Financial Review
All amounts in this news release are in U.S. dollars unless otherwise noted.
For the second quarter, Intermap reported an increase in total revenue to $7.1 million, as compared to total revenue of $3.7 million for the second quarter of 2006. The contract services revenue component grew 105% to $5.9M and multi-client data licenses (MCDL) grew 60% to $1.2M. Approximately 77% of the MCDL revenue was associated with the Company's NEXTMap USA program, primarily in the states of Texas and Arizona and also the Canadian border. "The market for Intermap's products continued on a strong uptrend in Q2," stated Brian Bullock, president & CEO of Intermap.
Cost of services expense for the second quarter ended June 30, 2007 increased to $2.6 million, compared to $1.6 million for the second quarter of 2006, reflecting an increase in the costs associated with increased contract services work and preparation costs associated with future mapping activities.
Sales, general, and administrative expenses for the second quarter were $6.0 million, compared to $5.0 million for the second quarter of 2006. The increase was related to the overall expansion in the areas of sales, marketing, and business development to support its NEXTMap USA and NEXTMap Europe programs.
Amortization expense of the multi-client data library in the second quarter increased to $1.0 million (year-to-date $1.9 million) from $0.5 million (year-to-date $1.0 million) for the same period in 2006, as a result of the increase in amortization on the NEXTMap USA dataset. Amortization of the NEXTMap USA dataset totaled $3.1 million for the twelve month period ended December 31, 2006.
For the second quarter of 2007, Intermap reported a net loss of $4.3 million, or ($0.12) per share, compared to a net loss of $3.3 million, or ($0.09) per share for the same period in 2006.
Cash and cash equivalents at June 30, 2007 were $33.7 million, as compared with $48.2 million at December 31, 2006. The Company's working capital was $35.5 million, compared with $51.0 million at December 31, 2006. Following the close of the quarter, on July 12, 2007, Intermap completed a C$33 million common share financing issuing 5.5 million shares at C$6.00 per share. As of July 12, 2007, Intermap held $62.3 million in cash.
The net proceeds from the financing will be utilized to fund the development of value-added products in the Company's three most active markets: flood risk modeling, 3D personal navigation devices (PND), and advanced driver assistance systems. "We've made a strategic decision to develop value-added applications enabled by our 3D geospatial database in response to market demand coming from our most active markets," continued Mr. Bullock, "To enable automotive safety applications we are creating road centerlines for all classes of roads in the U.S. and Europe, whereas within the personal navigation device (PND) market we are now aggregating multiple recreational data sets for the U.S. Our flood modeling development is currently focused on full-country flood risk solutions for the insurance markets in Europe. The development of vertical market solution applications will increase the value of our NEXTMap datasets and can expedite market penetration - giving Intermap valuable first mover advantage. I am pleased to report positive progress on all fronts."
The net proceeds from the financing will also support the accelerated development of the NEXTMap USA and NEXTMap Europe data sets with the data collected in the first half of the year exceeding the amount collected in any prior full year. Intermap is collecting a record amount of NEXTMap data in 2007 and has therefore increased its data processing resources. The Company now has over 200 employees dedicated to processing the collected data in its Denver, Jakarta, and Ottawa offices. In addition, we have a subcontractor in Thailand with 40 staff dedicated to processing NEXTMap data. Plans call for the staffs to grow in Jakarta to 240 and Thailand to 100 by year-end.
OPERATIONAL HIGHLIGHTS
NEXTMap USA
NEXTMap USA is the Company's largest project that includes terrain elevation and imagery data accurate to one-meter or better, covering nearly eight million square kilometers of the United States. During the second quarter, Intermap collected an additional 664,000 square kilometers of data for its NEXTMap USA project, bringing the total collected since the inception of the project to 3.2 million square kilometers, or 40% of the continental United States. The Company expects to have the collection portion of the NEXTMap USA project completed by the end of 2008.
Currently, Intermap has data available off-the-shelf for 659 counties in the US. The Company expects a continued increase in license revenues in 2007 as marketing activities generate interest from new NEXTMap USA customers. Through June 30, 2007, total cumulative license revenue to date for NEXTMap USA data has grown to approximately $10 million.
NEXTMap Europe
NEXTMap Europe calls for the mapping of 17 European countries including Austria, Belgium, Czech Republic, Denmark, England, France, Germany, Irish Republic, Italy, Luxembourg, Netherlands, Northern Ireland, Portugal, Scotland, Spain, Switzerland, and Wales. Once completed, these datasets will be the most accurate 3D digital maps of Europe in existence.
