Telular Corporation Reports Third Quarter 2009 Results

- Company Reports Strong Sequential Telguard Revenue Growth of 16%

- Company Raises Telguard Unit Sales Quarter Guidance From 20,000-25,000 to 30,000-35,000 Per Quarter

- Solid Recurring Revenue Stream Represents 47% of Total Revenue

Telular Corporation, a global leader in connecting businesses and machines over wireless networks, today announced financial results for the third quarter ended June 30, 2009. In the third quarter, Telular grew revenues sequentially to $12.4 million and reported income from continuing operations of $596,000 or $0.03 per diluted share and net income of $0.00 per diluted share.

For the third quarter of 2009, income from continuing operations before non-cash items was $1.1 million. Income from continuing operations before non-cash items is a non-GAAP measure which adds back depreciation, amortization and stock-based compensation expense to income from continuing operations. For further information, please see the reconciliation of this measure to income from continuing operations in accordance with GAAP, on the last page of this press release.

In the third quarter of 2009, Telguard product revenues increased sequentially approximately 30% to $4.9 million from $3.8 million. Telguard service revenues increased sequentially to $5.4 million and were up approximately 20% from the prior year period. In the third quarter of 2009, Telular sold approximately 34,000 Telguard units and activated approximately 28,000 new Telguard subscribers. Telular had approximately 469,000 Telguard subscribers at quarter end. TankLink and Terminal product sales were $1.7 million in the third quarter of 2009.

During the quarter, the Company completed a modified "Dutch Auction" tender offer through which it accepted for purchase 2,344,857 shares of its common stock, representing approximately 14% of Telular's outstanding shares of common stock as of the closing date of the transaction.

Since instituting stock repurchase activities in July 2008, the Company has repurchased 4.5 million shares of its common stock, or approximately 23% of Telular's outstanding shares of common stock immediately prior to the repurchase activities. Under its previously authorized share buyback program, the Company still has an additional $1.2 million available to repurchase shares on the open market. Telular ended the period with cash and cash equivalents of $18.2 million.

"We are pleased with our continued revenue growth, fueled by strong Telguard product sales and an accelerating stream of Telguard service revenue," commented Joe Beatty, president and chief executive officer of Telular Corporation. "Due to strong demand and the rising trend towards wireless as the primary communications path in security applications, we are raising our Telguard unit sales expectation to range between 30,000 to 35,000 per quarter versus our prior expectation of 20,000 to 25,000 per quarter.

"In the third quarter, we demonstrated strong operational efficiency by continuing to lower expenses, posting profitability from operations and maintaining a strong balance sheet. Additionally, we were pleased with the results of our Dutch Auction, which we believe was a prudent use of cash and an attractive investment for the Company. We remain committed to maximizing shareholder value," concluded Mr. Beatty.

Investor Conference Call

Telular's quarterly conference call will be held today at 4:30 p.m. Eastern Time. To participate on the teleconference from the United States and Canada dial 877-941-4774 (International dial 480-629-9760). You may also monitor the call via webcast at www.telular.com (select Earnings Conference Calls in Investor Relations). A replay of the call will be available from Thursday, August 6, 2009 beginning at 6:30 p.m. ET through Saturday, August 8, 2009 ending at 11:59 p.m. ET by dialing 800-406-7325 (enter pass code 4120939#) or internationally at 303-590-3030 (enter pass code 4120939#).

About Telular

Telular Corporation provides event monitoring and wireless access solutions for business and residential customers, enabling devices such as phones, faxes, computers and commercial machinery to be connected using 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 Company's intentions, beliefs, judgments and expectations of the future and are forward-looking statements. It is important to note that the Company'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 Company's SEC filings, including but not limited to the Company's report on Form 10-K for the fiscal year ended September 30, 2008 Copies of these filings may be obtained by contacting the Company or the SEC.

TELULAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AND STATEMENTS OF CASH FLOWS
(Dollars in thousands, except share data)
BALANCE SHEETS
                                                                 June 30,            September 30,
                                                                 2009                2008
                                                                 (Unaudited)
ASSETS
          Cash and cash equivalents                              $   18,201          $    21,168
          Trade receivables, net                                     7,208                6,904
          Inventories, net                                           8,111                10,007
          Prepaid expenses and other current assets                  530                  1,023
          Assets of discontinued operations                          396                  4,709
          Total current assets                                       34,446               43,811
          Property and equipment, net                                2,203                2,016
          Other assets                                               4,599                2,142
          Total assets                                           $   41,248          $    47,969
LIABILITIES AND STOCKHOLDERS' EQUITY
          Current liabilities                                    $   7,362           $    7,802
          Total stockholders' equity                                 33,886               40,167
          Total liabilities and stockholders' equity             $   41,248          $    47,969
          Outstanding shares of common stock                         14,898,022           18,960,612
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                 Nine Months Ended June 30,
                                                                 2009                2008
                                                                 (Unaudited)         (Unaudited)
          Net cash (used in) provided by continuing operations:
          Net cash provided by operating activities              $   5,819           $    6,346
          Net cash (used in) investing activities                    (3,107     )         (671       )
          Net cash (used in) provided by financing activities        (9,012     )         2,600
                                                                     (6,300     )         8,275
          Net cash provided by discontinued operations               3,333                680
          Net (decrease) increase in cash and cash equivalents   $   (2,967     )    $    8,955

TELULAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share data)
Unaudited
                                                               Three Months Ended June 30,             Nine Months Ended June 30,
                                                               2009                2008                2009                2008
Revenues
                  Net product sales                            $   6,600           $   10,776          $   18,601          $   39,170
                  Service revenue                                  5,751               4,536               16,348              15,481
                                     Total revenue                 12,351              15,312              34,949              54,651
Cost of Sales
                  Net product cost of sales                        5,099               7,980               13,848              27,114
                  Service cost of sales                            2,540               2,091               7,348               7,620
                                     Total cost of sales           7,639               10,071              21,196              34,734
Gross margin                                                       4,712               5,241               13,753              19,917
Operating Expenses
                  Engineering and development expenses             1,142               1,390               3,655               4,059
                  Selling and marketing expenses                   1,580               1,609               4,631               5,079
                  General and administrative expenses              1,452               1,755               4,832               5,691
                                     Total operating expenses      4,174               4,754               13,118              14,829
Income from operations                                             538                 487                 635                 5,088
                  Other income, net                                65                  157                 229                 288
Income from continuing operations before income taxes              603                 644                 864                 5,376
                  Provision for income taxes                       7                   -                   13                  -
Income from continuing operations                                  596                 644                 851                 5,376
                  Loss from discontinued operations                (557       )        (4,737     )        (397       )        (7,480     )
Net income (loss)                                              $   39              $   (4,093     )    $   454             $   (2,104     )
Income (loss) per common share:
                  Basic
                                     Continuing operations     $   0.03            $   0.03            $   0.05            $   0.28
                                     Discontinued operations       (0.03      )        (0.24      )        (0.02      )        (0.39      )
                                     Net income                $   (0.00      )    $   (0.21      )    $   0.03            $   (0.11      )
                  Diluted
                                     Continuing operations     $   0.03            $   0.03            $   0.05            $   0.28
                                     Discontinued operations       (0.03      )        (0.24      )        (0.02      )        (0.39      )
                                     Net income                $   (0.00      )    $   (0.21      )    $   0.03            $   (0.11      )
Weighted average number of common shares outstanding:
                  Basic                                            17,036,738          19,259,864          17,875,501          19,150,813
                  Diluted                                          17,143,022          19,259,864          17,927,219          19,150,813

Reconciliation of Non-GAAP Measures

We use income from continuing operations before non-cash items as an additional measure of our operating performance. This measure is not recognized under generally accepted accounting principles. The reconciliation below demonstrates how we calculate this measure from our financial statements

                                                         Three Months Ended June 30,  Nine Months Ended June 30,
                                                         2009         2008            2009         2008
                                                         (Unaudited)                  (Unaudited)
Income from continuing operations                        $     596    $     644       $     851    $     5,376
Non-cash compensation                                          267          407             1,176        1,353
Depreciation and amortization                                  265          184             791          490
Income from continuing operations before non-cash items  $     1,128  $     1,235     $     2,818  $     7,219

Income from continuing operations before non-cash items should be considered in addition to, but not as a substitute for, other measures of performance reported in accordance with accounting principles generally accepted in the United States. While we believe that income from continuing operations before non-cash items, as defined above, is useful within the context described above, it is in fact incomplete and not a measure that should be used to evaluate the full performance of Telular Corporation. Such evaluation needs to consider all of the complexities associated with our business, including, but not limited to, how past actions are affecting current results and how they may affect future results, how we have chosen to finance the business and how regulations and other aforementioned items affect the final amounts that are or will be available to shareholders as a return on their investment. Net loss determined in accordance with U.S. GAAP is the most complete measure available today to evaluate all elements of our performance.

SOURCE: Telular Corporation

Investor Relations Contact: 
The Blueshirt Group 
Brinlea Johnson 
(212)-551-1453 
brinlea@blueshirtgroup.com