RICHMOND, B.C. - Digital Dispatch Systems Inc. (TSX:DD) posted a loss as revenue fell to $5.1 million in the third quarter, down 15 per cent from a year earlier, due to a variety of factors including the rising value of the Canadian dollar against other major currencies.
The Vancouver-area company offers products and services to manage vehicle fleets and mobile workforces, including dispatch software, wireless communication infrastructure and a range of in-vehicle mobile devices.
Digital Dispatch had a net loss of $600,000 or five cents per share for the three months ended Sept. 30, compared with net income of $600,000 or five cents per in the third quarter of 2006 when revenue was $6 million.
The sales decline was attributed to a significant increase in the Canadian dollar relative to other currencies, lower sales volume in its primary taxi market, and the specific nature of major deals awarded in the quarter.
The company had $8 million in cash and short-term investments as of Sept. 30. The majority of the cash will be used for two recent acquisitions, Mobisoft and StrataGen.
Mobisoft Oy is a Finnish software company specializing on the taxi dispatch market. It serves 2,000 taxis in Finland and a has a growing customer base in the United Kingdom. That deal closed Oct. 1.
StrataGen Systems Inc. of Kirkland, Wash., which designs and provides scheduling, dispatching, and client management software for public paratransit services for disabled passengers. That letter of intent was signed Oct. 2.
"While our revenues have been impacted by the strengthened Canadian dollar and the timing of customer orders, we have made strong progress in executing our strategic diversification plan which is expected to make a positive impact commencing in 2008," Vari Ghai, the company's chief executive and CEO.
"We have built a strong foundation in our core taxi business over the past 20 years and are now leveraging our core competencies to aggressively expand into new vertical and geographic markets. The acquisition of MobiSoft based in Finland further strengthens our presence in Europe while enabling Digital Dispatch to commence addressing the sizable small taxi and transit fleet markets.
"Our pending acquisition of StrataGen will result in a complete offering to the large fleet transit market diversifying Digital Dispatch from our core taxi business."
A new $4-million line of credit facility with the Royal Bank of Canada to fund the growth anticipated in its new business initiatives, the company said.
Its shares traded at $2.70 on Wednesday.
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