Fifty-percent of the NEXTMap Europe project has been collected, or approximately 1.1 million square kilometers of data. NEXTMap Europe now includes the entire countries of England, Scotland, Wales, Germany, Denmark, and most of France. Final production of Germany is currently being completed and the entire dataset will soon be available. "As individual countries are completed in Europe, we expect additional revenue opportunities to close," stated Mr. Bullock.
The NEXTMap Europe project is expected to be fully collected by the end of 2007. Acceleration of the data processing is being driven by demand within the European automotive, government, and insurance sectors. The final processing of the map data is expected to be complete and available for sale shortly thereafter in 2008.
Flood Modeling
Intermap is developing a version of its successful flood modeling application pioneered in Great Britain for other European countries. During the second quarter, Intermap reached an agreement with SwissRe for use of their flood modeling algorithms within the application and for SwissRe quality assurance support for all of Europe.
This year, Intermap acquired MultiMedia Computer (MMC), a Czech Republic based company that provides Intermap with an easy-to-use 3D visualization tool that's currently being used for flood risk applications in the Czech and Slovak Republics. The Company is completing a demo section of Germany for the German insurance market and estimates that the German flood market is the largest in Europe, potentially valued at tens of millions of dollars per annum.
Insurance companies can use NEXTMap's superior flood risk information to better define possible risks, and thus can better manage portfolios and their own purchase of reinsurance coverage. The combined knowledge can result in a net reduction of annual costs and much better management of risk. Intermap is also in discussions with U.S. insurers for commercial insurance applications.
Personal Navigation Devices (PNDs)
During the quarter, Intermap developed successful demonstration products incorporating its 3D maps into handheld GPS personal navigation devices, or "PNDs". The target market for these devices includes users of off-road vehicles, hikers, hunters, fisherman, skiers, and mountaineers. Today's 2D maps generally end at the pavement, leaving a large market demand served only by GPS devices with digitized topographic maps. Intermap estimates that approximately 3 million 2D PND/GPS units were shipped to this recreational segment in 2006, at a growth rate of more than 70%. Intermap has installed portions of its 3D database of U.S. national parks onto handheld PND devices from leading manufacturers for prototype trials. The results have been impressive and the Company is working towards formalizing agreements with a leading manufacturer for product development.
The state of California is now complete with all data layers required for effective recreational PND navigation and safety. Significant market interest has been generated by Intermap's marketing and business development efforts for this product.
Mr. Bullock commented, "We believe that adding 3D visualization and safety to the recreational market applications will drive consumer demand and exceed market expectations. Safety applications will also migrate to the on-road applications as well fueling the need for accurate 3D descriptions of the road, which we are pursuing through our Advanced Driver Assisted Systems (ADAS) initiative."
Advanced Driver Assisted Systems (ADAS)
In the last year, Intermap has announced agreements with TeleAtlas, Harman Becker, and Siemens VDO to support emerging Intelligent Transportation Systems (ITS) applications with Intermap's 3D road vector data. Subsequent to the close of the second quarter, Intermap announced the signing of a joint development agreement with Visteon Corporation, an internationally recognized automotive technology developer, to provide Visteon with highly accurate 3D road geometries for the entire country of Germany. The data will be incorporated into the development of advanced applications of a 3D road vector map database for use in future automotive systems. The initial focus will be on predictive adaptive front lighting systems, which offers enhanced visibility for drivers at night by directing the headlamp light before the driver directs the vehicle into a curve, or up or down a hill.
Other applications will deliver 3D maps and active safety within vehicles to reduce accidents and traffic fatalities. NEXTMap databases can help enable automotive electronics to predict what lies ahead and alert drivers of impending hazards. Advance predictions of road geometries will also be an invaluable component of visualization devices, vehicle fuel performance enhancement systems, and advanced driver assistance systems. Intermap is in discussions with other automotive suppliers and manufacturers in Europe and North America.
Web-based 3D Visualization
Map and location related searches on the web are some of the most frequent searches requested today. Intermap offers the most accurate digital elevation maps in existence, which provides for improved user experience and application functionality. For this reason, in June, Microsoft launched an enhanced Virtual Earth(TM) 3D viewing platform based on Intermap Technologies' highly accurate and up-to-date elevation data for all of Great Britain. Intermap is also creating similar maps for all of Western Europe and the continental United States. The resulting product delivers a more seamless and accurate 3D experience for all Internet users visiting Microsoft's Live Search Maps for England, Scotland, and Wales.
