RICHMOND, BRITISH COLUMBIA--(Marketwire - Nov. 9, 2011) - DDS Wireless International Inc. (TSX:DD), a world leader in providing wireless data solutions for fleet management for more than 20 years, today reported financial results for the three and nine months ended September 30, 2011. All financial information is expressed in Canadian ("CDN") dollars and has been prepared in accordance with International Financial Reporting Standards ("IFRS"), applicable to the preparation of interim financial statements, except as otherwise noted.

DDS Wireless reported another quarter of strong growth and profitability. Revenue in Q3 2011 increased 29% to $12.5 million from the same period last year and 12% over Q2 2011. Year to date revenue was 19% higher than for the nine months ended September 30, 2010 at $33.2 million.

In addition, the Company posted a strong earnings performance with EBITDAS⁽¹⁾ in Q3 of $3.0 million or 24% of revenue and net income of $1.5 million. This brings EBITDAS⁽¹⁾ for the nine months ended September 30, 2011 to $5.0 million (15% of revenue), comparing positively to the same period last year (9% of revenue).

"I am pleased to report our 14^th consecutive quarter of year-over-year quarterly revenue increases, demonstrating sustained growth," stated Vari Ghai, CEO of DDS Wireless. "Our reported revenues of $12.5 million represent a record level of Q3 revenues for DDS Wireless, and of equal importance is the strong earnings performance of $0.11 per share." Mr. Ghai added, "The investment we made earlier in the year in additional sales and marketing personnel is beginning to pay dividends in the very strong revenue growth in all areas but especially in enterprise solutions, largely in the North American and European Taxi business unit."

Q3 2011 Operational Highlights

• The Company's enterprise solutions revenue grew by 65% over Q3 of 2010. The Company continues to see significant opportunities to upgrade both existing and new customers to the Company's latest generation technologies.
• The Company maintained a focus of developing recurring revenue with eFleet™ and Taxibook™ subscription offerings, amongst others, and signed a total of $1.0 million of subscription contracts in the quarter. Activations in the year for both eFleet™ and Taxibook™ subscription services now total 1,176.
• Recurring revenue was fairly consistent in the third quarter and second quarter but, due to the significant shift in the revenue mix, dropped as a percentage of total revenue to 47%. For the nine months ended September 30, 2011, recurring revenues increased $0.4 million and remain over half of our total revenues for the fiscal year to date.

Non-GAAP Measures

The following and preceding discussion of financial results includes reference to EBITDAS and Adjusted Gross Margin. EBITDAS is a non-GAAP financial measure which the Company defines as Earnings before interest, taxes, depreciation, amortization and share-based compensation expenses. The measure is provided as a proxy for the cash earnings of the business as net income for the Company includes a significant amount of non-cash amortization expense primarily related to acquisitions completed in prior years. Adjusted Gross Margin excludes amortization expense and share-based compensation expenses. The measure is provided as gross margin includes significant amortization expense related to acquired intangibles which management believes may affect the comparability of gross margin. Please refer to the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2011 for a reconciliation of non-GAAP measures to reported financial results.

Summary of Financial Results for the Three Months Ended September 30, 2011

The financial results discussed in this press release have been prepared in accordance with IFRS standards applicable to the preparation of interim financial information as required for all publicly traded companies in Canada in 2011. Readers should note that comparative figures in this press release and the Company's financial statements and MD&A have been restated to reflect IFRS. Only in certain cases has discussion been provided in this press release about the changes resulting from changeover to IFRS. Please refer to the Company's consolidated interim financial statements for the three and nine months ended September 30, 2011 for a detailed explanation of the changeover to IFRS.

Statement of Operations

Revenues for the three months ended September 30, 2011 were $12.5 million, an increase of $2.8 million or 29% over the same period in the prior year. This increase is primarily attributed to growth in enterprise solutions revenues in the Taxi business unit offset by a decline in the same revenue stream in the Transit business unit.

Of the Company's $12.5 million in revenues for the three month period ended September 30, 2011, 33% were denominated in US dollars (47% for the three months ended September 30, 2010) and 57% were denominated in Euros (41% for the three months ended September 30, 2010). The increase in the proportion of Euro denominated revenues is attributable to a significant increase in deliveries and deployments under enterprise solutions contracts in the Company's European taxi business.

