NEXTMap USA completed, ahead of schedule
Q1 NEXTMap license revenues increase 95%
Intermap announces $2.2 million contract service project
DENVER — May 13, 2010 (TSX: IMP.TO) — Intermap Technologies Corporation ("Intermap" or the "Company") today reported financial results for the first quarter ended March 31, 2010. A conference call will be held today, May 13, 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.
On May 7, Intermap successfully completed the final processing of NEXTMap USA, on budget and two months ahead of schedule. NEXTMap USA is expected to be fully commercially available in Q2 of this year and represents the conclusion of an ambitious 5-year project. With NEXTMap Europe, completed in 2009, together with NEXTMap USA, Intermap has built a valuable asset: the world's most uniform, accurate, and complete 3D digital maps of the United States and Western Europe. The completion of these datasets allows Intermap to license this data into a myriad of applications that benefit from contiguous continent wide coverage including, automotive safety and fuel efficiency, flood risk modeling, consumer handheld navigation, online and in-car map visualization. Other countries currently available in the database include Malaysia and significant regions in Indonesia, Afghanistan, the Philippines and Australia. With the completion of these data sets, management has now refocused its attention from highly successful and accurate data production operations to sales and marketing of this valuable and unique asset. The transition which began in 2009 has accelerated with the principal objective of achieving positive cash flows from operations at the earliest possible date. The expansion and maintenance of the NEXTMap datasets will continue as a priority as internally generated funds permit.
For the quarter ended March 31, 2010, Intermap reported total revenue of $3.5 million, a decrease from $5.5 million for the same period in 2009. The decline in overall revenue was the result of lower revenue from Intermap's contract services business. Partially offsetting the decline in contract services revenue, NEXTMap revenue continued to grow year-over-year following the commercial release of NEXTMap Europe last year. The Company's NEXTMap multi-client data library ("MCDL") license revenue for the first quarter of 2010 grew to $2.3 million, up 95% from $1.2 million for the first quarter of 2009. In the first quarter, approximately 62% of MCDL license revenue was associated with the NEXTMap Europe dataset, 28% was associated with the NEXTMap USA dataset, and 10% was associated with the Asia-Pacific dataset.
Revenue from contract services work during the first quarter of 2010 was $1.2 million as compared to $4.3 million for the same period in 2009. The first quarter is typically the softest quarter of the year primarily due to the timing of government budgets and associated awarding of contracts. However, the Company is seeing a significant increase in proposal requests and believes there are several significant projects that Intermap is positioned to win in the second half of 2010.
"Our NEXTMap achievements are the foundation for the future growth of the company," commented Brian Bullock, president and CEO of Intermap Technologies. "Early indications of the value of NEXTMap Europe appeared in the form of increased license sales in Europe in the last two quarters. While the early revenue is coming from sales in the government and telecom sectors, Intermap also signed important new agreements with Tele Atlas, Skyguide, Ericsson, and Garmin for use of NEXTMap data in new products and web services."
With NEXTMap USA completed, Intermap believes this expanded database will be key in driving increased MCDL revenue going forward. 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 has been demonstrated in Europe, for instance, as the completion last spring enabled new opportunities in the automotive, telecommunications, and other markets. We have now sold NEXTMap licenses to four wireless carriers in Germany totaling more than $4 million in license revenue."
2010 will reflect a substantial reduction in cash outlays when compared to 2009 now that the NEXTMap USA and Europe databases are complete. Intermap has reduced data collection and production operations, and is finalizing the closure its facility in Ottawa, Canada. Intermap expects to complete this restructuring during the second quarter of 2010. Consolidated headcount was 633 at March 31, 2010, a decrease from 864 at March 31, 2009. The decrease was primarily driven by a decrease in operations personnel by approximately 33%, or 211 full-time personnel. The Company expects to reduce cash outlays by $11 million per year as a result of the reductions in production operations and completion of the acquisition portion of the NEXTMap datasets. The company will continue to reduce costs now that both databases are complete.
Gross operations expense, prior to capitalization, for the quarter ended March 31, 2010 was $4.1 million, compared to $6.1 million during the same period in 2009. The decrease in gross operations expense was primarily due to 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. Net operations expense for the quarter ended March 31, 2010 totaled $2.9 million compared to $1.7 million for the same period in 2009.
Sales, general and administrative ("SG&A") expense for the quarter ended March 31, 2010 was $6.0 million, a decrease from $6.2 million for the same period in 2009. Gross SG&A expense for the period ended March 31, 2010 and 2009, prior to capitalization, was $6.3 million and $6.9 million, respectively. The decrease in SG&A expense during 2009 resulted primarily from a reduction in corporate service personnel in connection with the reduction in production operations.
Adjusted EBITDA, a non-GAAP measure, for the quarter ended March 31, 2010 was a loss of $5.7 million compared to a loss of $2.9 million for the same period in 2009. The adjusted EBITDA loss for the 3 months ended March 31, 2010 is primarily attributable to a decrease in revenue of $2.0 million and an increase in net operations costs of $1.1 million as compared to the same period in 2009.
Amortization expense of the MCDL database increased 94% to $3.5 million from $1.8 million in the first quarter of 2009. The increase is due to increased MCDL sales, and the expansion of the underlying NEXTMap datasets.
For the first quarter of 2010, Intermap reported a net loss of $11.2 million or ($0.21) per share, compared to a net loss of $7.0 million or ($0.15) per share for the first quarter of 2009.
The cash position of the Company at March 31, 2010 (cash and cash equivalents) was $10.8 million, compared to $10.4 million at December 31, 2009. Working capital decreased to $10.3 million as of March 31, 2010 from $18.1 million as of December 31, 2009.