Intermap's precise and uniform 3D digital terrain model serves as the foundation for the placement and alignment of aerial photography and other geospatial images. These images are then layered upon this 3D foundation to better align and place objects without distortion or undulation, thus creating a superior end product. "Having Intermap's highly accurate and reliable foundation layer under our imagery and building models allows us to provide one of the most accurate viewing experiences on the Internet today," said Aric Weiker, director of product management for the Virtual Earth platform at Microsoft.
"The market is quickly realizing there are a wide range of solutions that can be created through GIS applications," said Mr. Bullock. "Having access to a high-quality and uniform set of 3D data is the key to properly modeling and running advanced technologies. Our shareholders recognize that Intermap is setting the stage for worldwide 3D geometries that can make this happen."
Detailed financial results for the quarter and management's discussion and analysis can be found on SEDAR, at www.sedar.com.
Conference Call Today at 10am EDT (8:00am MDT)
A slide presentation accompanies Intermap's conference call today at 10:00 a.m. EDT (8:00 a.m. MDT, 3:00 p.m. GMT). Please download the presentation "IMP_Q2_Quarterly_Call_Aug_3" to your computer in advance of the call from ftp1.intermaptechnologies.com (copy and paste the file into your browser).
Username: Client20
Password: Q2map2007 (Password is case sensitive)
For security reasons this FTP site will be active until August 9, 2007.
To participate in the call, please dial 416-641-6125 or 1-866-542-4236 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through August 10, 2007. Please dial 416-695-5800 or 1-800-408-3053 and provide the password 3231005# to listen to the rebroadcast. An audio Webcast of the teleconference will also be available on Intermap's Website.
About Intermap Technologies
Intermap Technologies Corporation (TSX: IMP) (AIM:IMAP) enables customers to facilitate better decision-making and create applications for numerous commercial, governmental, military, and consumer products through the purchase of high quality and affordable elevation datasets. The Company is proactively remapping entire countries and building unprecedented national databases, called NEXTMap(R), consisting of highly accurate digital topographic maps that include elevation data.
Demand for NEXTMap data is growing as new commercial applications are emerging, including geographical information systems (GIS), engineering planning, transportation, automotive, navigation, flood, irrigation, environmental management and planning, telecommunications/wireless network planning, aviation, simulation, and 3D visualization. Internet applications include virtual tours, topographic maps and computer games. Datasets are also used to add interactive intelligence to airborne and satellite imagery.
Headquartered in Denver, Colorado, Intermap employs more than 500 people worldwide, with additional offices in Calgary, Detroit, Jakarta, London, Munich, Ottawa, and Prague. For more information, visit www.Intermap.com.
Intermap Reader Advisory
(R) NEXTMap is a registered trademark of Intermap Technologies Corporation
This news release may contain certain forward-looking statements, which include certain assumptions with respect to the future business and operations of the Company. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Balance Sheet
(In thousands of United States dollars)
======================================================================
June 30, December 31,
2007 2006
----------------------------------------------------------------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 33,744 $ 48,170
Amounts receivable 4,076 8,177
Unbilled revenue 3,351 2,477
Work in progress 255 -
Prepaid expenses 1,352 850
----------------------------------------------------------------------
42,778 59,674
Property and equipment 21,062 19,755
Multi-client data library 41,059 32,402
Intangible assets 1,966 -
Future income taxes - 23
----------------------------------------------------------------------
$ 106,865 $ 111,854
======================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 5,639 $ 6,003
Deferred lease inducements 205 120
Deferred revenue 832 1,715
Income taxes payable 62 30
Current portion of obligations under
capital lease 186 231
Current portion of long-term debt 388 538
Non-controlling interest - 14
----------------------------------------------------------------------
7,312 8,651
Deferred lease inducements 481 468
Obligations under capital lease 183 165
Long-term debt 1,116 1,242
Future income tax liability 449 -
----------------------------------------------------------------------
9,541 10,526
----------------------------------------------------------------------
Shareholders' equity:
Share capital 124,944 122,458
Contributed surplus 3,070 2,387
Deficit (36,884) (29,711)
Accumulated other comprehensive income 6,194 6,194
----------------------------------------------------------------------
97,324 101,328
----------------------------------------------------------------------
Commitments
----------------------------------------------------------------------
$ 106,865 $ 111,854
======================================================================
