Telular Corp. (WRLS) filed Quarterly Report for the period ended 2010-06-30.
Telular Corp. has a market cap of $45.69 million; its shares were traded at around $3.05 with a P/E ratio of 13.26 and P/S ratio of 0.97. WRLS is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Service revenues increased 23% due to a larger subscriber base at the start of the third quarter of 2010 as compared to the same period in 2009 and an increase in average revenue per unit (ARPU). There were 558,000 subscribers at the start of the third quarter of 2010 as compared to 444,000 at the start of the third quarter of 2009. The ARPU for the third quarter of 2010 was $3.99 as compared to an ARPU of $3.96 for the same period of 2009. Activations during the third quarter of 2010 remained flat; 18,000 new subscribers were added but a similar number were deactivated. The unusually high number of deactivations was the result of an administrative clean-up of the customer database of one of our most significant dealers. Of the total deactivations, over 14,500 came from this dealer who discovered that many of its customers had terminated their monitoring service over the previous four years, but the dealer had not notified Telular to terminate Telguard service for the same customers.
Other income for the three months ended June 30, 2010 increased by $22 to $99 from $77 for the same period of fiscal 2009 primarily due to an increase of $22 from interest income.
Engineering and development expenses decreased $103 (3%) primarily due to a $383 decrease in the engineering consulting fees offset by an increase of $295 in payroll related expenses as engineering and development filled open staff positions and reduced its utilization of third party consultants and a $15 decrease in office expenses as part of the Companys overall cost containment efforts.
Other income increased $45 primarily due to a $10 increase in interest income and a $35 increase related to the elimination of various miscellaneous expenses that were incurred in fiscal 2009.
Management regularly reviews net working capital in addition to available cash to determine if it has enough cash to operate the business. On June 30, 2010, the Company had $24,595 of unrestricted cash and cash equivalents and working capital of $31,802, compared to cash and cash equivalents of $17,904 and working capital of $28,666 on September 30, 2009. The Company can draw upon a Loan and Security Agreement with Silicon Valley Bank that provides an aggregate working capital line of credit up to $10,000. Management expects trade accounts receivable and inventory to turn into cash in short periods of time. As such, given the level of cash and cash equivalents, trade accounts receivable and inventory, management believes the Company has adequate resources to fund current and planned operations in a manner consistent with historical practices.
Investing activities used $582 of cash for the first nine months of fiscal 2010 from the acquisition of capital equipment. This compares to cash used by investing activities of $3,107 for the same period of fiscal 2009; $2,375 from the acquisition of TankLink and $732 from the purchase of capital equipment.
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