CellPoint Inc. Reports Preliminary Results for the Year Ended June 30, 2001

CellPoint Inc. Reports Preliminary Results for the Year Ended June 30, 2001 * Strong Revenue Growth as Mobile Location Industry Gains Traction * Write-down in accordance with US GAAP in Preparation for Sale of Unwire * Growth in Revenues Outpaces Growth in Costs LONDON, August 29th 2001 - CellPoint Inc. (Nasdaq: CLPT), a global provider of mobile location technology and services, announces the Company's preliminary unaudited results for the fiscal year ended June 30th, 2001. Peter Henricsson, Chairman and Chief Executive Officer of CellPoint Inc., reports total revenues from continuing and 'discontinued operations' of $5,068,148 compared to $915,478 in revenues in the previous fiscal year. "We have recently experienced a marked increase in visibility and demand for mobile location solutions. This trend, coupled with the restructuring announced in July of this year, points to the Company reaching cash flow positive on a quarterly basis during this fiscal year," said Henricsson. US GAAP Reporting for Discontinued Operations The decision made in the fourth quarter of fiscal 2001 to focus on the location services business and put Unwire up for sale requires that the Company disclose the results of the telematics operations as 'discontinued operations' according to U.S. Generally Accepted Accounting Principles (US GAAP) requirements. Accordingly, the results of the telematics business area have been segregated from the results of the Company's ongoing business of location services. The historical financial statements have also been restated to conform to this required presentation. Unwire remains a wholly-owned subsidiary of CellPoint Inc. at June 30, 2001 and today. However, Unwire's financial results are reported under Discontinued operations in the Consolidated Statements of Operations and its financial position is presented in the Consolidated Balance Sheets under Net assets of discontinued operations as the Company plans to sell this business this year. Results from Continuing Operations The location services business area, referred to as 'continuing operations', reports that revenues this fiscal year rose five-fold to $4,111,804 compared to revenues of $839,003 in the previous year. Reported EBITDA* from continuing operations was -$9,899,813 for the year compared to -$5,514,456 in the previous year. Virtually all revenues in the year came from the European market. Operating expenses from continuing operations were $17,355,551, of which $3,931,215 was depreciation and amortization. Last year, operating expenses from continued operations were $7,947,067, of which $2,099,862 was depreciation and amortization. Selling, general and administrative expenses including research and development for continuing operations were $12,049,444 for the year compared to $4,320,399 in fiscal 1999/2000. The Company incurred a loss from continuing operations of $16,073,365. This compares to a loss of $7,652,249 for the same period ending fiscal 2000. These operating results are consistent with the rapid expansion called for in the Company's Business Plan for location technology and services. During the fiscal year, the Company expanded its operations to achieve commercialization of the location services technology, increased its marketing and development activities, and expanded staff to 130 persons compared to 71 a year ago. "Revenues were less than we had expected though, particularly during the fourth quarter due to the economic downturn, generally and in the telecoms sector, and also in part due to uncertainty surrounding $10 million in convertible notes we issued in December 2000," said Henricsson. " While we have not lost any business we have been bidding on, orders have been delayed as a result and we expect an improvement this calendar year based on our current customer activities and that the convertible note situation is being cleared up. In addition, revenue recognition rules under US GAAP can generate spikes and valleys in quarterly revenues reported; as such, we have not yet recognized all revenues from our current implementations." Combined Results from Total Operations A write off of intangible assets within Unwire resulted in a loss of $43,624,886 attributed to the disposal of 'discontinued operations'. The intangible assets were valued initially based on the Company's stock price when Unwire was acquired in February 2000 for 1,075,000 shares and no cash. The majority of the loss on disposal of the 'discontinued operations' results from a write-down of these intangibles to their expected net realizable value. The loss from 'discontinued operations' of $10,876,197 represents the operating losses of the telematics division for the fiscal year through the date of the Board approval for the sale of Unwire. This amount includes depreciation and amortization of $8,067,016. The net loss for the Company for the year was $70,574,448 of which the majority was attributed to the loss on disposal of and loss from 'discontinued operations' of $43,624,886 and $10,876,197 respectively. The net loss for the previous year was $11,831,260 including the loss from 'discontinued operations' of $4,179,011. The number of employees within 'discontinued operations' in the current period was 40 compared to 19 in the