Management believes that the improvement in both contract services and NEXTMap license revenue, combined with decreasing operating expenses will allow Intermap to operate within its current working capital for at least the next twelve months. Management and the board of directors are fully engaged in a process to generate positive cash flow from operations as soon as reasonably possible. This includes considering a number of marketing, strategic relationship, cost containment, and risk reduction initiatives that may contribute to this objective.
As of May 10, 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.
On May 7, 2010, Intermap completed the final processing on NEXTMap USA. The 5-year project was completed months ahead of schedule and on budget. The entire database will be commercially available in the second quarter of 2010. NEXTMap USA joins NEXTMap Europe which became commercially available in its entirety in mid-2009, enabling several previously unavailable opportunities in certain market segments including automotive, telecommunications, and aviation.
Intermap now has direct sales representation in the USA, the four largest European economies, Malaysia, and Australia. Current sales activity is anticipated to result in significantly increased NEXTMap sales.
Following several months of weakness in contract services revenue, Intermap has begun to see a recovery in various global regions. Subsequent to the close of the first quarter, on May 13, 2010, Intermap received notification of a $2.2 million initial contract to immediately begin IFSAR mapping of a selected region of interest. The project is sponsored by several government agencies. The objective is to have the entire region mapped over the next few years, with a total budget estimated at $60 million.
GPS Navigation Devices and Smartphones
In the first quarter Intermap signed an agreement with Garmin to integrate data from NEXTMap Europe and NEXTMap USA with Garmin's GPS and navigation products. Initial Garmin products using NEXTMap data are expected to reach the consumer market in Europe beginning in the first half of 2010. Discussions concerning the expanded use of NEXTMap data in other Garmin products are underway. Intermap believes that NEXTMap data can be applied to Garmin's outdoor GPS products, automotive portable navigation devices, and aviation product lines.
In the United States, Intermap has agreements to supply its AccuTerra GPS recreational maps on Magellan, Pronounced Technologies, Apple, and Navico/Lowrance devices. 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.
Tele Atlas has licensed NEXTMap data to enhance digital map displays for automotive in-dash, portable navigation, and local search solutions. NEXTMap enables Tele Atlas to easily conflate visual assets such as building models, roads, and landmarks for a very accurate 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.
Intermap is delivering NEXTMap data with a targeted launch into equipped automobiles in late 2010. Intermap is working closely with Tele Atlas to identify numerous opportunities for partnerships between the companies.
Automotive Market — Safety, Navigation, and Fuel Efficiency
In the first quarter Intermap responded to requests for quotations for provision of 3D road data to three Tier 1 automotive suppliers. While a contract has not been awarded yet, we believe this is early evidence of the need for 3D road data to support high priority applications such as energy management and carbon emission reduction. NEXTMap can be utilized to improve fuel efficiency through eco routing and eco drive, to accurately and dynamically predict range for Electric Vehicles and to improve vehicle safety. NEXTMap Europe 3D road enhancements have been completed for Germany and France with Italy underway. Intermap is creating 3D road vector datasets for all road classes to support demand within the automotive manufacturing sector. 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. The enhancement is expected to be available for all of Europe by the end of 2010.
Intermap is also collaborating with Hella KGaA Hueck & Co. and Visteon Corp., both leading providers of innovative driver assistance systems, for a predictive front lighting system which 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 advanced driver assistance systems (ADAS) and safety applications leveraging reliable 3D maps anticipated to come in the 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.
Since completing NEXTMap Europe, the Company has licensed a total of $4 million of NEXTMap data to several wireless telecommunications companies for Germany and border countries. The NEXTMap digital terrain models (DTM) and digital surface models (DSM) will enable the optimization of existing wireless networks enabling advanced radio network planning in support of new antenna placement throughout the country. Network planners can determine optimal antenna heights and locations, field strength coverage and predictions, and ensure current and future network advancements are meeting the needs of their customers.
Without NEXTMap data, wireless companies would have to rely on inconsistent and unreliable maps or be forced to perform time-consuming on-site measurements and costly antenna adjustments, thus delaying new services and increasing costs associated with the necessary expansion and consolidation of radio networks. Telecommunications companies in Western Europe and the United States can all benefit from the richness of NEXTMap elevation data.
Flood Risk Management
Completing NEXTMap Europe has enabled Intermap to sign three significant new agreements related to flood risk applications including Ireland's Office of Public Works (OPW), the lead agency for flood-risk management in Ireland, GMES an EU-wide license for flood researchers, and Guy Carpenter for a flood model of France. Intermap has also used the completion of NEXTMap Europe to open discussions with the largest insurance group companies in Europe about pan European solutions for flood risk modeling.
Intermap has developed flood risk management models for a large portion of Europe, including the UK, France, Hungary, Switzerland, and the Czech and Slovak Republics. 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 will host a conference call today, May 13 at 4:30 p.m. ET (2:30 p.m. MT). To participate in the call, please dial 1-416-695-6622 or 1-800-766-6630 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through May 27, 2010. Please dial 1-416-695-5800 or 1-800-408-3053 and provide the password 6200146 to listen to the rebroadcast.
A full pdf version (including financials) can be found at: http://www.intermap.com/uploads/1273778698.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, Paris, Perth, Prague and Washington, D.C. For more information, visit www.Intermap.com orwww.AccuTerra.com.
NEXTMap data is available directly from Intermap, online at www.TerrainOnDemand.com, or through selected partners worldwide.
NEXTMap® and AccuTerra® are registered trademarks of Intermap Technologies Corporation
For more information, please contact:
Brian Musfeldt, Vice President & Chief Financial Officer
+1 (303) 708-0955
Canada — Financial
Cory Pala, Investor Relations
e.vestor Communications Inc.
+1 (416) 657-2400
United States — Financial
Budd Zuckerman, Investor Relations
Genesis Select Corporation
+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.