Revenues from markets outside of Canada accounted for 93% of total revenues for the three months ended September 30, 2011 compared to 90% in the same period in the prior year.

The gross margin percentage for the three months ended September 30, 2011 increased to 49% compared to 47% for the three months ended September 30, 2010. This increase is primarily attributed to higher margins earned on enterprise solutions revenue in the Company's European and North American taxi business further accentuated by the change in the revenue mix to enterprise solutions. On transition to IFRS, amortization relating to certain intangible assets has been reclassified to cost of sales, resulting in a decrease in gross margins from previously reported results. Adjusted gross margin percentage (a non-GAAP measure as defined above) for the three months ended September 30, 2011 was 53%, compared to 55% for the three months ended September 30, 2010.

Total operating expenses for the three months ended September 30, 2011 were $4.1 million, an increase of $0.1 million over the prior year comparable period. The increase over the prior year comparable period is primarily related to the addition of sales and marketing personnel, sales and marketing program expenditures, and an increase in bad debts experienced during the period, offset in part by temporary reallocation of research and development staff into cost of sales and seasonal fluctuations in staffing costs.

Income from operating activities for the three months ended September 30, 2011 was $2.0 million, compared to $0.6 million for the same period in the prior year. The increase in income from operating activities is attributable to an increase in gross margins.

Income tax expense for the three months ended September 30, 2011 was $0.9 million compared to $0.1 million for the three months ended September 30, 2010. The increase in tax expense for the period in 2011 is a result of higher Canadian profits. Please refer to the Company's Management Discussion and Analysis for further details.

Financial Position as at September 30, 2011

The Company's net working capital increased to $13.6 million at September 30, 2011 from $9.7 million at December 31, 2010. The Company has line of credit facilities totaling $4.2 million and as at September 30, 2011, the Company had no balance drawn on its credit facilities and $6.0 million in cash. This compares to $4.2 million in cash and no balance drawn on its lines of credit at December 31, 2010, and $1.5 million in cash and no balance drawn on its lines of credit at September 30, 2010. As at the date of this release, the Company was not drawn on its line of credit.

Outlook

Based on our current backlog and outlook for 2011, we are maintaining our guidance for growth in revenues to greater than $45 million for the year ending December 31, 2011. Actual revenues may vary significantly from guidance given prevailing economic conditions, foreign exchange and other factors.

Conference Call

The Company will host a conference call at 4:30 PM Eastern time today to discuss the financial results. Please call 416-340-9432 / 800-340-9655 to participate in the call. A replay of this conference call will be available through November 18, 2011 by dialing 905-694-9451 / 800-408-3053 and entering access code 6123142.

About DDS Wireless International Inc.

DDS Wireless International Inc. is a global leader in providing application software for multiple vertical markets within the transportation industry. The Company specializes in transit routing and scheduling, real-time dispatching, vehicle location and tracking software applications, communications infrastructure as well as in-vehicle wireless devices. DDS Wireless operates four businesses dedicated to transit, taxi, limousines and work truck, and wireless devices and communication infrastructure. The Company supports its customers worldwide through its offices in Canada, Finland, India, Singapore, Sweden, U.K. and U.S.A.

Forward-Looking Statements

This press release may contain forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, operations, anticipated financial performance, business prospects and strategies, statements about future market conditions, supply and demand conditions, revenues, gross margins, operating expenses, profits, and other expectations, intentions, and plans contained in this press release that are not historical facts. Such forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors which could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, business risks, changes in market and competition, technological and competitive developments and potential downturns in economic conditions generally. Given these risks and uncertainties DDS Wireless cannot guarantee that any forward looking statements will be realized.

SEE ATTACHED SUMMARY FINANCIAL STATEMENTS

DDS WIRELESS INTERNATIONAL INC.
Consolidated Statements of Operations (Unaudited)
(In thousands of Canadian dollars, except per share amounts)

DDS WIRELESS INTERNATIONAL INC.
Consolidated Balance Sheets (Unaudited)
(In thousands of Canadian dollars)

DDS WIRELESS INTERNATIONAL INC.
Note to the Consolidated Statements of Operations (Unaudited)
(In thousands of Canadian dollars)

1. Cost of sales and operating expenses:

Contributing Sources

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