CellPoint Reports Fiscal Year-End Results

CellPoint Reports Fiscal Year-End Results Revenue from Continuing Operations Increases 390% to $4.1 Million; Liquidation of Telematics Subsidiary Streamlines Focus on Mobile Location Services Industry LONDON, October 16, 2001-- CellPoint Inc. (Nasdaq: CLPT, SSE: CLPT), a global provider of mobile location software technology and platforms, today announced financial results for the fiscal year ended June 30, 2001. The previously announced liquidation of the company's telematics subsidiary, Unwire, requires CellPoint to disclose results of its telematics operations as 'discontinued operations' in accordance with U.S. Generally Accepted Accounting Principles*. Results from Continuing Operations Revenue for the location services business segment, 'continuing operations,' climbed to $4.1 million in the fiscal year compared to $0.83 million in the previous fiscal year. EBITDA (earnings before investment expenses, taxes, depreciation and amortization) from continuing operations was a loss of $10.33 million for the fiscal year, compared to a loss of $5.51 million in the previous fiscal year. 97% of all revenue in the year came from the European marketplace. The gross profit margin increased to 85.7% from 39.7% in fiscal 2000. CellPoint expects the margins to remain high in the coming years since its focus is on selling software licenses for location platforms. Peter Henricsson, CellPoint Chairman and Chief Executive Officer, said, "We are pleased to report revenue growth of 390% from the location services business this past fiscal year despite difficult market conditions and subsequent order delays. This past fiscal year, CellPoint made substantial progress expanding operations to achieve commercialization of its location services technology, developed a new generation of software platforms for location-based services and increased marketing activities to create a more global awareness. In addition, we were successful in launching strategies to reduce overall operating costs." Operating expenses from continuing operations were $17.78 million, of which $3.93 million was depreciation and amortization. In the previous fiscal year, operating expenses from continued operations were $8.46 million, of which $2.61 million was depreciation and amortization. Selling, general and administrative expenses for continuing operations were $8.27 million; research and development expenses were $4.21 million, totaling $12.48 million for the year compared to $4.32 million in the previous fiscal year. The company incurred a loss from continuing operations of $16.5 million compared to a loss of $8.16 million in the previous year. "In July, we announced a three-pronged strategy to be cash-flow positive by current fiscal year end. The execution of this plan included the buyout and restructuring of the convertible notes from Castle Creek Technology Partners, direct private placements to date of US$6.6 million to buy down the notes and raise additional working capital, and the liquidation of our telematics subsidiary, Unwire. We are also further streamlining our operations focusing on location platforms and enabling services and are liquidating our South African subsidiary and concentrating our development and implementation resources in Sweden. We are now poised for sustained growth as we focus on implementing our product offerings for state-of-the-art location services. We have lowered the cost structure and will continue to manage operating costs without reducing our commitment to continued development and sales of our location platforms," Henricsson said. As part of the restructuring, the company has improved the balance sheet by writing off all goodwill from the Unwire purchase and is now left with $15.57 million in total goodwill which will improve the results per share going forward. The company has debts of $11.79 million, of which none is short-term debt. "We are expecting demand to build in the coming quarters secured by mobile operators' needs globally to increase average revenue per user (ARPU). Our Mobile Location System (MLS) platform addresses those needs with a seamless, network-wide location solution enabling operators or application providers to deliver expanded mobile offerings for future generations. CellPoint's MLS works across today's 2G networks (current GSM worldwide), 2.5G (GPRS) and 3G/UMTS. CellPoint is prepared to increase market penetration significantly and capitalize on the multi- billion dollar mobile location services industry," added Henricsson. Highlights Fiscal Year 2000 - 2001 · Company begins trading on the Nasdaq National Market · Signs commercial agreement with EuroTel Praha Ltd. for GSM location services · Signs agreement with E-Plus to deliver world's first commercial network-based location services for German mobile operator · Gains secondary listing in Europe and begins trading on the Stockholm OM Exchange, now called Stockholmsbörsen · Launches MLS - world's first network-based location platform enabling location services for every subscriber in any GSM network · CellPoint joins Location Interoperability Forum (LIF); CellPoint Chairs Mobile Location Protocol group · AirFlash and CellPoint join forces to offer integrated end-to-end location-based services Highlights since July 1 · KPN Group, CellPoint and E-Plus sign Group License Frame Agreement for Mobile Location Systems with terms negotiated for operators within the KPN Group · SiRF and CellPoint to integrate A-GPS into CellPoint's MLS platform to provide GSM/3G operators with enhanced Anytime, Anywhere Location Information Platform · Location Developers' Zone launched, more than 400 developers on line - LDZ facilitates third-party development of applications and services targeted to CellPoint's mobile location platforms · First closings of follow-on funding reach US$6.6 million; convertible notes restructured to $4.00 fixed convertible on remaining $6.1 million principal The Annual Stockholders' Meeting will be held on December 5, 2001 in Stockholm, Sweden. Stockholders of record at the close of business on October 19, 2001 shall be entitled to receive full details in the notice of, and to vote at, the annual meeting. The company noted that, as a result of its restructuring efforts, it has postponed its conference call until the end of the first quarter and has prepared a written question and answer session with management which can be viewed on CellPoint's website at www.cellpt.com/pdf/10KSB2001.PDF The company's full report filed with the SEC on Form 10KSB can be viewed at www.freeedgar.com *US GAAP Reporting for Discontinued Operations The decision made in the fourth quarter of fiscal 2001 to focus on the location services business 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'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. CellPoint Inc. (Nasdaq: CLPT, SSE: CLPT, www.cellpoint.com) is a U.S. company with subsidiary operations in Sweden and Great Britain delivering mobile location technology platforms and enabling 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. # # # 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. For information, please contact: CellPoint Inc.: Lynn Duplessis, Tel: +44 (0)1344 624 565 info@cellpoint.com; www.cellpoint.com KCSA Public Relations Worldwide: Sarah Shepard / Michael Cimini (212) 896-1236 / (212) 896-1233 sshepard@kcsa.com / mcimini@kcsa.com Copyright © CellPoint Inc. 2001 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00100/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00100/bit0001.pdf The full report