For the year ended December 31, 2011, Hemisphere GPS (TSX: HEM) reported revenues of $67.8 million, a 21% increase from revenues of $56 million reported in 2010. Growth reported for the first three quarters of 2011 was followed by flat growth in the fourth quarter as market activity in Europe and South America, primarily from OEM's, was below other regions.

"Other than lower European and South American sales in the third and fourth quarters we have seen relative stability and strength in our global markets," stated Steven Koles, president and CEO of Hemisphere GPS.

"The United States contributed 44% of our total revenue in 2011, and 47% in the fourth quarter specifically. Due to the size of the US market, the recovery occurring in the US economy is still the largest relative driver of our growth. With higher levels of customer confidence and discretionary income, I am pleased to report that our U.S. customer segment is indicating further improvement for 2012."

Mr. Koles explained: "Historically high grain prices and healthy harvests are providing rural farming communities with the highest relative income in generations. As a result we've had a strong start in 2012 with our North American sales. The USDA (U.S. Department of Agriculture) projects that U.S. net farm income increased by 24% to $98.1 billion in 2011 — the highest year ever in the United States.

Similarly in Canada, 2011 farm income is projected to have increased by 24% to a record level of nearly $12 billion. We have been building up our product inventory for an anticipated increase in post-harvest sales and the 2012 buying season, and we are projecting revenue growth of 25% in 2012. Most importantly, our revenue run-rate has now surpassed our operating break-even point indicating a return to positive annual earnings in 2012, a full recovery from the global recession of 2009/2010."

Gross margin for the year was 47.2% compared to 47.6% in 2010. Prior to expenses of $0.8 million related to strategic initiatives in the second quarter of 2011, year-over-year total operating expenses decreased by $0.7 million to $32.6 million for the year despite the 21% growth in revenues, demonstrating the scalability of the company's operating model.

Hemisphere GPS reported a loss of $1.5 million or ($0.03) per share (basic and diluted) for 2011, an improvement of $6.1 million compared to a net loss of $7.6 million or ($0.14) per share (basic and diluted) in 2010.

At December 31, 2011, the Company held cash of $6.7 million, or $0.11 per share, compared to $5.3 million in 2010. Working capital was approximately $28.8 million, and the Company had 60,824,409 common shares outstanding.

2011 Regional Sales Review

North American revenues including Canada and the United States, the Company's largest sales region, were up by 24% to $42 million in 2011.  Australian sales grew by 69% to $4.3 million, and sales to other international regions, which include South America and Asia, were 2% lower in 2011. European revenues were up by 21% over 2010. Strong European sales growth of 60% in the first half of 2011 was tempered for the year with declines of 24% and 7% in the third and fourth quarters respectively, resulting from temporary uncertainty stemming from the European sovereign debt crisis.

2011 Product Segment Sales Review

Agriculture - Ground-based agriculture sales from Outback Guidance® branded products, increased by 27% year-over-year. Sales of the Company's air-based agriculture products grew by 22% compared to 2010, led by the new Bantam aerial guidance system. Total sales of $53 million to the Agriculture segment in 2011 increased by 21% for the year compared to 2010, contributing 78% of total revenues, which was the same contribution percentage as 2010.

Precision Products - Record sales of $14.7 million for the Precision Products segment were up 21% in 2011, contributing 22% of total revenue for the year. Sales of Vector heading sensor products to the marine markets together with sales of GPS boards, receivers and development kits to OEM customers and system integrators led the growth in this segment.

Fourth Quarter Financial Review

For the three months ended December 31, 2011, Hemisphere GPS reported revenues of $12.3 million, slightly up from $12.2 million in the fourth quarter of 2010. Healthy sales growth in Australia and Asia, were offset by a fourth quarter decline in South American and European revenues. North American sales were consistent with the fourth quarter of 2010.

Fourth quarter gross margin contribution was 45.7% or $5.6 million for the fourth quarter, an increase compared to 42.2% and $5.1 million for the fourth quarter of 2010. 2010 gross margins reflected an incremental reserve for obsolete inventory with no similar item impacting the 2011 margins.

Operating expenses decreased year-over-year by $0.4 million or 5% to $8.2 million in the fourth quarter in line with management's profitability objectives. Research and development expenses in the fourth quarter were lower by $0.1 million year over year at $3.1 million. Sales and marketing expenses for the quarter were lower by 4% and general and administrative expenses were down by 11%.