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Operations and Deficit
(In thousands of United States dollars)
======================================================================
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
----------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Contract services $ 5,924 $ 2,887 $ 11,084 $ 3,885
Multi-client data
licenses 1,223 765 2,302 1,897
----------------------------------------------------------------------
7,147 3,652 13,386 5,782
Operating costs:
Cost of services 2,573 1,633 3,843 2,402
Research and
development 1,018 594 1,847 1,078
Sales, general and
administrative 5,975 4,970 11,310 8,304
Depreciation of
property and
equipment 1,197 697 2,362 1,394
Amortization of
multi-client data
library 1,023 450 1,930 1,042
Amortization of
intangible assets 105 - 141 -
----------------------------------------------------------------------
11,891 8,344 21,433 14,220
----------------------------------------------------------------------
Loss before interest,
income taxes and
foreign exchange (4,744) (4,692) (8,047) (8,438)
Interest expense (38) (44) (75) (92)
Interest income 450 726 1,021 1,278
(Loss) gain on foreign
currency translation (5) 731 (52) 1,302
----------------------------------------------------------------------
Loss before income
taxes (4,337) (3,279) (7,153) (5,950)
Income tax expense
(recovery)
Current 27 7 54 7
Future (25) - (34) -
----------------------------------------------------------------------
Net loss and
comprehensive loss (4,339) (3,286) (7,173) (5,957)
----------------------------------------------------------------------
Deficit, beginning of
period (32,547) (21,309) (29,711) (18,638)
Redemption of shares - (78) - (78)
----------------------------------------------------------------------
Deficit, end of period $ (36,884) $ (24,673) $ (36,884) $ (24,673)
======================================================================
Basic and diluted loss
per share $ (0.12) $ (0.09) $ (0.19) $ (0.17)
======================================================================
Weighted average
number of Class A
common shares - basic
and diluted 37,391,608 36,866,008 37,224,439 35,962,869
======================================================================
INTERMAP TECHNOLOGIES CORPORATION
Consolidated Statements of Cash Flows
(In thousands of United States dollars)
======================================================================
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
----------------------------------------------------------------------
(unaudited) (unaudited) (unaudited) (unaudited)
Cash flows (used in)
provided by:
Operations:
Net loss $ (4,339) $ (3,286) $ (7,173) $ (5,957)
Items not involving
cash and cash
equivalents:
Depreciation of
property and
equipment 1,197 697 2,362 1,394
Amortization of
multi-client data
library 1,023 450 1,930 1,042
Amortization of
intangible assets 105 - 141 -
Loss on disposal
of property and
equipment 40 - 40 -
Stock based
compensation 508 899 972 1,040
Amortization of
deferred lease
inducements (53) (35) (71) (68)
Future income
taxes (25) - (34) -
Change in non-cash
operating working
capital 2,664 512 1,623 1,426
----------------------------------------------------------------------
1,120 (763) (210) (1,123)
----------------------------------------------------------------------
Financing:
Proceeds from
issuance of common
shares 1,355 1,130 1,697 11,060
Issuance costs - (1) - (2)
Repayment of long-
term debt (139) (133) (276) (273)
Repayment of
obligations under
capital lease (111) (52) (190) (105)
----------------------------------------------------------------------
1,105 944 1,231 10,680
----------------------------------------------------------------------
Investments:
Purchase of property
and equipment (2,388) (2,892) (4,774) (6,407)
Investment in multi-
client data library (5,796) (2,965) (9,343) (5,672)
Business acquisition
cost, net of cash
acquired - - (1,330) -
----------------------------------------------------------------------
(8,184) (5,857) (15,447) (12,079)
----------------------------------------------------------------------
Decrease in cash and
cash equivalents (5,959) (5,676) (14,426) (2,522)
Cash and cash
equivalents,
beginning of period 39,703 66,646 48,170 63,492
----------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 33,744 $ 60,970 $ 33,744 $ 60,970
======================================================================
Supplemental cash flow
information:
Cash paid for
interest $ 37 $ 44 $ 74 $ 92
Cash paid for income
taxes $ 33 $ 30 $ 49 $ 30
======================================================================
Cash and cash equivalents include deposits with financial institutions
that can be withdrawn without prior notice or penalty, and short-term
deposits with an original maturity of ninety days or less.
Contact:
Intermap Technologies
Richard Mohr, 303-708-0955
Senior
Vice President & Chief Financial Officer
Email Contact
OR
United
States ®�“ Financial
Genesis Select
Corporation
Budd Zuckerman, 303-415-0200
Investor Relations
Email Contact
OR
Canada
®�“ Financial
E-vestor Communications
Inc.
Corbet Pala, 416-657-2400
Investor Relations
Email Contact
OR
United
Kingdom ®�“ AIM, Nominated Advisor
Canaccord
Adams Limited
Andrew Chubb or Clayton Bush, +44-0-207-050-6500