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Xenos Earns $0.04 in F2009 Second Quarter

^{Published on 2009-05-13 03:34:32, Last Modified on 2009-05-13 03:37:33 - Market Wire}
 

 TORONTO, May 13 /CNW/ - Xenos Group Inc. (TSX:XNS) today reported year-over-year increases in revenues and earnings for the fiscal 2009 second quarter financial results. For the three months ended March 31, 2009, Xenos revenues increased to $4,133,000 as compared to revenues of $3,805,000 for the same period in 2008. The second quarter of fiscal 2009 represents eleven consecutive quarters of year-over-year revenue growth. Gross margin in the quarter increased to 84% as compared to 76% in the same quarter of fiscal 2008. Gross margins benefited from an increase in Xenos licensed product revenues in the overall revenue mix. Operating expenses during the quarter increased to $3,126,000 as compared to $2,870,000 for the same period one year ago. Sales and marketing expenses increased 17% as a result of sales force expansion and increased marketing expenses related to the launch of Xenos Enterprise Server(TM), while general and administrative expenses decreased by 11% under expense management and efficiency initiatives. Research and development expenses in the quarter increased 14% year-over-year to $941,000 from $822,000 as the Company continued to build out Xenos Enterprise Server functionality in response to market requirements. EBITDA for the period increased 124% to $571,000, as compared to $255,000 in the same period in 2008. The increase in EBITDA resulted from an increase in both total revenues and gross margins. Xenos reported fiscal second quarter net income of $344,000 or $0.04 per share, as compared to net income of $247,000 or $0.03 per share in the second quarter of fiscal 2008. For the six months ended March 31, 2009, Xenos reported revenues of $8,292,000, EBITDA of $1,020,000 and a net loss of $33,000 or $0.00 per share, as compared to revenues of $7,954,000, EBITDA of $979,000 and net income of $775,000 or $0.08 per share for the first six months of fiscal 2008 respectively. Comparative results and revenues for the first two quarters were impacted by the fluctuation in the value of the Canadian dollar against major trading currencies, particularly the US dollar. Revenue generated in US dollars represented the majority of revenues earned in the first half of the year. Xenos incurred a foreign exchange loss of $654,000 for the first six months of the fiscal year compared to a gain of $212,000 in the same period last year. The recent run-up in the value of the Canadian dollar against the US dollar, if sustained to the end of June would result in a foreign exchange gain for the quarter, as the company currently holds forward contracts to sell US $ 4,500,000 at $1.137 CAD over the next three quarters. At March 31, 2009, Xenos held cash of $9,734,000 or $0.97 per common share, and does not hold significant long-term debt. This compares to $8,115,000, or $0.81 per common share, at September 30, 2008. During the quarter Xenos launched Xenos OnLine(TM), a portfolio of Software-as-a-Service (SaaS) offerings that deliver Xenos' core technology and solutions over the internet on demand. Under the banner of Xenos OnLine, Xenos document transformation, data transformation and ePresentment technology is available as a service. Xenos OnLine enables organizations of any size to benefit from our enterprise-class technology without incurring the capital costs associated with a licensed, in-house solution. Xenos also began marketing Xenos DSR(TM), a high-performance document storage reduction solution for enterprise content management (ECM). Xenos DSR can deliver up to 90% reduction in the amount of physical storage required to archive content-rich, customer-facing electronic documents such as monthly statements, bills and correspondence. In large organizations with many customers, Xenos DSR can deliver savings that amount to millions of dollars a year. As such, it offers a way for enterprises to adopt a measureable green strategy while drastically reducing operational costs through the elimination of duplication in the electronic archiving process. "Xenos Enterprise Server is a broad and important strategic product that supports a large number of compelling go-to-market use-cases," stated Stuart Butts, Chairman & CEO, Xenos Group Inc. "We will continue to roll these out over the next number of quarters. Market uptake in this challenging environment has been gratifying and encouraging." Financial Highlights - (complete statements are attached): ------------------------------------------------------------------------- Three Months Six Months ------------------------------------------------------------------------- Period Ended March 31, 2009 2008 2009 2008 (in CDN$000s except per share amounts) Sales 4,113 3,805 8,292 7,954 