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Hemisphere GPS Reports Q1 2010 Financial Results

^{Published on 2010-05-11 02:40:22 - Market Wire}
 

 First quarter Operational Highlights - In the first quarter, Hemisphere GPS began a controlled release shipping program for the recently launched Outback eDriveXTM auto- steering system, which delivers a new level of precision steering and control performance. eDriveX steers more demanding farming practices including high-precision planting, strip tilling and bedding, requiring centimeter-level accuracy at a wide range of speeds. Full commercial availability and shipping of eDriveX commenced at the beginning of the second quarter. - In the first quarter Hemisphere GPS launched its new Earthworks business unit that designs and manufactures products for the construction market. The Earthworks product line is focused on machine guidance and control of earth-moving machinery. Hemisphere GPS has adapted its proven technology and applications currently used in agriculture, aerial application, marine and survey markets, to meet the needs of the construction industry. - Hemisphere GPS announced its first Earthworks product, the Earthworks X200 excavator machine guidance system, which improves operator accuracy, simplifies machine operations and reduces excavation rework. The X200 guides the operator with a graphical and numeric display of the excavator bucket relative to the desired grade. "My company engaged two Hemisphere GPS X200 systems during fall 2009 and we have proven them to increase productivity and impact the bottom line by more than 25 per cent, even on smaller jobs," said Doug Pratt, president of Prattco Excavating Ltd. The company plans to expand its Earthworks product portfolio by offering complementary excavator and blade solutions in 2010. - Hemisphere GPS signed an alliance agreement with Prolec Ltd. in support of the Earthworks business segment. Prolec Ltd. is a leader in machine guidance, safety and on-board weighing technology for the construction, road and rail industries. The two companies are collaborating on integrated systems incorporating their respective technologies. - In Australia, Hemisphere GPS implemented a plan to expand its Outback Guidance sales network by implementing the US model that helped Outback Guidance develop itself into one of North America's largest aftermarket suppliers of GPS guidance systems for agriculture. Hemisphere GPS is currently taking on new Outback Guidance Center Dealers in Australia and plans to launch its eCommerce website in autumn 2010. - Hemisphere GPS Inc. and UFA Co-operative Ltd. partnered to sell the Outback Guidance S-Lite GPS system in UFA's 35 farm and ranch supply stores across Alberta. - Hemisphere GPS launched its plug-and-play G100(TM) all-in-one steering and guidance system for auto-steer ready agricultural vehicles. The first version of the G100 software is compatible with the AGCO(R) Auto-Guide Ready(TM) tractors, while future GPS 100 software releases will be compatible with additional agricultural equipment. - Hemisphere GPS launched the Outback A220TM smart GPS antenna, an all- in-one GPS receiver and antenna for both aftermarket and OEM applications. Powered by Hemisphere GPS' dual-frequency EclipseTM GPS receiver technology, it provides fast, portable, submeter and decimeter differential GPS (DGPS) as well as centimeter real-time kinematic (RTK) positioning accuracy. Indications are that centimeter-level steering systems are the fastest-growing segment of precision agriculture. Outback eDriveX and Outback A220 are positioned ideally for this marketplace. Growers can capture a quick return on investment with this level of precision control to increase production and reduce waste. - During the first quarter Hemisphere GPS announced that its Board of Directors adopted a shareholder rights plan which is designed to provide shareholders and the board with adequate time to consider and evaluate any unsolicited bid made for the corporation and to ensure that any proposed transaction is in the best interests of the shareholders of the corporation. Shareholder approval will be sought at the corporation's annual and special meeting of shareholders to be held on May 18, 2010. 

