, accurate, and complete 3D maps of Western Europe in existence. When the NEXTMap USA dataset is released this summer, the same will hold true for its coverage of the United States.
Financial Review
For the year ended December 31, 2009, Intermap reported total revenue of $30.3 million, a decrease from $37.0 million in 2008. The decline in overall revenues was the result of lower revenues from Intermap's contract services business, which is characterized by its volatile sales period to period. NEXTMap's multi-client data library ("MCDL") license revenue for 2009 was $10.2 million, similar to the $10.8 million reported in 2008.
Revenue from contract services work during 2009 was $20.1 million as compared to $26.2 million in 2008. Contract services revenue for 2008 consisted of several contracts received during the year for mapping projects primarily in Asia totaling over $24.7 million, compared to $17 million in 2009.
"2009 was a difficult economic environment for everyone, and Intermap did not escape unscathed," commented Brian Bullock, president and CEO of Intermap Technologies. "Our contract services business decreased by 23% from 2008, and revenues from our NEXTMap business were flat, but the outlook for both businesses have improved. Many indicators suggest the difficult economic situation has bottomed and today we now have a substantial sales funnel of large contract service work we are pursuing, indicating strengthening revenues during 2010. Further, I am pleased to report that the trend to increased MCDL revenues that we experienced in the fourth quarter is continuing into the first half of 2010.
"In general, our business was impacted by the global economic weakness of 2009, primarily during the last half of the year," continued Mr. Bullock. "Some customers adopted a more cautious approach to their businesses, conserving cash by deferring previously planned projects and re-evaluating their short-term operating budgets."
During 2009, approximately 36% of MCDL license revenue was associated with the NEXTMap Europe dataset, 33% was associated with the Asia dataset, and 31% was associated with the NEXTMap USA dataset. For the same period in 2008, approximately 70% of the MCDL license revenue was associated with the NEXTMap USA dataset, 17% was associated with the NEXTMap Europe dataset, and 13% was associated with the Asia dataset. With NEXTMap USA nearing completion, Intermap believes this expanded database will be key in driving increased MCDL revenue in 2010 and beyond.
Mr. Bullock explains: "The availability of the entire NEXTMap USA database opens new revenue opportunities that would not otherwise be available without complete national coverage. This was recently demonstrated in Europe as the completion last spring enabled new opportunities in the automotive, telecommunications, and other markets."
Total NEXTMap licensing revenue generated since the inception of the NEXTMap program has reached $55 million at December 31, 2009. To date, the total capital invested by Intermap into building the NEXTMap datasets is approximately $103 million. Cash on hand at the end of 2009, combined with cash generated from the licensing of its datasets, will be adequate to fund the completion of the NEXTMap USA program by mid-year 2010.
As a result of the completion of the NEXTMap Europe program and significant progress toward the completion of the NEXTMap USA program, during the fourth quarter of 2009 Intermap began to reduce the capacity of data collection and production operations. A restructuring program included the reduction of personnel and the planned closure of a facility in Ottawa, Canada. Intermap expects to complete the restructuring during the second quarter of 2010. At December 31, 2009, the accrued liability associated with the restructuring was $0.4 million and relates to severance and retention benefits that are expected to be paid during the first quarter of 2010. Consolidated headcount was 714 at December 31, 2009, a decrease from 891 at December 31, 2008. This decrease was primarily driven by a decrease in operations personnel by approximately 25%, or 159 people. R&D and administrative personnel also decreased by 8%, or 13 employees, during the year.
Operating expense for the year ended December 31, 2009 totaled $10.0 million, compared to $8.2 million for the same period in 2008. Gross operations expense, prior to capitalization, for the period ended December 31, 2009 and 2008 was $20.9 million and $35.8 million respectively. The decrease in gross operations expense was primarily the result of the reduction in production operations as a result of the completion of the NEXTMap Europe program during the year and the completion of the airborne collection associated with the NEXTMap USA program early in 2009. The increase in net operations expense resulted from a reduction of the capitalization of costs to the NEXTMap programs from $27.4 million in 2008 to $10.9 million in 2009. In addition, operations incurred $0.5 million in restructuring costs primarily related to the reduction of personnel and the closure of the Ottawa, Canada facility.
Sales, general and administrative ("SG&A") expense for the year ended December 31, 2009 was $25.8 million, compared to $25.9 million for the same period in 2008. Gross SG&A expense for the period ended December 31, 2009 and 2008, prior to capitalization, was $27.9 million and $28.6 million, respectively.
Adjusted EBITDA, a non-GAAP measure, for the year ended December 31, 2009 showed a loss of $6.9 million, compared to a gain of $1.3 million for 2008. The adjusted EBITDA loss for the 12 months ended December 31, 2009 is attributable to the decrease in revenue of $6.7 million and an increase in operations costs of $1.8 million as compared to the same period in 2008. The term EBITDA consists of net income (loss) plus interest, taxes, depreciation, and amortization. Adjusted EBITDA also excludes gain (loss) on foreign currency translation, charges related to the disposal of assets, and stock-based compensation expense. Adjusted EBITDA is included as a supplemental disclosure because management believes that such measurement provides useful information regarding the Company's financial performance and will increase in importance as investors focus on cash flow in future periods.