Gross profit 3,486 2,893 6,787 6,180 EBITDA 571 255 1,020 979 Net income (loss) 344 247 (33) 775 Net income per share 0.04 0.03 0.00 0.08 Cash & cash equivalents 9,734 8,248 Cash per Share $0.97 $0.82 Common Shares Outstanding 10,005 10,005 ------------------------------------------------------------------------- See discussion of non-GAAP financial measures below. Conference Call Notice A conference call for shareholders, analysts and other members of the investment community has been scheduled for May 13 at 10:00am (Eastern Time). Stuart Butts, Chairman, President & CEO, and George Kypreos, CFO, will discuss the financial results and provide updates on operations. To participate, please dial 416-644-3432, or 1-800-814-4890 approximately 10 minutes before the conference call. The conference can also be heard over the Internet at [ www.xenos.com ]. A recording of the conference call will be available through May 20. Please dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21305782 followed by the number sign to listen to the rebroadcast. The call will also be archived for 30 days on the Xenos web site at [ www.xenos.com ]. About Xenos Group Inc. Xenos (TSX:XNS) is the market-leading provider of high-performance software solutions that deliver a superior Return on Information(TM) by Streamlining Enterprise Information Supply Chains(TM). The company's solutions, based on the scalable Xenos Enterprise Server(TM) and its components, process, extract, transform, repurpose and personalize high volumes of data and documents for storage, real-time access, ePresentment, printing and delivery in numerous formats across multiple channels. By readily repurposing, integrating with and extending the business value of existing technology, infrastructure and business applications, Xenos solutions empower organizations to adapt to changing market demands. They also improve operational efficiency, enhance business processes, reduce risk for compliance management and increase employee productivity with lowered total cost of ownership both for the enterprise and for its customers. Xenos supports Green IT initiatives by empowering organizations to "Reduce Reuse Recycle" information resources. Xenos customers are among the largest organizations worldwide, spanning numerous industries including financial services and insurance. Xenos has offices in Canada, the United States, the United Kingdom and France and a global partner network. For more information, visit [ www.xenos.com ]. Certain statements made in this press release are forward-looking within the meaning of certain securities laws. Such forward-looking statements are based on a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company or developments in the Company's business or its industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. The Company urges you not to place undue reliance on these estimates, opinions and projections. The Company assumes no obligation to update forward-looking statements if assumptions or these plans, estimates, opinions or projections should change. The Company uses financial measures including, but not limited to, "EBITDA" to supplement its consolidated financial statements, which are presented in accordance with GAAP. EBITDA is not a recognized measure under GAAP and should not be construed as an alternative to net income (loss). Xenos' method of calculating EBITDA may differ from other companies and accordingly may not be comparable to measures used by other companies. Cash per share is a non-GAAP measure and is calculated by dividing the cash and cash equivalents by the number of common shares outstanding. (C)2009 All rights reserved. Xenos, the Xenos logo, Xenos Enterprise Server, Xenos ES, Xenos Integrated Document Solution, Xenos IDS, Xenos Loader, Xenos DSR, Xenos OnLine, Xenos d2e Vision, Xenos terminalONE, Streamlining Enterprise Information Supply Chains, and Return on Information are either registered Trademarks or Trademarks of Xenos Group Inc. All other trademarks and trade names are the property of their respective owners. Xenos Group Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended March 31 March 31 2009 2008 2009 2008 ----------------------------- ----------------------------- Sales $ 4,133,365 $ 3,804,619 $ 8,292,016 $ 7,953,953 Cost of sales 647,266 912,010 1,504,910 1,773,922 -------------- -------------- -------------- -------------- Gross profit 3,486,099 2,892,609 6,787,106 6,180,031 -------------- -------------- -------------- -------------- Expenses Sales and marketing 1,441,459 1,227,246 2,863,113 2,418,785 Research and development 941,086 822,080 1,838,571 1,601,030 Administration and general 505,968 566,187 1,011,659 1,138,999 Amortization 200,997 221,709 420,329 493,120 Stock based compensation 26,294 21,871 53,489 42,438 Interest and bank charges 10,690 11,394 18,923 22,935 -------------- -------------- -------------- -------------- 3,126,494 2,870,487 6,206,084 5,717,307 -------------- -------------- -------------- -------------- Income before undernoted items 359,605 22,122 581,022 462,724 Interest and other 26,146 68,173 72,163 141,613 Foreign exchange (loss) gain (30,116) 164,610 (653,662) 211,698 -------------- -------------- -------------- -------------- (3,970) 232,783 (581,499) 353,311 -------------- -------------- -------------- -------------- Income (loss) before income taxes 355,635 254,905 (477) 816,035 Provision for income taxes 11,742 7,909 32,431 41,207 -------------- -------------- -------------- -------------- Net income (loss) $ 343,893 $ 246,996 $ (32,908) $ 774,828 -------------- -------------- -------------- -------------- Net income (loss) per common share - Basic $ 0.04 $ 0.03 $ - $ 0.08 - Diluted $ 0.04 $ 0.03 $ - $ 0.08 Weighted average number of shares - Basic 10,005,444 9,985,992 - Diluted 10,055,836 10,093,892 ------------------------------------------------------------------------- Deficit, beginning of year $ (35,710,117) $ (37,206,488) Net (loss) income (32,908) 774,828 -------------- -------------- Deficit, end of period (35,743,025) (36,431,660) -------------- -------------- Xenos Group Inc. Consolidated Balance Sheets (Unaudited) As at March 31 September 30 2009 2008 -------------------------------- ASSETS CURRENT Cash and cash equivalents $ 9,734,386 $ 8,115,259 Trade receivables 2,306,009 2,471,700 Other receivables 29,079 23,767 Non-hedging financial derivatives - 82,524 Prepaids 653,959 597,052 Income taxes recoverable 34,737 26,766 -------------- -------------- 12,758,170 11,317,068 LONG TERM Future income taxes 1,218,443 1,193,086 Capital assets 1,019,412 998,436 Intangibles and other assets 2,083,888 1,999,370 -------------- -------------- 4,321,743 4,190,892 -------------- -------------- TOTAL ASSETS $ 17,079,913 $ 15,507,960 -------------- -------------- LIABILITIES CURRENT Payables and accruals $ 1,709,257 $ 2,259,583 Income taxes payable 103,601 97,921 Deferred revenue 4,697,555 3,099,644 Non-hedging financial derivatives 545,411 - Current portion - capital lease 33,862 61,170 -------------- -------------- 7,089,686 5,518,318 LONG TERM Capital lease obligations - 2,543 Deferred revenue 6,909 14,812 Deferred lease inducements 116,184 125,734 -------------- -------------- 123,093 143,089 TOTAL LIABILITIES 7,212,779 5,661,407 SHAREHOLDERS' EQUITY Capital stock 45,125,209 45,125,209 Contributed surplus 484,950 431,461 Deficit (35,743,025) (35,710,117) -------------- -------------- TOTAL SHAREHOLDERS' EQUITY 9,867,134 9,846,553 -------------- -------------- TOTAL LIABILITIES & EQUITY $ 17,079,913 $ 15,507,960 -------------- -------------- Xenos Group Inc. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Six Months Ended March 31 March 31 2009 2008 2009 2008 ----------------------------- ----------------------------- Operating activities Net income (loss) $ 343,893 $ 246,996 $ (32,908) $ 774,828 Amortization 200,997 221,709 420,329 493,120 Unrealized foreign exchange (gain) loss (138,063) (92,535) (194,390) (64,744) Unrealized (gain) loss on non-hedging financial derivatives (87,144) - 627,935 - Future income taxes (6,502) (7,190) (25,357) (5,729) Stock based compensation 26,294 21,871 53,489 42,438 Change in non-cash working capital 1,212,723 828,364 1,131,313 (9,539) -------------- -------------- -------------- -------------- 1,552,198 1,219,215 1,980,411 1,230,374 -------------- -------------- -------------- -------------- Financing activities Capital lease payments (15,104) (23,486) (29,851) (46,427) Proceeds on issue of shares - 10,650 - 93,480 -------------- -------------- -------------- -------------- (15,104) (12,836) (29,851) 47,053 -------------- -------------- -------------- -------------- Investing activities Purchase of capital assets (111,324) (166,426) (175,708) (180,984) Development costs incurred (159,176) (198,696) (350,115) (270,139) -------------- -------------- -------------- -------------- (270,500) (365,122) (525,823) (451,123) -------------- -------------- -------------- -------------- Effect of foreign exchange rate fluctuations on cash and cash equivalents 138,063 92,535 194,390 64,744 -------------- -------------- -------------- -------------- Net increase in cash and cash equivalents 1,404,657 933,792 1,619,127 891,048 Cash and cash equivalents Beginning of period 8,329,729 7,314,064 8,115,259 7,356,808 -------------- -------------- -------------- -------------- End of period $ 9,734,386 $ 8,247,856 $ 9,734,386 $ 8,247,856 -------------- -------------- -------------- -------------- %SEDAR: 00012375E 

For further information: Editorial Contact: George Kypreos, Xenos Group Inc., (905) 709-1020, [ gkypreos@xenos.com ]; Investor Relations Contact: Cory Pala, Xenos Group Inc., (416) 657-2400, [ cpala@xenos.com ]