VANCOUVER, British Columbia, April 15 /PRNewswire-FirstCall/ -- GPS
Industries, Inc. (GPSI) (OTC Bulletin Board: GPSN), the only provider of Wi-Fi
powered, advertising enhanced GPS systems for golf facilities, resorts and
residential communities, today announced its audited Financial and Operating
Results for the Year Ended December 31, 2007 and its restated quarters ending
March 31, June 30 and September 30, 2007.
Inclusive of its restated quarters, revenues for 2007 increased to
$7.3 million or 11% over 2006 revenues of $6.6 million. Net operating loss
for 2007 was $11.6 million as compared to $5.4 million in 2006. Excluding the
one time non cash gain on derivative liabilities in 2006, the operating loss
improved by $1.7 million from 2006.
The net loss for 2007 was $24.1 million after charges for a non-cash
deemed preferred stock dividend of $12.5 million as compared to the net loss
of $17.0 million in 2006 after charges for a non-cash deemed preferred stock
dividend of $11.5 million
As a result of an in-depth review of certain sales and installation
agreements and course installations that occurred in the first three quarters
of 2007, the company determined that because of the nature of the recourse
obligations on certain leased systems, the commitment to upgrade certain
installed systems and commitments of system warranties, it had incorrectly
accounted for the related revenues, cost of goods sold, course assets, accrued
liabilities and deferred revenues. The Company's financial statements
presented in the Annual Report on Form 10-KSB includes these restatements.
Although there was no change to the Company's cash flow, overall revenues
deferred into future years were $1.6 million and the impact on net loss was an
increase of $697,000.
2007 Restatement of Financial Results
(amounts in thousands)
Increase (decrease)
Condensed Income Statements Q1 Q2 Q3 2007
Revenue $(164) $(1,454) $61 $(1,557)
Expense $148 $(1,032) $24 $(860)
Operating Income $(312) $(422) $37 $(697)
Condensed Balance Sheets
Assets $- $(217) $996 $779
Liabilities $312 $205 $959 $1,476
Accumulated Deficit $(312) $(422) $37 $(697)
2007 Operating and Financial Highlights and Recent Events
* System installations during 2007 increased to 37 18-hole equivalents
from 29.5 for 2006, an increase of 30%.
* GPSI acquired Direct Golf Services and Golf Academies (GPSI Europe)
for total consideration of $1.2 million in cash and common shares to
enhance our ability to sell and support the Inforemer product
internationally.
* GPSI closed the Uplink Asset Purchase Agreement on January 18, 2008
and paid approximately $11.8 million including notes payable of
$1.5 million, 142.1 million Common Shares valued at $7.8 million,
Series B Preferred Shares with a par value of $1.2 million and
4.9 million common stock warrants at an exercise price of $0.122 per
share valued at $0.2 million. With the acquisition GPSI acquired an
installed base of over 230 courses, a strong patent portfolio and a
dedicated and experienced group of employees.
* In November 2007, Robert Silzer Sr., resigned as the CEO and was
replaced by Douglas Wood on an interim basis. The Board of
Directors engaged the Carl Marks Advisory Group to assist in
resizing and restructuring the company to accommodate its current
level of operations. Subsequently, Douglas Wood passed away
unexpectedly on March 30, 2007.
* As part of the restructuring and refocus of the business, GPSI
reduced non-core activities and rescinded and terminated the Asset
Purchase Agreement related to the acquisition of Golf IT.
* GPSI established a new long term debt facility totaling $3.0 million
in February 2008 to replace and increase existing revolving credit
lines; however, with the unexpected death of Doug Wood, the
guarantor of $1.5 million of the loan, GPSI has triggered an event
of default on that portion of the loan. Currently, Silicon Valley
Bank is forbearing such demand as it negotiates with the estate of
Mr. Wood.
"2007 was clearly a difficult year for GPSI. We faced a number of
challenges that contributed to the financial performance including an
ineffective pricing strategy which ultimately confused the market place, the
delay in our new products and the delay in closing the UpLink acquisition
which we believe slowed down orders in the 2nd half of 2007. Our job now is
to redouble our efforts to deliver the best GPS system in the industry to our
customers while focusing on profitable sales that will ultimately bring
shareholder value," stated Bart Collins, member of the Board of Directors of
GPSI. "GPSI has invested significant amounts in the development of the new
HDX Inforemer System that stands well ahead of the competition in terms of
technological and advertising capabilities that will satisfy our customers
well into the future."
ABOUT GPS INDUSTRIES, INC.
GPS Industries, Inc. (GPSI) develops and markets GPS and Wi-Fi multimedia
solutions to enable managers of golf facilities, resorts, and residential
communities to improve operational efficiencies and generate new revenue
streams. The Company's Inforemer(R) Management Solutions product line provides
integrated software applications and a high-resolution 10.4-inch cart mounted
"HDX" display panel. The HDX panels vividly illustrate each hole, providing
precise distance measurement information, strategic playing tips and targeted
advertising messages. The patented system is seamlessly connected via a
high-speed Wi-Fi network that enables the entire facility into a wireless hot
spot. GPSI in combination with the Uplink Inova product, has in excess of 320
course installations worldwide. For additional information, please visit
http://www.gpsindustries.com
Forward-Looking Statements
This news release contains forward-looking statements within the safe
harbor provisions of the Private Securities Litigation Report Act of 1995. All
statements other than those that are purely historical are forward-looking
statements. Words such as "expect," "anticipate," "believe," "estimate,"
"intend," "plan," "potential" and similar expressions also identify
forward-looking statements. Forward-looking statements include statements
regarding expected materiality or significance, the quantitative effects
thereof, and any anticipated conclusions of the company, the Audit Committee
or management.
Because these forward-looking statements involve risks and und
uncertainties, there are important factors that could cause our actual
results, as well as our expectations regarding materiality or significance,
the quantitative effects thereof, the effectiveness of our disclosure controls
and procedures, and our deficiencies in internal control over financial
reporting to differ materially from those in the forward-looking statements.
These factors include the risk that additional information may arise or other
subsequent events that would require us to make additional adjustments, as
well as inherent limitations in internal controls over financial reporting.
Condensed Consolidated Income Statements
(thousands of dollars, except per share amounts)
For the Year Ended December 31, 2007 2006
Gross Revenues $7,266 $6,576
Cost of Sales 6,339 4,288
Gross Profit 927 2,288
Operating Expenses 12,707 10,812
Depreciation and Amortization 527 332
Operating Loss (12,307) (8,856)
Other Income (Expense) 714 3,415
Net Loss Before Deemed Preferred Stock
Dividend $(11,593) $(5,441)
Deemed Preferred Stock Dividend (12,500) (11,509)
Net Loss $(24,093) $(16,950)
Loss per common share - basic and diluted $(0.06) $(0.06)
Condensed Consolidated Balance Sheets
(thousands of dollars)
As at December 31, 2007 2006
Current Assets $7,368 $10,171
Long-term accounts receivable 224 274
Property and equipment, net 1,447 109
Patents 1,054 1,266
Capitalized Production, Implementation and
Acquisition Costs 538 116
Goodwill 1,359 -
Total Assets $11,990 $11,936
Current Liabilities $11,252 $17,509
Deferred Revenue 1,252 -
Stockholders' Deficit (514) (5,573)
Total Liabilities and Stockholders's Deficit $11,990 $11,936
SOURCE GPS Industries, Inc.
Joe Miller, Chief Financial Officer of GPS Industries, Inc., +1-604-576-7442,
Joe.miller@gpsindustries.com
