BSM Technologies Inc. Reports Fiscal 2019 First Quarter Results

TORONTO, Feb. 5, 2019 /CNW/ - BSM Technologies Inc. (TSX: GPS) ("BSM" or the "Company"), a leading provider of Internet of Things (IoT) enabled telematics and asset management solutions, today announced its unaudited consolidated financial and operating results for the three months ended December 31, 2018 (the "First Quarter"). The First Quarter is reported in accordance with the newly adopted IFRS 15 accounting standard, Revenue from Contracts with Customers (IFRS 15). The adoption of this standard has had a significant impact on the Company's reported results. For further information and a description of the Company's revenue recognition policy under IFRS 15, refer to the Company's condensed interim consolidated financial statements on SEDAR at www.sedar.com. Comparable amounts for the first quarter of fiscal 2018 have been restated to conform with the adoption of IFRS 15. All amounts are in Canadian dollars unless otherwise stated.

First Quarter Highlights:

• Total revenue of $15.7 million, an increase of 2% compared to $15.4 million in the first quarter of fiscal 2018 ("Q1 F2018") and an increase of 3% compared to $15.3 million in the fourth quarter of fiscal 2018 ("Q4 F2018").
  
  
• Subscription Fee Revenue ⁽ⁱ⁾ of $11.4 million, an increase of 1% compared to $11.3 million in Q1 F2018 and an increase of 3% compared to $11.1 million in Q4 F2018.
  
  
• Adjusted EBITDA⁽ⁱ⁾ of $1.6 million, a decrease of 6% compared to $1.7 million in Q1 F2018 and Q4 F2018.
  
  
• Subscriber Gross Additions⁽ⁱⁱ⁾ of 6,200 and Subscriber Churn⁽ⁱⁱ⁾ of 2,700, resulting in a December 31, 2018 Subscriber⁽ⁱⁱ⁾ base of 168,100 as compared to 164,600 as at September 30, 2018.
  
  
• Average Revenue Per Subscriber ("ARPU")⁽ⁱⁱ⁾ was $22.77 compared to $23.39 in Q1 F2018 and $22.49 in Q4 F2018, calculated on a constant currency basis⁽ⁱⁱⁱ⁾.

Management Commentary:

"We are pleased to begin fiscal 2019 with a significant improvement in our subscriber growth metrics," said Louis De Jong, President and Chief Executive Officer of BSM. "Moving forward in the year, we are focused on increasing sales momentum following the January launch of BSM illuminate, our analytics software platform designed to enable data-driven operational decision-making.  We are encouraged by the feedback we have received following the introduction of BSM illuminate and are confident in its future success."

Financial Highlights for the First Quarter:

The Company's condensed interim consolidated financial statements (unaudited) for the three months ended December 31, 2018 and 2017, together with its corresponding management's discussion and analysis can be found under the Company's profile on SEDAR at www.sedar.com and on the Company's website at http://www.bsmtechnologies.com.

Conference Call Details:

About BSM Technologies:

With more than 20 years of experience, BSM Technologies Inc., through its subsidiaries and affiliates, is a leading provider of Internet of Things (IoT) enabled telematics and asset management solutions. Focused on the Government, Service, Rail and Construction markets, BSM provides the technology, tools and services required to connect, analyze and optimize fleets, equipment and people – empowering data-driven operational decision-making. BSM illuminate, BSM's software platform, enables companies to leverage data insights, analytics and optimization tools for competitive advantage.  

For more information, please visit http://www.bsmtechnologies.com.

Non-GAAP Financial Measures and KPIs:

This Circular refers to "Subscription Fee Revenue", "Hardware Revenue", "Professional Services Revenue" and "Adjusted EBITDA", which are "non-GAAP financial measures" under applicable securities laws. Non-GAAP financial measures do not have any standardized meaning under the Company's GAAP determined in accordance with IFRS and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that that the disclosure of these items are meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined by the Company's GAAP under IFRS. These non-GAAP financial measures are identified and defined as follows:

Reconciliation of Adjusted EBITDA to Net Loss:

Key Performance Indicators:

In addition to the non-GAAP financial measures previously described, the Company uses a number of key performance indicators (KPIs). The Company believes these KPIs allow the Company to appropriately measure its performance against the Company's operating strategy. The following KPIs are not measurements in accordance with GAAP and should not be considered as an alternative to any other measure of performance under GAAP.

A "Subscriber" is defined by the Company as a customer's individual asset monitored by a telematics device.  A Subscriber is an important metric for the Company's investors because it provides an indication of the Company's ability to generate Subscription Fee Revenue from providing subscription services to the Company's customers.  Subscriber additions occur when the Company invoices Subscription Fee Revenue for a new device not previously in the Company's Subscriber base, and Subscriber churn occurs when the Company no longer invoices the Subscriber for Subscription Fee Revenue due to cancellation or expiry of the subscription services.

"Average Revenue Per User or Subscriber" or "ARPU" is calculated monthly as Subscription Fee Revenue divided by the average number of Subscribers during the month. The Company believes ARPU helps to identify trends and to indicate whether the Company have been successful in attracting and retaining higher value Subscribers. ARPU calculated on a constant currency basis is presented in Canadian dollars (the Company's presentation currency) using the effective average foreign exchange rate from the current period for all prior periods presented. Calculating ARPU on a constant currency basis removes the impact of foreign currency fluctuations on foreign denominated revenue when ARPU is presented in the Company's consolidated currency.

"Subscriber Additions" is the gross number of Subscribers added to the Company's Subscriber base in a given period and "Subscriber Churn" in the gross number of Subscribers reduced from the Company's Subscriber base due to either a temporary or permanent deactivation of subscription services for a monitored asset.

Cautionary Note Regarding Forward-Looking Statements:

This news release includes certain forward-looking statements or information under applicable Canadian, U.S. and other securities laws. Such forward-looking information and statements are often, but not always, identified by the use of words such as "seek," "anticipate," "believe," "plan," "estimate," "expect" and "intend" and statements that an event or result "may," "will," "should," "could," or "might" occur or be achieved and any other similar expressions. Such forward-looking information includes but is not limited to, statements with respect to future sales and Subscriber growth, and the BSM illuminate software platform enabling the Company to increase sales. These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business and include, but are not limited to, successfully launching the BSM illuminate software platform, successfully expanding the Company's relationship with Geotab, successfully evolving into a leader of analyzing and optimizing data for clients and current and future customers reacting positively to BSM illuminate, including the increased focus on analyzing and optimizing client data, leading to increased commercial growth. Management believes that these assumptions are reasonable; however, some risks include, but are not limited to, failing to efficiently or successfully launch BSM illuminate, failing to expand the Company's partnership with Geotab, failing to identify or implement effectively key business analytics and optimization metrics for clients and failing to engage customers or position products effectively with customers. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking information. Some of these risks, uncertainties and other factors are described under the heading "Risk Factors" in BSM's most recent annual information form available at www.sedar.com. Forward-looking statements or information are based on estimates and opinions of management at the date the statements are made. Except as required by applicable law, BSM does not undertake any obligation to update forward-looking information. Readers should not place undue reliance on forward-looking information.

SOURCE BSM Technologies Inc.