All amounts in this news release are in United States dollars unless otherwise noted.
In 2014, Intermap's focus was on the continued development of its Orion Platform®, coupled with operational preparation to support anticipated Spatial Data Infrastructure ("SDI") contract(s). The Company's Orion Platform and its SDI capabilities were designed to derive answers for customers and provide recurring revenue streams for the Company.
"The year 2014 was a year of investment in Intermap's future. We continued to make major advancements in our platform software capabilities, our NEXTMap database, and in our professional services competencies," said Todd Oseth, President & CEO of Intermap. "This investment positions the Company well for the coming year to deliver on the Orion Platform promise we made to our customers. We are currently pursuing large SDI projects which have initial delivery periods of at least two years, and are designed to generate recurring revenue streams for years to follow. We believe the Company's internal investment during 2014 was necessary to position the Company for success in these areas."
Mr. Oseth continued, "In 2014, Intermap introduced its InsitePro™ software application, which is focused on the property insurance market. During the course of the year, the InsitePro product team talked to over 40 primary insurers, resulting in significant insight into the needs of property insurers and the competitive landscape. The combination of Intermap's high-quality terrain data and European insurance experience, provides a compelling basis to drive the further development of InsitePro. No competitor has access to comparable data assets and flood insurance underwriters recognize this value." Mr. Oseth added, "The ongoing development of Intermap's Orion Platform presents a way for InsitePro to become a complete underwriting solution for large insurance carriers, including some of the world's largest multi-nationals. InsitePro's first customer was Swiss Re, delivering flood underwriting software for use in Brazil. As InsitePro enters 2015, we remain confident in the business potential as we continue to add new functionality and integrate new datasets into the software."
Orion Platform: The Orion Platform was developed to provide an integrated platform, delivering customized and scalable geospatial solutions, powered from five layers of products and services as follows:
- 3DBI: Software applications designed to help professionals make better location-based decisions without the need for expensive and complicated GIS software.
- Infrastructure: Network-based software delivered in both platform as a service ("PaaS") and traditional licenses.
- Foundation Data Layer: Seamless, off-the-shelf, high resolution elevation and image data.
- Fusion Services: Integration of geospatial and location-based content into one homogeneous, consistent database using the Company's proprietary fusion processes and tools.
- Geospatial Services: Helps a customer define their overall geospatial enterprise problem. The services also include custom data collections using a variety of sensor types (i.e. radar, LiDAR, satellite, aerial photography, etc.).
SDI: An SDI is the combination of several components, all working together, to allow people across governments, organizations, and the general public to analyze and share spatial data and solutions. The key components of an SDI include technology, policies, people, processes, and resources – collectively working together in acquiring, processing and delivering location-based intelligence answers. When designed and implemented well, an SDI can facilitate economic development, infrastructure growth, security, and safety to a nation. Further to this, an SDI can drive the creation of a comprehensive national base map and an integrated geospatial data operating environment.
The Company believes that an SDI can be essential to the successful completion of major infrastructure projects and economic growth in developing nations, and can enable projects such as fiber optic telecommunications lines; expansion of hydroelectric power and build out of the power grid; planning and building of new roads and railroads; expansion of mining and hydrocarbon exploration; national security; tax revenue growth; and protection of the environment.
An SDI project can support governments with the creation of a comprehensive, three dimensional (3D) digital infrastructure that can be used to model and plan for a number of infrastructure, economic, and catastrophic circumstances. An SDI can enable multiple government and commercial uses, and can provide actionable economic related decisions in the areas of natural resources exploration (agriculture, forestry, hydroelectricity, mining, oil and gas), environment, education, transportation, communications, health, and security.
An SDI can also provide the analysis and dissemination of information for government agencies to proactively respond to identified needs of major development projects. A strong SDI originates with a foundation of accurate digital geospatial layers, real-time analytics, and location-based answers.
Financial Review
"For the year 2014, Intermap was between major governmental contracts, which is the primary reason for the decreased operational performance during the year. However, our identified sales opportunities continue to grow, driven primarily by the risk management needs of our customers, as well as several SDI opportunities internationally," said Mr. Oseth. "It is important to remember that our SDI business carries with it significant revenue and operational variations on a quarter-to-quarter, and annual basis, as we saw during 2014. We are working to close new Orion Platform based SDI contracts in the coming months from our growing list of identified opportunities, which are expected to improve the future financial results of the Company. Unfortunately, some of our larger opportunities have been delayed for varying reasons including lengthened approval cycles and for political reasons within the regions of interest where the opportunities exist."
For the fourth quarter 2014, Intermap reported total revenue of $1.1 million, compared to $4.1 million last year. Mapping services revenue in the fourth quarter was NIL, compared to $1.0 million last year. Data licensing revenue was $0.5 million, compared to $1.7 million last year. Software revenue was slightly lower at $0.5 million, compared to $0.6 million last year. And finally, professional services revenue was $0.1 million, compared to $0.8 million last year. As of December 31, 2014 there remained $0.5 million in backlog contracts to be recognized in future periods.
For the fourth quarter 2014 and 2013, personnel expense was $3.0 million and $2.9 million, respectively. Headcount decreased slightly on a year-over-year basis, but the associated costs were offset by a change in the mix of personnel.
For the fourth quarter 2014, purchased services and materials expense was $1.0 million, a 54% decrease from $2.1 million last year. The decrease was primarily due to decreases in mapping services work during the period. Purchased services and materials includes (i) aircraft related costs (ii) professional and consulting costs (iii) third-party support services related to the collection, processing and editing of the Company's airborne data collection activities, and (iv) software expenses (including maintenance and support). For the fourth quarter 2014, travel expense was $0.2 million , flat with last year, and facilities and other expenses was $0.5 million , equivalent to last year.
