WOODLAND PARK, NJ — (Marketwired) — 08/11/15 — Pacific DataVision, Inc., d/b/a pdvWireless (NASDAQ: PDVW) (the “Company”), a leading provider of mobile workforce management solutions, reported today its first fiscal quarter results for the period ended June 30, 2015.
Revenue for the quarter ended June 30, 2015 was $841,000 compared with $831,000 for the quarter ended June 30, 2014. For the first quarter, the Company reported a net loss of ($4.35 million), or ($0.32) per share, compared with a net loss of ($2.59 million), or ($0.92) per share, the previous year.
Because the Company is currently in the process of deploying its advanced digital dispatch networks, the Company–s revenues for the first quarter of FY 2016 principally represent its historical software as-a-service (“SAAS”) business. The operating results, however, also include costs and expenses related to implementing the Company–s digital dispatch networks, the costs associated with its initiatives to implement its broadband spectrum strategies and the costs incurred to raise funds to support its business initiatives.
The increase in revenues for the quarter is principally a result of spectrum leasing revenue, which began in September 2014, partially offset by a reduction in revenue resulting from higher customer churn in the Company–s SAAS business. The functionality and solutions developed for the SAAS business are included in the Company–s new DispatchPlus service offering.
General and administrative expenses for the three months ended June 30, 2015 increased by $1.30 million, or 53.6%, to $3.72 million from $2.42 million for three months ended June 30, 2014. These amounts include stock compensation in connection with the financing transactions and awards to employees in the fiscal quarter ended June 30, 2015 and 2014 in the amount of $1.35 million and $2.10 million, respectively. The increase in the June 30, 2015 quarter–s general and administrative expenses is primarily due to an increase in headcount and related costs in order to support the Company–s business initiatives.
Adjusted EBITDA for the quarter was a negative ($2.95 million) as compared with a negative ($0.28 million) the prior year. The increase in Adjusted EBITDA losses in the first quarter was caused by higher selling, general and administrative costs as the Company incurred costs to support and implement its business initiatives and to a lesser degree, the effect of the decrease in gross margin of the Company–s SAAS business resulting from the decline in revenues noted above.
John C. Pescatore, President and CEO of pdvWireless, said, “Our recent results continue to reflect the Company–s forward momentum toward achieving its business imperatives on all fronts. By getting through the second phase of the rule making process, the FCC now has a more complete record of the issues. We remain confident that, by working with the incumbents at 900 MHz, we can and will address the issues raised as the rulemaking process moves forward.”
He added “In the near term, the success of our DispatchPlus launch in Houston along with the activity in other markets such as Dallas, Philadelphia and Atlanta, has given us confidence that the estimates of capital required for the buildout of our market areas are in line with the results achieved to date. In addition, although it is very early in the market development process from a sales perspective, we are pleased with the initial feedback from dealers, prospects and customers. It is important to note that we are seeing activity and interest in our targeted business verticals, such as transportation, distribution and construction.”
The Company has a strong cash position, with $175.9 million in available cash as of June 30, 2015. In the first fiscal quarter ended June 30, 2015, the Company spent approximately $1.4 million for the acquisition of equipment, design, and buildout of its networks.
The Company–s cash position was enhanced during the first quarter by the $64.8 million in net proceeds it received from the follow-on public offering of its common stock in May 2015. The Company plans to use a major portion of the net proceeds to pursue its regulatory initiatives and broadband strategy, including purchasing additional spectrum. The remainder of the net proceeds from this recent public offering will be used for general corporate purposes, which may include the acquisition of complementary products, technologies, business or assets.
In May 2015, the Company and the Enterprise Wireless Alliance (EWA) filed proposed rules with the FCC related to their Joint Petition for Rulemaking, which outline recommended procedural and technical operating parameters and processes related to the administration and sequence of the proposed realignment of the 900 MHz band. The proposed rules were placed on Public Notice by the FCC and the comment and reply comment cycle each have been completed. The petition for realignment of the band is aimed at making more efficient use of the Company–s spectrum, and providing customers with more choices by giving the Company the flexibility to deploy more robust, broadband technologies in the future.