Amortization expense of the MCDL database for the year increased to $10.1 million from $6.8 million for 2008. The increase was primarily due to the expansion of the underlying NEXTMap datasets.
For 2009, Intermap reported a net loss of $25.8 million or ($0.51) per share, compared to a net loss of $13.9 million or ($0.30) per share for 2008.
Fourth Quarter Results
For the fourth quarter of 2009, Intermap reported total revenue of $8.2 million, compared to $9.6 million for the same period in 2008. Intermap's contract services revenue component decreased 35%, contributing $4.9 million in the fourth quarter of 2009 compared to $7.5 million for the same period in 2008. Multi-client data license revenue from NEXTMap datasets increased to $3.3 million in the fourth quarter of 2009, compared to $2.1 million for the same period in 2008. The increase in MCDL license revenue was primarily due to the increased sales of NEXTMap Europe data that resulted from additional data availability.
Operations expense increased to $3.8 million in the fourth quarter of 2009, compared with $2.3 million for the same period in 2008. The increase in net operations expense resulted from a reduction of the capitalization of costs to the NEXTMap programs from $6.2 million in 2008 to $1.7 million in 2009. In addition, operations incurred $0.5 million in restructuring costs primarily related to the reduction of personnel and the planned closure of a facility in Ottawa, Canada. Gross operations expense, prior to capitalization, for the period ended December 31, 2009 and 2008 was $5.5 million and $8.5 million respectively. The decrease in gross operations expense was primarily the result of the reduction in production operations as a result of the completion of the NEXTMap Europe program and the completion of the airborne collection associated with the NEXTMap USA program.
SG&A expense for the fourth quarter of 2009 was $6.2 million, compared with $6.1 million for the same period in 2008. Amortization expense of the multi-client data library increased 98% to $3.3 million in 2009 from $1.7 million in 2008. Intermap reported a net loss of $7.6 million or ($0.15) per share in the fourth quarter, compared to a net loss of $3.7 million or ($0.08) per share for the fourth quarter of 2008.
The cash position of the Company at December 31, 2009 (cash and cash equivalents) was $10.4 million, compared to $27.2 million at December 31, 2008. Working capital decreased to $18.1 million as of December 31, 2009 from $30.0 million as of December 31, 2008.
"Existing cash resources, together with the recent winding down of production personnel and cash generated from the sale of the Company's products and services, are sufficient to fund operations throughout 2010," added Mr. Bullock.
As of February 25, 2010, there were 52,432,037 common shares outstanding.
Detailed financial results and management's discussion and analysis can be found on SEDAR at:www.sedar.com.
OPERATING HIGHLIGHTS
NEXTMap Databases
NEXTMap Europe became commercially available in its entirety in mid-2009, enabling several previously unavailable opportunities in certain market segments including automotive, telecommunications, and aviation. Since completing NEXTMap Europe, the Company received a supply agreement that will lead to color-shaded relief data based on NEXTMap Europe in automobiles in late 2010. Intermap has expanded its sales team for NEXTMap Europe with direct representation in the four largest economies. Sales activity is anticipated to result in significantly increased NEXTMap Europe sales in 2010.
To support demand within the automotive manufacturing sector, Intermap completed 3D road vector datasets for all road classes in Germany and France. Dataset completion for Italy is underway, and the Company intends to complete all classes of roads for all of Europe by the end of this year. It is important that vehicle safety systems encompass 3D road vectors for all classes of roads, including smaller rural roads, as these are often where the more difficult curves, dips, and slopes are encountered.
Intermap also expanded its geographic coverage for AccuTerra, its NEXTMap-based topographic map application for dedicated GPS units and personal navigation devices (PNDs), to include Europe. The expansion was facilitated by an agreement concluded with GIOVE Srl., a company headquartered in Italy that specializes in infomobility software. The agreement with GIOVE puts terrain data from NEXTMap Europe on their dedicated GPS units and PNDs and allows GIOVE's recreation data to be coupled with the Company's terrain data.
NEXTMap USA is in the final stages of processing and scheduled for commercial release in the summer of 2010.
Tele Atlas
The Company's NEXTMap elevation models are being licensed by Tele Atlas to enhance digital map displays for automotive in-dash, portable navigation, and local search solutions. Intermap's NEXTMap data provides a uniform and accurate geospatial base layer, enabling Tele Atlas to easily conflate other visual assets such as building models, roads, and landmarks — resulting in a realistic visualization product that matches the outside world. This supply agreement was a significant accomplishment for the Company's automotive division. Getting NEXTMap data into the vehicle is seen as a critical first step to supporting a variety of applications in partnership with Tele Atlas.
"Intermap's NEXTMap digital maps set the baseline standard for true 3D in-dash visualization and are uniquely able to deliver real-world views of not only the road network, but the entire surface of the earth," stated Rik Temmink, Tele Atlas' global vice president of product management. "We're excited to work with Intermap's NEXTMap terrain data, which allows us to take navigation to the next level with a visually superior product set."