previous period. The total number of staff at the end of the fiscal year was 170 compared to 90 in the previous year. As a result of the write down for 'discontinued operations' in Unwire and the Company's operating losses in the telematics and location services segments, the stockholders' equity at fiscal year end was $13,088,505 compared to $80,100,076 in the previous year. CEO Commentary "Considering the very difficult market and commercial backdrop, and the write down losses associated with the disposal of CellPoint's telematics business, I am pleased to report this very positive growth ," said Peter Henricsson. "Not only have we shown a 456% growth in year-on-year revenue, but we also grew steadily over the year, from revenues of $1.9 million in the first half to $3.2 million in the second half. Additionally, we have managed to control costs and our burn rate while at the same time grow our staff from 90 to 170. Today, we have reached the critical mass with 130 staff in continuing operations and the focus has shifted from core development work to sales and implementations." Henricsson continued, "On July 25, 2001, we announced a three-part restructuring to further focus CellPoint and take the Company to cash- flow positive in the quickest possible time. The restructuring consists firstly of a negotiated buyout of the Convertible Notes owned by Castle Creek Technology Partners, secondly direct private placements to strategic investors to raise additional working capital, and finally the planned sale of telematics subsidiary Unwire. On this last point, our Board of Directors determined that the investment required to operate the Unwire subsidiary did not fit in with the Company's longer-term strategic goals. Into the future we intend to concentrate all of our efforts and resources in developing and implementing location-based services." CellPoint intensified its marketing efforts during the year with demonstrations, tests and proposals to operators in Europe, Asia, North America and the Middle East. "While the location services market had not taken off as expected during the fiscal year, we are really seeing strong demand today that is securely anchored by the mobile operators' stated needs to increase billable services," said Henricsson. "Today and going forward, it is about increasing services to boost average revenue per user (ARPU) - our Mobile Location System (MLS) platform enables new billable services that are network-wide today with a seamless migration to next-generation mobile offerings. CellPoint's MLS works across today's 2G networks (current GSM worldwide), 2.5G (GPRS) and 3G/UMTS. This means no changes for operators or applications as GSM evolves - MLS is future-proof." Currently CellPoint has five commercial location platforms installed of which three were won in competitive bids. The Company is in active price negotiations for MLS implementation in more than 10 countries. Our partner program is focused on quality and fit and has yielded relationships with equipment manufacturers such as Compaq, enterprise infrastructure providers such as Oracle and systems integrators such as Sema. On the applications and content side through CellPoint's LDZ, 426 independent application developers now have our open Application Programmer's Interface (APIs) to build locations application for MLS. Summary Highlights 2000 - 2001 CellPoint accepted for trading on the Nasdaq National Market CellPoint Wins Competitive Bid at EuroTel - first winner of competitive bid in the location services industry CellPoint Signs Commercial Agreement with France Telecom Mobiles for GSM location services CellPoint Wins Competitive Bid at E-Plus - CellPoint delivers world's first commercial network-based location services for German mobile operator E-Plus Listing in Europe - CellPoint successful in gaining secondary listing and begins trading on the Stockholm OM Exchange, now called Stockholmsbörsen CellPoint Launches MLS - world's first network-based location platform; enables location services for every subscriber in any GSM network Nokia Sponsors CellPoint to Join LIF (Location Interoperability Forum) iMate Service Announced - new breed of information services for the mobile Internet AirFlash and CellPoint Join Forces to offer integrated end-to-end location-based services Highlights after June 30 KPN-Group - CellPoint and E-Plus sign Group License Frame Agreement for Mobile Location Systems with terms negotiated for operators within the KPN-Group A-GPS - CellPoint and SiRF partner to provide GSM/3G operators with an Anytime, Anywhere Location Information Platform Location Developers' Zone Launched, 426 Companies On Line - LDZ facilitates third-party development of applications and services targeted to CellPoint's mobile location platforms Major Restructuring - CellPoint Announces Major Restructuring - negotiates agreement for buyout of convertible notes, infusion of new capital and Unwire subsidiary on the market These unaudited preliminary results are released in accordance with reporting rules on the Swedish stock exchange, Stockholmsbörsen. The Company's full report on Form 10KSB will be filed with the SEC by September 28th and will be available at http://www.freeedgar.com and www.cellpoint.com. In September this year, CellPoint will announce the time and place for the Company's