(PRNewswire) — (TSX: IMP) – Intermap Technologies Corporation ("Intermap" or the "Company") today reported financial results for the second quarter ended June 30, 2015. A conference call will be held tomorrow, August 14th, at 11:00 a.m. Eastern Time to discuss the results.
All amounts in this news release are in United States dollars unless otherwise noted.
Intermap reported total revenue of $0.7 million for the second quarter of 2015, a 25% decrease from the first quarter of the year. Second quarter revenue of $0.7 million is compared to $2.4 million in the same period of 2014. During the second quarter of last year, a $1.0 million NEXTMap® data sale was recognized on a single contract from a U.S. government entity. No similar sized contract was closed during the first six months of the current year, making up the majority of the variance between the current year and prior year periods. Additionally, NEXTMap data sales were lower in the U.S., Europe and Southeast Asia during the current year. Net operating loss for the second quarter of 2015 was $4.4 million, compared to a net operating loss of $3.2 million for the second quarter of 2014. Second quarter adjusted EBITDA, a non IFRS financial measure, was a loss of $3.7 million, an increase from an adjusted EBITDA loss of $2.8 million for the same period in 2014. Adjusted EBITDA excludes share-based compensation, change in value of derivative instruments, gain or loss on the disposal of equipment, impairment losses or reversals, and gain or loss on foreign currency translation.
"Our focus during the quarter was the closing of a spatial data infrastructure (SDI) project. We reported success with this on June 22, 2015 when we announced that Intermap had received a letter of award for an Orion Platform® implementation program valued at greater than $125 million" said Todd Oseth, President & CEO of Intermap. "This award represents the largest SDI award in the Company's history. We're currently working to define the final scope of the project and finalize the definitive agreement giving effect to the terms and conditions of the tender. We remain optimistic that this final step can be completed by the end of the third quarter at which time we will issue a press release with the pertinent details. We believe this award will be a catalyst to close other large Orion Platform government implementations as well as promote Intermap's location based Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) product offerings for the enterprise sector."
Mr. Oseth added, "during the second quarter we saw continued expansion of our InsitePro™ user base in both the US and South America. Our risk based customers are excited about InsitePro's capabilities and the fact that we can customize the application for their individual needs. In addition to the positive developments with our software business, we also saw a repeat customer contract with us for further data acquisition in North America. The contract was for more than $2 million. The majority of that contract is now complete and the results continue to surpass our published specifications. We are creating a truly amazing dataset for this customer."
Financial Review
Consolidated revenue for the second quarter of 2015 totaled $0.7 million and included (i) $0.1 million in mapping services, (ii) $0.1 million in professional services, (iii) $0.3 million in data licensing, and (iv) $0.2 million in 3DBI software licensing. For the same period in 2014, consolidated revenue totaled $2.4 million and included (i) $0.1 million in mapping services, (ii) $0.2 million in professional services, (iii) $1.8 million in data licensing, and (iv) $0.3 million in 3DBI software licensing. Contract backlog at the end of the quarter totaled $2.5 million.
For the second quarter of 2015, personnel expense was $3.0 million, compared to $3.1 million in the same period last year. The decrease was primarily due to reduced commission expense consistent with decreased revenue recognized on a year-over-year basis.
For the second quarter of 2015, purchased services and materials expense was $1.2 million, compared to $1.5 million during the same period last year. The decrease in this category of expense is primarily due to a decrease in job and contractor expenses associated with the Company's software development activities. Purchased services and materials includes (i) aircraft related costs, including jet fuel, (ii) professional and consulting costs, (iii) third-party support services related to airborne data collection efforts, processing and editing of the Company's data collection efforts, and (iv) software expenses (including maintenance and support).
The cash position of the Company at June 30, 2015 (cash, restricted cash, and cash equivalents) was $0.6 million, compared to $0.5 million at December 31, 2014. Amounts receivable and unbilled revenue at June 30, 2015 was $0.9 million, compared to $1.5 million at December 31, 2014. Working capital was negative $20.4 million at June 30, 2015, compared to negative $8.7 million at December 31, 2014 (see "Intermap Reader Advisory" below).
Detailed financial results and management's discussion and analysis can be found on SEDAR at: www.sedar.com.
Second Quarter Business Highlights
- On June 22, 2015, Intermap announced that a consortium led by the Company was issued with a governmental letter of award for the creation, operation and maintenance of a national spatial data infrastructure (SDI) program. The scope of work for the initial 2-year SDI implementation phase is valued at greater than $125 million, with product delivery expected to commence during the third quarter of 2015. The Company will also provide an operation and maintenance module valued at greater than $50 million for an additional 18-year period. The 20-year SDI program is administered within a public-private-partnership (PPP) framework under a build-operate-transfer (BOT) model, with the Company serving as the prime contractor, on a turnkey basis.