Intermap is delivering data assets with a targeted launch into equipped automobiles in late 2010. Intermap has been working closely with Tele Atlas to identify numerous opportunities for partnerships between the companies.
Automotive Market — Safety, Navigation, and Fuel Efficiency
Intermap is creating highly accurate 3D road vectors from the NEXTMap database to enable the enhancement of, and help improve, fuel efficiency and vehicle safety in the transportation industry. From its Detroit and Munich offices, the Company is supporting advanced automotive technologies in the industry.
Intermap recently announced collaboration with Hella KGaA Hueck & Co., a leading provider of innovative driver assistance systems, for a predictive front lighting system based on Intermap's reliable 3D road geometries. The partnership integrates Intermap's high-resolution 3D road geometries and information supplied by camera systems in an automobile into Hella's front lighting demonstration system. The integration provides a significant increase in visibility for drivers at night and during inclement weather by automatically directing the headlamps before the driver manually steers the vehicle into a bend or up and down a slope.
This lighting application is the first of many ADAS and safety applications leveraging reliable 3D maps anticipated to come in next generations of passenger vehicles. Headlight control and other vehicle functions can be enabled via an independent 3D map database, separate from that of the onboard 2D navigation system.
Other partners are also testing NEXTMap data for eco-routing applications in Europe.
Flood Risk Management
Insurance companies can use NEXTMap's superior insurance risk information to better define risk. 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 has developed flood risk management models for much of Europe, including France, Hungary, Switzerland, and the Czech and Slovak Republics. Intermap has an agreement with Guy Carpenter & Company, LLC, a leading global risk and reinsurance specialist (a part of the Marsh & McLennan group of companies), for comprehensive flood hazard maps and a state-of-the-art national flood risk management model. This agreement has resulted in a new flood model for all of France, which has been presented to the leading property and casualty insurance companies in Europe for a pan-European solution for flood risk.
Recreational GPS and Smartphones
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.
In the United States, Intermap has OEM agreements to supply its AccuTerra GPS recreational maps to Magellan, Pronounced Technologies, Apple, and Navico/Lowrance. NEXTMap data can be used to power mobile recreation applications with nationwide mapping coverage available in the United States and Western Europe.
Intermap's application developed for the iPhone has received positive reviews and is providing significant exposure for the dataset; however, revenues have been lower than anticipated due to lower-than-expected volumes and price points.
"Enhancements made to the product line have been extremely helpful for AccuTerra users who conduct excursions straddling the boundaries between urban settings and the backcountry, where AccuTerra's off road map coverage is second to none. With the addition of new mapping data, AccuTerra provides more than 5.5 million square miles of wide-area coverage and more than 745,000 square miles of high-definition, super zoom backcountry and trail maps," said Michael Bullock, vice president, Intermap Consumer Electronics. "AccuTerra continues to establish itself as the de facto standard on the iPhone for backcountry mapping, even as it begins to broaden its reach into the urban setting by providing on-road data and map imagery."
Conference Call
Intermap will host a conference call today, February 25, 2010, at 4:30 pm EST (2:30pm MST). To participate in the call, please dial +1-416-340-8018 or +1-866-223-7781 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through March 10, 2010. Please dial +1-416-695-5800 or +1-800-408-3053 and provide the password 7310672 to listen to the rebroadcast.
A full PDF version of this press release (including financials) can be found here:http://www.intermap.com/uploads/1267130657.pdf
About Intermap Technologies
Intermap (TSX: IMP.TO) is a preeminent digital mapping company creating uniform high-resolution 3D digital models of the earth's surface. The Company has proactively remapped entire countries and is building uniform national datasets, called NEXTMap®, consisting of elevation data and geometric images of unprecedented accuracy. Demand for NEXTMap data continues to grow as new commercial applications emerge within the GIS, engineering, automotive, consumer electronics, insurance risk assessment, oil and gas, renewable energy, hydrology, environmental planning, wireless communications, transportation, aviation, and 3D visualization markets.
Intermap is headquartered in Denver, Colorado, with additional offices in Calgary, Detroit, Jakarta, London, Madrid, Munich, Ottawa, Paris, Perth, Prague and Washington, D.C. For more information, visitwww.Intermap.com or www.AccuTerra.com.
NEXTMap data is available directly from Intermap, online at www.TerrainOnDemand, or through selected partners worldwide.
NEXTMap® and AccuTerra® are registered trademarks of Intermap Technologies Corporation
For more information, please contact:
Intermap Technologies
Brian Musfeldt, Vice President & Chief Financial Officer
bmusfeldt@intermap.com
+1 (303) 708-0955
Canada — Financial
Cory Pala, Investor Relations
e.vestor Communications Inc.
cpala@evestor.com
+1 (416) 657-2400
United States — Financial
Budd Zuckerman, Investor Relations
Genesis Select Corporation
bzuckerman@genesisselect.com
+1 (303) 415-0200
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.
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