Financial Review
All amounts in this news release are in United States dollars unless otherwise noted.
For 2008, Intermap™ reported a 10% increase in total revenue to $37.0 million, as compared to $33.8 million in 2007.
Multi-client data license (“MCDL”) revenue increased 94% to $10.8 million, compared to $5.6 million in 2007. The increase resulted from an increased availability of data from the NEXTMap USA, Europe, and Asia databases. In 2008, approximately 70% of MCDL license revenue was associated with the NEXTMap USA program, 17% was associated with the NEXTMap Europe program, and 13% was associated with the Asia dataset. In comparison, in 2007 approximately 80% of the MCDL license revenue was associated with the NEXTMap USA program, 14% was associated with the NEXTMap Europe program, and 6% was associated with the Asia dataset.
Intermap’s contract services revenue component was $26.2 million compared to $28.2 million in 2007. Contract services revenue for 2008 contained several contracts received during the year for mapping projects in Asia totaling over $24.7 million.
At year-end, there remained $7.8 million in revenue to be recognized on contracts accounted for on a percentage of completion basis. Revenue on these contracts is recognized based on the ratio of costs incurred to estimated final costs required to fulfill the terms of such contracts. Of the $7.8 million of revenue expected to be recognized in future periods, $5.0 million relates to contract services work with the balance relating to MCDL licensing.
“As more of our NEXTMap data in Europe and the USA came available during the year, we were able to nearly double our MCDL revenues year-over-year,” stated Brian Bullock, president & CEO of Intermap Technologies. “Since its inception, total revenue from NEXTMap licensing has reached $45 million. With Western Europe and the USA nearing full commercial availability, management sees customer opportunities continuing to increase. We remain on target to complete NEXTMap Europe near the end of the first quarter of 2009. Our NEXTMap USA program currently has data available representing 35 states, including complete datasets of California, Florida, Hawaii, Mississippi, and Oklahoma. At the end of the year we completed the airborne collection of approximately 7.96 million square kilometers, or 99% of the entire NEXTMap USA program. We expect to have the collection portion of the program completed by the end of the first quarter of 2009, with the entire country available for sale during the first quarter of 2010.”
To date, the total capital invested by Intermap into building the NEXTMap datasets is approximately $90 million. Cash on hand at the end of 2008, combined with cash generated from the ongoing licensing of Intermap’s datasets, is expected to be adequate to fund the completion of the NEXTMap initiatives.
Operations expense for the year ended December 31, 2008 totaled $8.2 million compared to $11.6 million for 2007. The $3.4 million decrease was primarily the result of reduced aircraft hours flown on contract services work in 2008. Approximately 207,000 square kilometers of data was collected for contract services work during 2008, compared to 483,000 square kilometers during 2007.
Sales, general and administrative (“SG&A”) expense for 2008 was $25.9 million compared to $21.0 million for 2007. The increase resulted primarily from an increase in the costs of personnel in business development (including automotive), recreational-map-enabled GPS/PND applications, insurance risk assessment initiatives, sales, and marketing associated with the MCDL. Gross SG&A expense for the period ended December 31, 2008 and 2007, prior to capitalization, was $28.6 million and $23.0 million, respectively.
Adjusted EBITDA, a non-GAAP measure, for the year ended December 31, 2008 showed a significant improvement to a positive $1.3 million, as compared to a loss of $0.3 million for the same period in 2007. This improvement in EBITDA was driven by an increase in overall revenue, which was partially offset by an increase in non depreciation and amortization related operating expenses. The term EBITDA consists of net income (loss) plus interest, taxes, depreciation, and amortization. Adjusted EBITDA excludes gain (loss) on foreign currency translation, charges related to the disposal of assets, and stock based compensation expense. Adjusted EBITDA is included as a supplemental disclosure because management believes that such measurement provides useful information regarding the Company’s financial performance and will increase in importance as investors focus on cash flow in future periods.
Amortization expense of the MCDL database for the year increased to $6.8 million from $4.5 million for 2007. The increase was primarily due to increased revenue associated with the NEXTMap initiatives and an increase in the size of the underlying NEXTMap datasets.
For 2008, Intermap reported a net loss of $13.9 million, or ($0.30) per share, compared to a net loss of $8.9 million, or ($0.22) per share for 2007.
Fourth Quarter Results