The award is the result of a competitive tender process during which the Company demonstrated the enabling versatility of its proprietary Orion Platform, the industry's first software-driven, big-data, geospatial analytics platform, capable of delivering customized solutions, at scale, to governments and commercial enterprises across multiple verticals from one unified control point. The Orion Platform was launched on June 19, 2013, and is based on the Company's proprietary software, data, airborne radar collection, and data fusion technologies.
The sovereign client intends to use the Orion Platform for the planning, development, and management of national interests, including natural resource exploration and production, environmental protection, land administration, telecommunication, transportation and power networks, defense and homeland security. The SDI program will include nation-wide data acquisition, utilizing the Company's proprietary Interferometric Synthetic Aperture Radar (IFSAR) technology, alongside satellite imagery and selective Light Detection and Ranging (LiDAR) coverage.
The award is subject to the entry into definitive agreements giving effect to the tender terms and conditions, including, without limitation, a project finance facility agreement, and is expected to close during the third quarter of 2015.
- On June 17, 2015, Intermap announced the release of NEXTMap World 10™ Digital Elevation Model (DEM). NEXTMap World 10 is the only global digital elevation model available that incorporates the consistency of radar with the resolution of optical. It leverages the best of each technology and builds on the success of Intermap's World 30 offering. NEXTMap World 10 combines the best of ASTER and SRTM data for a higher resolution, more accurate product by leveraging its patent-pending data fusion technologies. This fusion has led to higher spatial content of the final DEM. World 10 also contains superior coastal behavior and improved accuracies due to enhanced ICESat processing of land and water boundaries. Intermap will continue to integrate the best available data, including the newly released SRTM30, throughout the lifespan of the product. Intermap also provides services to integrate customer supplied elevation data as well as creation of Digital Terrain Models (DTM) anywhere in the world for advanced terrain analysis. World 10 can be used for diverse applications such as orthorectification, preliminary site engineering, and regional flood modeling. The entire world of 25,671 one-degree tiles, is ready for delivery.
- On June 15, 2015 , Intermap announced an InsitePro subscription from one of the largest insurers of homes in Florida . InsitePro is software as a service (SaaS) that supplies location-based risk assessment to the property insurance industry. A key benefit of InsitePro for this insurer is the ability to score location risks according to their own business rules. Florida is a challenging insurance environment, with a combination of coastal and inland flooding in addition to other risks. In response to these challenges, the market is evolving to provide private alternatives for flood insurance. Carriers who underwrite flood insurance are searching for alternatives to existing and traditional flood risk information so they can incorporate their own experience and appetite into their analytics and workflows. InsitePro meets this need by providing a more complete risk assessment for location-based risk. InsitePro supports write your own (WYO) flood, but adds extra value for excess and private insurance coverage. The software is built on a platform that allows each customer to configure risk analytics and leverage Intermap's extensive collection of geospatial datasets to deliver the precise information they need. InsitePro by Intermap automates complex risk assessment for underwriters. Typical uses of the risk scoring function include:
- Selection: deciding which properties to underwrite based on quantified risk.
- Pricing: matching premium to a better understanding of risk.
- Flood model validation: using terrain features to confirm the accuracy of flood zones.
- Multi-peril analysis: developing a combined view of risk for a location.
- On June 5, 2015 , Intermap announced that the Company was awarded a US $2.1 million contract for an airborne radar mapping services solution. Intermap is using its proprietary Interferometric Synthetic Aperture Radar (IFSAR) technology to collect orthorectified radar imagery and high resolution elevation data to enhance the customer's existing geospatial map database. This new dataset will be used for improved disaster planning, resource management, security interests, and infrastructure planning. The project will commence in July 2015 and the final deliveries of the dataset are expected to be substantially complete by the end of the year 2015.
- On April 28, 2015 , Intermap announced that it had completed a non-brokered US$2.5 million debt financing (the "Debt Financing") with Vertex One Asset Management ("Vertex") of Vancouver, BC . The promissory note granted under the Debt Financing will mature 12 months from the date of issuance. Simple interest is payable at maturity at an annual rate of 20.0%. The Debt Financing is subject to a prepayment right by the Company at 120% of the principal amount at any time, subject to a 30 day notice period. The Company intends to use the net proceeds of the Debt Financing for general corporate purposes.
- On April 3, 2015 , Intermap announced that it had completed a non-brokered US$1.5 million debt financing (the "Debt Financing") with Vertex One Asset Management ("Vertex") of Vancouver, BC . The promissory note granted under the Debt Financing will mature 12 months from the date of issuance. Simple interest is payable at maturity at an annual rate of 20.0%. In addition, warrants were issued to the holder of the debt, entitling the holder to purchase up to 9,178,266 Common Shares at a price of C$0.09 per share ( US$0.07 per share). Under the terms of the financing, Vertex will retire an outstanding $0.5 million note, which was issued on December 26, 2014 , and became due on March 31, 2015 . Additionally, with the retirement of the note, 8,333,333 conversion shares associated with the note were cancelled. The Debt Financing is subject to a prepayment right by the Company at 120% of the principal amount at any time, subject to a 30 day notice period. The Company intends to use the net proceeds of the Debt Financing for general corporate purposes.
