Telular Earnings 08/06/09 by D Klein


Overall Telular’s earnings results topped my expectations, a pleasant surprise for a change.  The Telguard unit is performing extremely well.  Management raised Telguard guidance for two consecutive quarters, this time from 20 to 25,000 units per quarter to 30 to 35,000 units per quarter.  Telguard revenues were up over 14% sequentially from the last quarter selling 34,000 units and adding 28,000 subscribers.  Churn was down to 0.7%,  a very respectable number.  Telguard average unit prices came in at $141/unit from $143/unit the previous quarter and subscriber revenue was $3.96/month which was unchanged, not bad considering the economic conditions.

Product sales for FWT’s and SupplyNet dropped, a disappointment but not enough to offset the strength of the Telguard unit.  That said recurring revenue for SupplyNet increased to $351,000 from 282,000 last quarter.  The number is small but trending up.  Product sales for these divisions will continue to struggle until the global economy starts to recover especially in the America’s but they should start to grow once a recovery starts.

Telular completed a modified “Dutch Auction” tender offer purchasing 2,344,857 shares, approximately 14% of Telular’s outstanding shares as of the closing date of the transaction.  To date Telular has repurchased 4.5 million shares, or approximately 23% of the outstanding shares. Under its previously authorized share buyback program, the company still has an additional $1.2 million available to repurchase shares on the open market.

Another plus was the cash position dropped a less than expected 1.5 million after accounting for the stock buyback.  Part of the reason was income from continuing operations before non-cash items was $1.1 million, another strengthening trend.

I said in a previous blog, “I still hold out some hope given its balance sheet, new management, where the stock price is and events over the past year.”  That hope is gaining strength, given a strengthening balance sheet and an upward trend starting to developing for top line growth.

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One Response to Telular Earnings 08/06/09 by D Klein

  1. David says:

    Some SEC 10-Q observations for the period ending 6/30/09: – Revenue outside the US has almost disappeared. CALA, EA and AME revenues account for less than 1%. The only good news here is that they have nowhere to go except up….hopefully. -even though discontinued operation earnings wiped out the operating earnings, discontinued ops added over one million in cash. I’ll take that every Q as long as discontinued ops last. -average shares outstanding reported was 17,037,000. Actual shares as of 7/31 was 14,898,022. Diluted shares after accounting for all dilutive shares, including those considered to be anti dilutive at this point is 18,983,000, slightly less than I thought.

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