DispatchPlus is a next-generation push-to-talk solution utilizing state-of-the-art digital two-way radio technology integrated with pdvWireless– proprietary cloud-based mobile resource management solutions, including workforce tracking, status mapping and the Company–s patented intelligent call prioritization. DispatchPlus enables communications to be sent, simultaneously, to one or many recipients, whether the recipient(s) is on pdvWireless– two-way service, a cellphone or at any email address. At the end of the first quarter, the Company announced the commercial launch of its first DispatchPlus two-way radio service in the greater Houston, Texas metropolitan area and had sites in service by the end of June 2015 in three additional metropolitan market areas, Dallas, Atlanta, and Philadelphia. The Company is currently in the market development process during which it will be ramping up its distribution channels, customer acquisition process and developing appropriate sales and marketing programs.
pdvWireless will host a conference call to discuss its first quarter 2016 financial results on August 11, 2015 at 5:00 p.m. EDT. Investors in the United States can participate in the earnings call by dialing into the conference line at 888-267-2860 or 973-413-6102 and using the conference code 774894. The earnings call will also be available for replay until August 25, 2015 and can be accessed by dialing into the conference lines at 800-332-6854 or 973-528-0005 and using the conference code 774894. The replay will also be posted on the Company–s website under Investors at .
Pacific DataVision, Inc., d/b/a pdvWireless, is a recognized leader in mobile workforce communications and location based solutions that increase the productivity of field-based workers and the efficiency of their dispatch and call center operations. pdvWireless has commenced launching the nation–s largest private push-to-talk network in major markets throughout the United States. Its patented and industry-validated technology improves team communication and field documentation across a wide array of industries including transportation, distribution, construction, hospitality, waste management and field service. pdvWireless–s Chairman, Brian McAuley and Vice Chairman, Morgan O–Brien, were co-founders of Nextel Communications and have over 60 years of combined experience in two-way radio operations and FCC regulatory matters. Pacific DataVision, Inc. is headquartered in Northern New Jersey.
This press release and the information contained herein present a non-GAAP financial measure, Adjusted EBITDA, which excludes certain amounts. The Company defines Adjusted EBITDA as net income (loss) with adjustments for depreciation and amortization, interest income (expense)-net, income taxes and stock-based compensation. The Company has included below unaudited adjusted financial information for the three months ended June 30, 2015 and 2014, which includes a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA. The Company–s management uses Adjusted EBITDA to evaluate the Company–s performance and provides this financial measure to investors as a supplement to the Company–s reported results because management believes this information provides additional insight into the Company–s operating performance by disregarding certain nonrecurring items or items that are not reflective of the day-to-day offering of its services. Adjusted EBITDA should not be considered in isolation, as a substitute for, or as superior to, financial measures calculated in accordance with GAAP, and the Company–s financial results calculated in accordance with GAAP and any reconciliation to those financial statements should be carefully evaluated. The non-GAAP financial measure used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Any statements contained in this press release that do not describe historical facts are forward-looking statements (as defined under Federal securities laws). Forward-looking statements generally are accompanied by words such as “will”, “expect”, “intend”, “plan”, “outlook” or other similar words, phrases or expressions. These forward-looking statements include statements regarding the planned timing and scope of the Company–s deployment of its dispatch network, the estimated costs of deploying its dispatch network, and its regulatory initiatives and plans. Any forward-looking statements contained herein are based on our current expectations, but are subject to a number of risks and uncertainties that could cause our actual future results to differ materially from our current expectations or implied by any forward-looking statements. These risks and uncertainties include, but are not limited to: we have no operating history with respect to our proposed push-to-talk business; we have had net losses each year since our inception and may not achieve or maintain profitability in the future; we may experience delays in launching our nationwide network; customers may not adopt our technology; any efforts we pursue to increase the value of our spectrum may not be successful; we will rely on the equipment and selling efforts of other parties, such as indirect dealers; the wireless communication industry is highly competitive and we may not compete successfully; and government regulation could adversely affect our business and prospects. These and other factors that may affect our future results or operations are identified and described in more detail in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on June 10, 2015 and our quarterly report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 11, 2015. You should not place undue reliance on these forward-looking statements, which speak only as of the date that they were made. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events.
Timothy Gray
CFO
Pacific DataVision, Inc.
973-771-0981
Adam Friedman
Principal
Adam Friedman Associates
917-675-6250
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