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Telular Announces the Acquisition of the SMARTank Line of Business from SMARTLogix, Inc. a" TankLinka?s Largest Value Added Res

^{Published on 2011-01-10 03:41:26 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Telular Corporation (NASDAQ: WRLS):

"This will allow us to earn higher recurring revenue and operating cash flow margins while we will continue to enjoy our relationship with SMARTLogix and its ability to utilize its deep, petroleum industry experience to attract customers to SMARTank services."

- Asset Acquisition Represents a Step-Up in the Value Chain for TankLink

- Immediately Accretive and Expected to Add an Annualized $1.4 Million of Net Income before Non-Cash Items

- Telular Increases Full Year 2011 Guidance

Telular Corporation (NASDAQ: WRLS), a leader in alarm and event monitoring solutions and services, today announced the acquisition of assets underlying the SMARTank line of business of SMARTLogix, Inc., the largest value added reseller of TankLink tank monitoring solutions.

As a result of this transaction, TankLink has acquired a direct relationship with over 400 end-user customers representing nearly 16,000 of its previously existing billable tanks from SMARTLogix. Having these direct customer relationships will allow TankLink to realize incremental revenue, as warranted by a retail service provider as compared to the wholesale revenue it previously received. SMARTLogix and its experienced sales force will continue to exclusively represent the SMARTank line of business to petroleum products distributors under a sales agency agreement executed with TankLink, coincident with the acquisition. As a result, SMARTLogix will continue to sell TankLinka™s monitoring services in conjunction with its own proprietary SMARTruck line of business, resulting in a complete supply chain optimization solution for fuel and lubricant distributors in the petroleum space.

Terms of the transaction include a purchase price of $6.0 million and the opportunity for SMARTLogix to earn up to an additional $2.4 million based on performance measures over the next two years. Telular will pay the $6.0 million initial purchase price with $1.5 million in cash and through the conversion of an existing receivable. On an annualized basis, Telular estimates that SMARTank will contribute an additional $2.6 million of revenue and $1.4 million of net income before non-cash items to its consolidated financial results.

aI am very excited about the acquisition of SMARTank as it puts us in a direct relationship with a majority of TankLinka™s current end users,a said Joseph Beatty, president and chief executive officer of Telular Corporation. aThis will allow us to earn higher recurring revenue and operating cash flow margins while we will continue to enjoy our relationship with SMARTLogix and its ability to utilize its deep, petroleum industry experience to attract customers to SMARTank services.a

aTelulara™s acquisition of SMARTank is an ideal way for us to focus our development activities on SMARTruck, while maintaining our ability to sell a complete logistics solution to fuel and lube distributors,a said Rick Martin, founder and CEO of SMARTLogix, Inc.

In conjunction with the asset acquisition announcement today, Telular is also issuing updated and increased financial guidance for fiscal 2011.

aWe had originally projected net income before non-cash items to total $8.0 - $9.0 million in fiscal 2011,a said Jonathan Charak, CFO of Telular. aBased on the partial year contribution from the SMARTank acquisition, offset by cash compensation expenses associated with our recent special dividend declaration, Telular is increasing guidance on fiscal 2011 net income before non-cash items to total $8.5 a" $9.5 million.a

About Telular

Telular Corporation provides event monitoring and wireless access solutions for business and residential customers, enabling security systems and other industrial applications to utilize wireless technology. With over 20 years of experience in the wireless industry, Telular Corporation has developed solutions to deliver remote access for voice and data without significant network investment or disruption. Headquartered in Chicago, Telular Corporation has additional offices in Atlanta and Miami. For more information, please visit [ www.telular.com ].

Please be advised that some of the information in this release presents the Companya™s intentions, beliefs, judgments and expectations of the future and are forward-looking statements. It is important to note that the Companya™s actual results could differ materially from these forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Companya™s SEC filings, including but not limited to the Companya™s report on Form 10-K for the fiscal year ended September 30, 2007 Copies of these filings may be obtained by contacting the Company or the SEC.