TORONTO, Feb. 8, 2018 /CNW/ - BSM Technologies Inc. ("BSM" or the "Company") (TSX: GPS), a leading provider of real-time GPS fleet and asset management solutions, today announced its unaudited financial and operating results for the three months ended December 31, 2017 (the "First Quarter"). All amounts are in Canadian dollars unless otherwise stated.

First Quarter of Fiscal 2018 Highlights:

• Total revenue of $14.9 million, a decrease of 19% compared to $18.4 million in Q1 F2017.
• Gross profit margin of 60%, an increase of 2% compared to 59% in Q1 F2017.
• Recurring Revenue⁽ⁱ⁾ of $11.3 million, a decrease of 3% compared to $11.6 million in the first quarter of fiscal 2017 ("Q1 F2017") and an increase of 3% compared to $11.0 million in the fourth quarter of fiscal 2017 ("Q4 F2017").
• Gross Subscriber additions⁽ⁱⁱ⁾ of 7,000 and Subscriber churn⁽ⁱⁱ⁾ of 2,600, resulting in a December 31, 2017 Subscribers⁽ⁱⁱ⁾ base of 166,100, up from 161,700 as at September 30, 2017.
• Average Revenue Per Subscriber⁽ⁱⁱ⁾ was $22.88 compared to $22.97 in Q1 F2017 and $22.67 in Q4 F2017.
• Adjusted EBITDA⁽ⁱ⁾ of $1.4 million, a decrease of 50% compared to $2.8 million in Q1 F2017 and an increase of 17% compared to $1.2 million in Q4 F2017.
• On December 20, 2017, as previously disclosed, BSM received approval from the Toronto Stock Exchange (the "TSX") to commence a normal course issuer bid (the "Bid"). Under the terms of the Bid, BSM may acquire up to 7,002,017 common shares, representing approximately 10% of the total public float of common shares, as defined by the TSX. As of December 31, 2017, BSM had not repurchased any common shares pursuant to the Bid.

Management Commentary:

"We have started fiscal 2018 with significant gross subscriber additions, which, when combined with the below average subscriber churn experienced this quarter, resulted in one of our strongest quarters of net subscriber growth," said Aly Rahemtulla, BSM's President and CEO. "The increased subscriber growth and lower subscriber churn reflects our commitment to pro-actively engaging customers and properly positioning our software solutions with customers which, we believe, will result in additional revenue growth in the future."

"Our recurring revenue and gross margin were largely consistent with previous quarters, however, our First Quarter results were affected by lower sales in hardware and professional services," added Mr. Rahemtulla. "Although significant quarter to quarter variability in our hardware revenue continues to be a reality of our business, we remain focused on building and executing upon a longer-term funnel of significant sales opportunities. In the coming quarters, we will continue to focus on software platform consolidation, which we have made significant progress on to date. We are seeing increased interest within our existing subscriber base in exploring the capabilities of the Mobi modules largely as a result of our increased cross-selling initiatives."

Financial Highlights for the First Quarter of Fiscal 2018:

The Company's interim unaudited consolidated financial statements for the three months ending December 31, 2017 and 2016, 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:

BSM Technologies Inc., through its subsidiaries, is a global top 20 commercial fleet telematics provider for automatic vehicle location (AVL) solutions that improve efficiency, accountability and reduce costs for fleet operators. BSM's end-to-end solutions automate record keeping and regulatory compliance, reduce fuel burn and idling, mitigate risk, and keep drivers safe. BSM provides solutions for commercial and government units who manage and operate diverse assets and large fleets that utilize its integrated fleet tracking, fleet maintenance, and intelligent business engine which provides real time, web‐based tracking of mobile and fixed assets.

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

Non-GAAP Financial Measures and KPI's:

This news release includes the measures "Recurring Revenue", "Hardware Revenue", "Professional Services Revenue", "EBITDA" and "Adjusted EBITDA", which are "non-GAAP financial measures" under applicable laws. Non-GAAP financial measures do not have any standardized meaning under the Company's GAAP and therefore may not be comparable to similar measures presented by other companies. 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 International Financial Reporting Standards. BSM believes that investors use these non-GAAP financial measures as indicators to assess telematics companies.

Reconciliation of Recurring Revenue, Hardware Revenue and Professional Services Revenue to Total Revenue:

Each of these revenue categories are components of total revenue as disclosed in the statement of operations in the Company's financial statements and presented within the financial highlights table of this press release.

Reconciliation of EBITDA and Adjusted EBIDTA to Net Income/(Loss):

Key Performance Indicators:

In addition to the non-GAAP financial measures previously described, the Company uses a number of key performance indicators (KPIs). BSM believes these KPIs allow the Company to appropriately measure its performance against its 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 as a BSM customer's individual asset monitored by a telematics device. The Company believes that a Subscriber is an important metric for the Company investors because it provides an indication of the Company's ability to generate Recurring Revenue from providing recurring service to its customers. Subscriber additions occur when the Company invoices for monthly services to a new telematics device not previously in the Company's Subscriber base, and Subscriber churn occurs when the Company no longer invoices a Subscriber for monthly services due to cancellation or expiry of the monthly services.

"Average Revenue Per User or Subscriber" or "ARPU" is calculated monthly as Recurring Revenue divided by the average number of Subscribers during the month. The Company believes that ARPU helps to identify trends and to indicate whether it is successful in attracting and retaining higher value Subscribers.

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 BSM's being able to pro-actively engage customers and properly position its software solutions with customers which will lead to additional revenue growth in the future, software platform consolidation plan, software migration to the Mobi software platform, increased cross-selling initiative, and plans to expand BSM's product solutions. 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 completing a hardware and software platform consolidation and developing an enhanced enterprise solution, and current and future customers reacting positively to the enhance enterprise solution 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 complete hardware and software consolidation and migrate to the Mobi software platform on time, failing to develop an enhanced enterprise solution, 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.

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