For the fourth quarter of 2011, Hemisphere GPS reported a reduced loss of $2.6 million, or ($0.04) per share (basic and diluted), compared to a fourth quarter 2010 loss of $3.3 million or ($0.06) per share (basic and diluted).

Operating Highlights

  • Hemisphere GPS entered the emerging data services market in precision agriculture with the acquisition of AgJunction, a provider of a cloud-based data management software platform and wireless hardware to precision agriculture retailers and growers. Data services is a new growth segment in precision agriculture with market adoption driving an 80-per-cent three-year cumulative annual revenue growth rate for AgJunction. The merged businesses positions Hemisphere GPS for a leadership position in the sector by bringing real-time decision-making information right into the farmer's cab. Effective use of precision agriculture data can result in lower costs and environmental impact through lower use of pesticides, fertilizer and fuel, and provide a higher crop yield per acre, increased profitability and lower the impact on global food costs.

  • Hemisphere GPS Inc. and CLAAS Agrosystems expanded their OEM relationship with a development agreement whereby Hemisphere GPS will develop next-generation precision farming solutions for integration into CLAAS machinery. New intelligent machine control solutions including precise guidance, advanced automated steering, application controls and remote data management is supported by multiyear co-development financing to Hemisphere GPS. The new precision farming solutions will be introduced over the next several years as a factory installation on CLAAS machinery as well as aftermarket products throughout the CLAAS distribution network, becoming the backbone for the next generation of precision farming solutions for CLAAS.

  • Hemisphere GPS expanded its multiyear OEM agreement with Navico Inc., the world's largest marine electronics company, supplying Navico with the industry's smallest GPS compass, which will be privately branded the "Simrad HS70". The compass autopilots pleasure boats, yachts and commercial vessels.

  • An agreement with Carlson Software is providing the road map for new, integrated solutions for land survey, mapping, construction, mining and other key machine control markets. Carlson Software is a leading developer of field and office-based land development software.

  • Hemisphere GPS launched the G100™ all-in-one guidance and steering system for agriculture machinery, with expanded compatibility to work directly with all AGCO®, Challenger® and Massey® brands of Auto-Guide Ready™ tractors and combines.

  • Hemisphere GPS released Satloc G4 - the most comprehensive and advanced aircraft guidance system for aerial applicators. Satloc G4 delivers Web-based connectivity along with a high level of guidance performance through an intuitive lightbar and graphical display. This new product enables aerial application companies and their pilots to leverage Web-based services in order to make their jobs more efficient and bring a higher quality of service to their customers. Satloc G4's connectivity feature offers pilots the ability to transfer application data wirelessly, accept work orders and maps through the Internet, access the guidance system from remote locations such as the office, truck or mobile device, and directly communicate through Skype audio and video.

Conference Call

A conference call and Web cast for shareholders, analysts and other members of the investment community has been scheduled for today, March 6, 2012 at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time) to discuss the financial results and provide an update on operations.

To participate in the conference call, please dial 1-647-427-7450 or 1-888-231-8191 approximately 10 minutes before the conference call. Please note that a live Web cast of the call will be available on the Hemisphere GPS Web site at  The Web cast will be archived there for later review.

A recording of the call will be available through March 13. Please dial 1-416-849-0833 or 1-855-859-2056 and enter password 56555153 to listen to the rebroadcast.

About Hemisphere GPS

Hemisphere GPS designs and manufactures innovative, cost-effective GPS (GNSS) products for positioning, guidance, and machine control applications in agriculture, marine, construction, and other markets. The Company holds numerous patents and other intellectual property and owns several leading brand names, including Outback Guidance®, a leading brand in precision GPS for agriculture. The Company is headquartered in Calgary, Alberta, with major product development, sales, and marketing facilities in Arizona, Kansas, and Australia. Hemisphere GPS is listed on the Toronto Stock Exchange (TSX) trading under the symbol "HEM" and is one of the TSX Cleantech designated companies. For more information about Hemisphere GPS, please go to

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Hemisphere GPS' control, including: the impact of general economic conditions, industry conditions, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to the announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Hemisphere GPS' actual results, performance or achievement could differ materially from those expressed in, or implied by these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceed, that Hemisphere GPS will derive therefrom.