Telular: Growth, High Yield And Value Wrapped In One Package

Telular (WRLS) released its fourth quarter and fiscal year results on Thursday, November 10. Management not only exceeded our expectations but raised forward guidance and increased the dividend ten percent. The yield exceeds 6% at the time of this writing.

Telular’s main business focus consists of the Telguard and Tanklink business segments.

Telguard: Provides primary and backup alarm communication solutions for residential, VoIP, small business, financial, commercial and fire system markets. These products transmit full data from virtually all security and fire systems to central stations using the cellular network.

Telguard accounts for the bulk of Telular’s revenue (81% in Q4 and FY2011). Telguard service revenue continues to grow sequentially.

The decrease in subscribers in Q3 was due to one of Telular’s largest customers (probably ADT) terminating 29,000 subscribers in that quarter. The reason given for the terminations is the large customer is cleaning up its inactive accounts. On a positive note, this customer continues to add new accounts while terminating past accounts that are
no longer active. The overall subscriber base has started to trend up during Q4.
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