Mr. Aly Rahemtulla reports

BSM TECHNOLOGIES INC. REPORTS FIRST QUARTER OF FISCAL 2016 RESULTS

BSM Technologies Inc. has released its financial and operating results for the three months ended Dec. 31, 2015. The operating and financial results of BSM for the quarter were prepared on a consolidated basis and, for the first time, include the operating results of Webtech Wireless Inc., which was acquired pursuant to the merger of equals transaction, via a plan of arrangement on Sept. 30, 2015. The comparable period in fiscal 2015 does not include the operating and financial results of Webtech.

First quarter of fiscal 2016 financial highlights:

• Recurring revenue of $9.9-million as compared with $5.0-million in the first quarter of fiscal 2015;
• Hardware and service revenue of $5.8-million as compared with $2.8-million in Q1 2015;
• Total revenue of $15.7-million as compared with $7.9-million in Q1 2015;
• Adjusted earnings before interest, taxes, depreciation and amortization of $2.1-million as compared with $600,000 in Q1 2015.

First quarter of fiscal 2016 operational highlights:

• Hardware revenue was highlighted by a significant customer implementation in BSM's government vertical and the completion of a CDMA migration program for a large enterprise customer.
• The company's subscriber base had total net additions of approximately 1,000, ending the quarter with approximately 150,500 total subscribers.
• BSM received regulatory approval to commence a normal course issuer bid. Under the terms of the bid, the company may acquire approximately 10 per cent of the total public float of the company's common shares, as defined by the Toronto Stock Exchange. Purchases pursuant to the bid will be completed under the terms of an automatic securities repurchase plan.
• As of the close of trading on Feb. 11, 2016, BSM has purchased 1,259,500 common shares of the company at an average price of 86.84 cents per common share under the bid since its commencement on Dec. 23, 2015.

Management commentary:

"To date, we have achieved approximately $3.5-million in annualized cost synergies resulting from the acquisition of Webtech. We realized approximately $500,000 in acquisition related synergies in our first quarter of fiscal 2016 and we anticipate realizing approximately $700,000 in the second quarter of fiscal 2016. Based on our progress to date, we continue to believe that we remain on track to achieve $4.0[-million] to $5.0-million in synergies by the second half of our fiscal 2017. In addition to integrating our businesses, we completed two sizable customer implementations. The combined impact of these items drove strong results across all of our key financial metrics for the quarter," said Aly Rahemtulla, BSM's president and chief executive officer. "As we move through the remainder of fiscal 2016, our efforts to integrate BSM and Webtech will position us to capitalize on an expanded product, offering a larger vertically focused sales team and enhanced research and development capabilities to fuel accelerated growth."

                     FINANCIAL HIGHLIGHTS 
      (In thousands, except percentages and per share)  
  
                                     Three months ended Dec. 31,    
                                            2015           2014

Total revenue                            $15,701         $7,857
Recurring revenue                          9,875          5,025
Hardware and service revenue               5,826          2,832
Gross profit                               8,672          3,463
Gross margin %                               55%            44%
Net income/(loss)                           (505)          (785)
Basic earnings/(loss) per share           (0.006)        (0.017)
Diluted earnings/(loss) per share         (0.006)        (0.017)
EBITDA                                     1,698            204
Adjusted EBITDA                            2,114            611

The company's condensed interim consolidated financial statements for the quarter, together with its corresponding management's discussion and analysis, can be found under the company's profile on SEDAR and on the company's website.

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