 HEMISPHERE GPS INC. Consolidated Statements of Operations and Deficit Three months ended March 31, 2010 and 2009 (unaudited - expressed in U.S. dollars) ------------------------------------------------------------------------- 2010 2009 ------------------------------------------------------------------------- Sales $ 15,068,403 $ 17,955,052 Cost of sales 8,259,979 8,548,013 ------------------------------------------------------------------------- 6,808,424 9,407,039 Expenses: Research and development 2,383,976 2,101,362 Sales and marketing 3,271,446 3,224,684 General and administrative 1,725,689 1,575,204 Stock-based compensation 168,124 216,868 Amortization 866,674 713,480 ----------------------------------------------------------------------- 8,415,909 7,831,598 ------------------------------------------------------------------------- Earnings (loss) before undernoted items (1,607,485) 1,575,441 Foreign exchange loss (gain) 113,506 (10,463) Interest income (2,351) (9,335) ------------------------------------------------------------------------- Net earnings (loss) (1,718,640) 1,595,239 Deficit, beginning of period (40,121,337) (34,232,193) ------------------------------------------------------------------------- Deficit, end of period $(41,839,977) $(32,636,954) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per common share: Basic $ (0.03) $ 0.03 Diluted (0.03) 0.03 HEMISPHERE GPS INC. Consolidated Balance Sheets (unaudited - expressed in U.S. dollars) March 31, December 31, 2010 2009 ------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 9,055,059 $ 8,397,418 Accounts receivable 7,565,747 5,986,781 Inventories 17,407,480 17,751,949 Deferred commissions 173,739 187,436 Prepaid expenses and deposits 640,171 628,023 ----------------------------------------------------------------------- 34,842,196 32,951,607 Deferred commissions 109,366 158,171 Property and equipment 7,928,920 7,905,708 Intangible assets 7,148,361 7,386,776 Goodwill 42,168,991 40,919,957 ------------------------------------------------------------------------- $ 92,197,834 $ 89,322,219 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 6,244,966 $ 4,030,075 Deferred revenue 1,153,621 1,242,573 Current portion of capital lease 94,257 89,637 ----------------------------------------------------------------------- 7,492,844 5,362,285 Deferred revenue 729,777 819,888 Capital lease 242,032 258,426 Shareholders' equity: Share capital 107,708,468 107,708,468 Contributed surplus 4,021,570 3,853,826 Deficit (41,839,977) (40,121,337) Accumulated other comprehensive income 13,843,120 11,440,663 ------------------------------------------------------------------------- 83,733,181 82,881,620 ------------------------------------------------------------------------- $ 92,197,834 $ 89,322,219 ------------------------------------------------------------------------- ------------------------------------------------------------------------- HEMISPHERE GPS INC. Consolidated Statements of Cash Flows Three months ended March 31, 2010 and 2009 (unaudited - expressed in U.S. dollars) ------------------------------------------------------------------------- 2010 2009 ------------------------------------------------------------------------- Cash flows from (used in) operating activities: Earnings (loss) from operations $ (1,718,640) $ 1,595,239 Items not involving cash: Amortization 948,379 770,576 Stock-based compensation 168,124 216,868 Unrealized foreign exchange loss (gain) 137,239 (469,352) ----------------------------------------------------------------------- Cash from operations (464,898) 2,113,331 Change in non-cash operating working capital: Accounts receivable (1,362,290) (2,719,701) Inventories 847,293 (4,361,864) Prepaid expenses and deposits 6,851 (11,677) Accounts payable and accrued liabilities 2,038,004 1,857,500 Foreign currency contract - (284,256) Deferred revenue (236,135) (49,248) Deferred commissions 71,277 30,982 ------------------------------------------------------------------------- 900,102 (3,424,933) Cash flows used in financing activities: Capital leases (21,854) - ----------------------------------------------------------------------- (21,854) - Cash flows used in investing activities: Purchase of property and equipment (212,145) (287,504) Intangible asset addition (53,332) (203,910) ----------------------------------------------------------------------- (265,477) (491,414) ------------------------------------------------------------------------- Increase (decrease) in cash position 612,771 (3,916,347) Effect of currency translation on cash balances and cash flows 44,870 139,732 Cash and cash equivalents, beginning of period 8,397,418 16,288,684 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 9,055,059 $ 12,512,069 ------------------------------------------------------------------------- -------------------------------------------------------------------------