Wireless Matrix Reports Record Second Quarter Fiscal 2006 Results Achieves Net Income & Substantial Sales Orders

Business Wire, Dec 13, 2005

RESTON, Va. -- Wireless Matrix Corporation (TSX:WRX), the leader in wireless data communication solutions is pleased to provide the results for the second quarter ended October 31, 2005.

All currency expressed in U.S. dollars.

Wireless Matrix has achieved a major milestone in the Corporation's history, delivering net income of $199,000 for the second quarter of 2006, its first quarter of net income as a public entity. In addition, the Corporation continued to lay the groundwork for future positive financial results having received its second largest order in history from Stratos Global for 3,500 units.

"We are very excited about our results this quarter and about the foundation we are building for future growth. This quarter was our third consecutive quarter of positive net subscriber additions and our second consecutive quarter of positive income before other charges. Our investment in sales and marketing resources last year has resulted in significant sales activity this year as well as an ever growing pipeline of opportunities. This bodes well for continued improvements in our financial results and, ultimately creation of shareholder value." said J. Richard Carlson, Wireless Matrix's Chief Executive Officer and President.

The net income results were driven by a 9.6% jump in service revenues over the second quarter 2005 to record service revenues of $4,025,000 this quarter. The service revenue growth was due to a net increase in total subscribers of 1,259 to end the quarter at 28,642 subscribers. An expected drop in hardware revenues to $2,418,000 for the quarter, offset the service revenue increases due to the decline of deferred revenue related to the amortization of hardware sales three year ago.

Hardware revenues were impacted positively by 1,942 units being shipped in the second quarter 2006 for total units shipped in the first six months of the year of 2,942, a 29% increase over the approximately 2,280 units that were shipped over the same period last year. Wireless Matrix also had an additional 3,195 units in backlog as of October 31, 2005, to be shipped over the next fifteen (15) months. Backlog includes firm purchase orders received through Stratos of 3,500 units, a 400 unit order from a leading US utility company that is anticipated to expand to a total order of 2,000 units, as well as several smaller orders. Backlog does not include, the letter of intent Wireless Matrix received, subsequent to the quarter end, from one of the leaders in the rail industry for 2,000 mobile rail units that will be shipped over the next two years starting with an initial purchase order for 100 units to be shipped in the third quarter 2006.

Financial Highlights:

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                          Three months ended,       Six months ended,
                                  October 31              October 31
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                            2005        2004        2005        2004
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Service               $4,025,000  $3,671,000  $7,827,000  $7,430,000
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Hardware               2,418,000   2,696,000   5,026,000   5,246,000
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Total sales            6,443,000   6,367,000  12,853,000  12,676,000
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Gross margins          3,002,000   2,621,000   5,792,000   5,195,000
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Income (loss) before
 other charges           412,000    (139,000)    590,000    (157,000)
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Income (loss) from
 continuing
 operations              199,000    (700,000)     71,000    (997,000)
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Income from
 discontinued
 operations                   --      15,000          --      144,000
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Net income (loss)
 for the period       $  199,000   $(685,000)  $  71,000  $ (853,000)
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Basic and diluted
 income (loss)
 per share:
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Income (loss) from
 continuing
 operations           $    .0030    $ (.0104)   $  .0011    $ (.0148)
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Net income (loss)     $    .0030    $ (.0102)   $  .0011    $ (.0127)
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Cash balance          13,676,000  10,287,000  13,676,000  10,287,000
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Total subscribers         28,642      24,404      28,642      24,404
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Average Revenue
 Per Unit (ARPU)      $    45.09    $  47.12    $  45.51    $  47.79
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Total units shipped        1,942       1,139       2,942       2,280
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