Telular (NASDAQ:WRLS)

On 1/9/2012 we added WRLS to the GeoBargain list @ $7.90

Catalyst: 12/05/2012 announcement of agreement to acquire SkyBitz Inc. which will make Telular the North American market share leader in Asset Tracking.  Expected to be accretive to 2012 non-gaap net income.  It is possible the market has not priced this acquisition in yet, due to the fact that it has not officially closed.

We are now removing WRLS from the GeoBargainList @ $8.78

Current road block: After further review, although company is a leader in its indusrty and the overall growth for the quarter was impressive the company missed 2012 second quarter analysts EPS estimate of $0.22.  We have to remove WRLS from GeoBargain list due to the fact it does not seem it will be able to meet our GeoBargain EPS growth requirements.  We will continue to track the WRLS story to see if any new developments increase EPS potential.

Peak performance: Reached a high of  $8.86 on 2/01/2012 for a maiximum potential return of 12%

Current Price: $8.78

Second Quarter 2012 Results

• In the second quarter of 2012, Telular reported revenue of $19.8 million, including $11.4 million from recurring services, and pre-tax income of $1.9 million.
• Second quarter 2012 Adjusted EBITDA, a non-GAAP financial measure, was $3.9
• Company Declares Regular Quarterly Dividend of $0.11 Per Share
• EPS of $0.07 vs $0.01 in prior year period

"We are pleased with our second quarter financial results, delivering solid year-over-year revenue growth in our Telguard and TankLink businesses while successfully assimilating the acquisition of SkyBitz into the Telular family," commented Joe Beatty, president and chief executive officer of Telular Corporation. "We are excited about our accelerated growth as we continue to build upon our stream of high-margin, recurring service revenue and deliver strong profitability," concluded Mr. Beatty.

"Our second quarter results were in-line with our expectations as we continue to report strong financial results and have solid visibility into our business," added Jonathan Charak, chief financial officer of Telular Corporation. "This quarter, we successfully closed on the acquisition of SkyBitz, and the subsequent positive contributions from this new line of business fully support our initial assessment of this transaction as accretive. Looking at the remainder of the year, we are reiterating our guidance for fiscal year 2012 Adjusted EBITDA of $16.0- $17.0 million, as well as our expectation to sell 25,000 to 35,000 Telguard units each quarter. We are optimistic about our long-term growth and profitability as we continue to grow our service revenue and scale the business."

Telular declared a quarterly dividend of $0.11 per share on its common stock, payable May 22, 2012, to shareholders of record as of the close of business on May 15, 2012. During the second quarter, the Company paid shareholders a dividend totaling $1.8 million and ended the quarter with $10.1 million of cash on the balance sheet.

The Company today also announced that its Board of Directors has appointed General John W. Handy to serve as an Independent Director effective May 1, 2012 until the next election. Among many accomplishments in his distinguished military career, General Handy was the Commander of the United States Transportation Command (USTRANSCOM) and Air Mobility Command. USTRANSCOM is the single largest logistics provider for air, land and sea transportation for the Department of Defense.

"We are excited about the Board's appointment of General Handy to serve as an Independent Director," said Mr. Beatty. "His deep experience in logistics within the military and his overall leadership skills as a Four Star General will be invaluable to the future growth of our business. On behalf of our other Directors, I welcome General Handy and look forward to working with him."

First Quarter 2012 Results

• In the first quarter of 2012, Telular reported revenue of $13.7 million, up 13% over the prior year period
• First quarter 2012 Adjusted EBITDA, a non-GAAP financial measure, was $3.4 million vs $1.5 in prior year

"2012 is off to a very exciting start as we accelerated our Telguard sales, exceeding the high end of our unit sales guidance, and expanded our market opportunity by signing a definitive agreement to acquire a third M2M business solution, SkyBitz," commented Joe Beatty, president and chief executive officer of Telular Corporation. "We are executing on our strategy to drive growth throughout the business, both organically and through strategic acquisitions, while continuing to generate cash and profitability. The acquisition of SkyBitz gives Telular the largest U.S. market share in the tracking of unpowered assets, such as truck trailers, and further enhances our proprietary SaaS technology platforms while strengthening our diversified customer base. We remain focused on continuing to build our stream of high-margin, recurring service revenue and delivering value to our shareholders," concluded Mr. Beatty.

"We have solid visibility into our business and plan to close an accretive acquisition that adds to our recurring service revenue base," added Jonathan Charak, chief financial officer of Telular Corporation. "Due to strong demand in the wireless security industry and the initial, positive reception of our recently launched 3G cellular alarm communicators, we are increasing our guidance for Telguard unit sales to 25,000 – 35,000 per quarter through the end of fiscal 2012.  Looking forward, we are giving guidance for fiscal year 2012 Adjusted EBITDA of $16.0- $17.0 million, pending the closing of the SkyBitz acquisition. Our new guidance is the result of stronger than anticipated demand in our Telguard business as well as the inclusion of the financial results of SkyBitz for the remainder of our fiscal year. We remain very excited about our long-term growth and profitability as we continue to generate cash and deliver a regular quarterly dividend to shareholders."

CHICAGO, Dec. 5, 2011 (GLOBE NEWSWIRE) -- Telular Corporation (Nasdaq:WRLS), a global leader in connecting businesses and machines over wireless networks, today announced the signing of a definitive merger agreement to acquire SkyBitz, Inc.- the leading provider of mobile resource management ("MRM") solutions focusing on tracking and management of truck trailers, intermodal containers, sea-going containers, rail cars, power generators and rental equipment. The acquisition expands Telular's position in the M2M space as a result of SkyBitz's broad base of additional customers and proprietary SAAS technology platform. The combined companies will create the largest "pure player" asset tracking and management company in the world.

SkyBitz's unique Global Locating System (GLS) satellite-based technology provides real-time visibility of many asset types. SkyBitz addresses a multi-billion dollar market opportunity by reducing operating costs, increasing efficiency and aiding in the compliance with regulatory requirements across an increasingly complex set of supply chains and business ecosystems.

Transaction terms include a purchase price of $42 million, comprised of $35 million in cash and $7 million in newly issued shares of common stock. The cash portion will be financed with a $30 million five-year bank loan and cash on hand. The acquisition is subject to the approval of a communications license transfer by the FCC, and is expected to close in 60-90 days. 

For the current fiscal year ending December 31, 2011, SkyBitz expects to record $35 million of revenue, of which 45% will be derived from recurring monitoring services, and net income before non-cash items of approximately $5.0 million. Further, by the end of their calendar fiscal year, SkyBitz expects to be tracking and managing approximately 190,000 assets, a net increase of approximately 11% over the end of the prior year.

The expected impact on Telular's projected 2012 results as previously announced is dependent upon the actual closing date of the transaction, and will be provided at that time. However, Telular does expect the acquisition to be accretive to its 2012 non-GAAP measure of net income before non-cash items.