annual meeting to be held later this calendar year. CellPoint's Financial Calendar for the Next Fiscal Year Q1 2001/2002 for the quarter ending September 30, 2001 - November 15, 2001 Q2 2001/2002 for the quarter ending December, 2001 - February 14, 2002 Q3 2001/2002 for the quarter ending March 31, 2002 - May 15, 2002 Fiscal Year 2001/2002 for the year ending June 30, 2002 - Preliminary Results August 29, 2002; SEC 10KSB filing September 30, 2002 (*) EBITDA is defined as: Earnings (loss) before financial items, taxes, depreciation and amortization. CellPoint Inc. (Nasdaq and Stockholmsbörsen: CLPT, www.cellpoint.com) is a US company with subsidiary operations in Sweden, Great Britain and South Africa delivering location services in cooperation with cellular operators worldwide. CellPoint's end-to-end cellular location technology is a high-capacity system that works in unmodified GSM networks and uses standard GSM or WAP phones and standard Internet services. Several commercial applications are available for business and personal location services including Resource Managertm for mobile resource management, iMatetm for location-sensitive information and Findertm, an application for locating friends and family. For information, please contact: CellPoint Inc.: Lynn Duplessis, Tel: +44 (0)1344 624 565, lynn.duplessis@cellpoint.com CellPointtm and CellPoint Systemstm are trademarks of CellPoint Inc. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in any forward- looking statement. Investors are cautioned that such forward-looking statements involve risk and uncertainties which may cause actual results to differ from those described. Copyright © CellPoint Inc. 2001 CELLPOINT INC. and SUBSIDIARIES Consolidated Balance Sheets (Amounts in US$) June 30, June 30, 2001 2000 ASSETS Current assets: Cash and cash equivalents $687 151 $6 624 392 Accounts receivable, net of allowance for doubtful of $nil and 36,732, respectively 1 366 641 204 923 Unbilled receivables 792 443 - Prepaid expenses and other current 383 578 482 925 assets Other receivables 402 132 196 241 Inventory - 10 007 Total current assets 3 631 945 7 518 488 Long-term assets: Restricted cash 184 216 - Acquired technology net of accumulated amortization of $5,411,604 and $2,445,706 respectively 15 571 001 18 536 899 Investment in affiliated company - 500 000 Capitalized software costs and other intangible assets, net of accumulated amortization of $1,475,288 and $717,776 1 107 201 705 214 respectively Furniture, equipment and motor vehicles, net of accumulated depreciation of $380,404 and $172,600 respectively 885 780 580 458 Net assets of discontinued operations 7 533 659 58 403 717 Total long-term assets. 25 281 857 78 726 288 Total assets $28 913 802 $86 244 776 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accrued expenses and other current $1 909 066 $1 377 726 liabilities Accounts payable 2 082 257 700 961 Due to affiliate - 55 517 Current maturities of long term debt and 4 000 000 10 496 other Total current liabilities 7 991 323 2 144 700 Long term debt, net of current 7 785 510 4 000 000 maturities Total liabilities $15 776 833 $6 144 700 Minority interest 48 464 - Stockholders' equity: Common Stock ($0.001 par value; authorized - 22,000,000 shares, 10,824,503 shares and 10,465,000 shares issued and $10 824 $10 465 outstanding, respectively) Additional paid-in capital 98 692 254 95 434 348 Cumulative translation adjustment 597 478 292 866 Accumulated deficit -86 212 051 -15 637 603 Total stockholders' equity 13 088 505 80 100 076 Total liabilities and stockholders' $28 913 802 $86 244 776 equity CELLPOINT INC. and SUBSIDIARIES Consolidated Statements of Operations (Amounts in US$) Year ended June 30, June 30, 2001 2000 Revenues (*) $4 111 804 $839 003 Cost of revenues -587 281 -506 254 Gross profit 3 524 523 332 749 Selling, administrative, research & -12 049 444 -4 320 399 development expenses Professional fees -1 374 892 -1 526 806 Depreciation and amortization -3 931 215 -2 099 862 Total operating expenses -17 355 551 -7 947 067 Loss from operations -13 831 028 -7 614 318 Investment expenses: Loss on sale of investment -342 285 - Net interest (expense) -1 900 052 -37 931 Loss from continuing operations -16 073 365 -7 652 249 Discontinued operations (**) Loss from discontinued operations -10 876 197 -4 179 011 Loss on disposal of discontinued -43 624 886 - operations Minority share of income 0 0 Net Loss -70 574 448 -11 831 260 Weighted average shares outstanding 10 532 913 8 743 630 basic and diluted Net loss per share basic and diluted Continuing operations -$1,53 -$0,88 Discontinued operations -$5,17 -$0,48 Net loss per share -$6,70 -$1,35 EBITDA (***) for continuing operations -9 899 813 -5 514 456 (*) Excludes revenues from discontinued operations which totalled $956,344 and $76,475 for the years ending 30 June, 2001 and 30 June, 2000 respectively (**) Includes revenues from discontinued operations which totalled $956,344 and $76,475 for the years ending 30 June, 2001 and 30 June, 2000 respectively (***) EBITDA is defined as: Earnings (loss) before investment expenses, taxes, depreciation and amortization ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/29/20010829BIT00900/bit0001.doc Full Report http://www.waymaker.net/bitonline/2001/08/29/20010829BIT00900/bit0002.pdf Full Report