TORONTO, Dec. 6 /PRNewswire-FirstCall/ -- Xenos Group Inc. (TSX: XNS), today announced its unaudited fourth quarter and fiscal 2007 year end financial results.
For the fourth quarter ended September 30, 2007, Xenos reported total revenues of $3,619,000, and a net profit of $69,000 compared with revenues of $3,327,000 and a net loss of $1,559,000 before a goodwill write down in the fourth quarter last year. EBITDA was positive $490,000 for the quarter compared to negative EBITDA of $622,000 for the same period last year, an improvement of $1,112,000.
The fourth quarter of 2007 represents the fifth consecutive quarter of revenue growth compared with the same quarter in the prior year, and the fourth consecutive quarterly improvement in earnings before interest, taxes, depreciation and amortization (EBITDA), both trends that management expects to continue into fiscal 2008.
For the year ended September 30, 2007, Xenos reported revenues of $15,073,000 and a net loss of $633,000 compared with revenues of $13,841,000, and a net loss before extraordinary items of $5,594,000 in the previous year. EBITDA for 2007, (excluding reorganization charges of $191,000) was positive $1,335,000 compared to negative EBITDA of $3,551,000 for fiscal 2006.
The foreign exchange loss for the 2007 fiscal year was $750,000 as compared to a foreign exchange gain of $101,000 in the previous year. "Despite the significant negative impact of the rise of the Canadian dollar on both our top and bottom line, we increased revenue by 9% in the year and returned to profitability in the fourth quarter," said George Kypreos, Vice President and CFO.
"We restructured in early 2007 and renewed our market focus," said Stuart Butts, Chairman and CEO. "In addition to revenue growth and profitability, management's focus on improving revenue-per-employee resulted in an increase of 34% to $172,000 per employee. Our new management team launched four major initiatives in 2007, positioning the Company for significant organic growth over the next several years."
Xenos innovation with two industry-leading offerings, ECM Document Archive Migration and the Xenos Integrated Document Solution(TM) contributed to a 27% increase in professional services revenue for the year.
In 2008, the Company's strategic alliances with IBM and Oracle and broadened relationship with Document Sciences Corp. are expected to contribute significantly to revenue growth. In addition, the Xenos channel partner program, concentrating on specific, identifiable market segments such as enterprise content management (ECM), high-volume printing, logistics and ports, will extend the market reach of Xenos technologies, and make a positive contribution to results.
"The strategic direction of our software development is driven by key requirements from our major customers and trends in the global market for enterprise-level information management solutions. We plan to launch our integrated product platform, the "Xenos Enterprise Information Server(TM)" this fiscal year. We anticipate significant revenues from this innovative offering in fiscal 2009 and beyond," added Mr. Butts.
"The Information Management software market is a dynamic environment," explained Mr. Butts. "While committed to delivering superior results from organic growth, we continue to review strategic alternatives for our shareholders that would enhance shareholder value."
At September 30, 2007, Xenos held $7,357,000 in cash and short term deposits compared to $7,308,000 at the end of 2006.
A full update on Xenos' activities together with Management Discussion and Analysis of the results for fiscal 2007 will be provided with the audited financial statements filed on http://www.sedar.com/ later in December.
Financial Highlights - (complete statements are attached): ------------------------------------------------------------------------- Three Months Twelve Months ------------------------------------------------------------------------- Period Ended September 30, 2007 2006 2007 2006 (in CDN$000s except per share amounts) Sales 3,619 3,327 15,073 13,841 Gross profit 2,974 2,716 12,254 11,449 EBITDA 490 (622) 1,335 (3,551) Net income (loss) 69 (7,934) (633) (11,969) Net income (loss) per share 0.01 (0.79) (0.06) (1.20) Cash & short-term investments 7,357 7,308 Cash per Share $0.74 $0.74 Common Shares Outstanding 9,949 9,937 ------------------------------------------------------------------------- See discussion of non-GAAP financial measures below. Conference Call
A conference call for shareholders, analysts and other members of the investment community has been scheduled for December 7 at 10 a.m. Eastern Time. Stuart Butts, Chairman, President and Chief Executive Officer, and George Kypreos, Chief Financial Officer, will discuss the financial results and provide updates on operations. To participate, please dial 416-644-3417 or 1-800-732-9307 approximately 10 minutes before the conference call.
The conference can also be heard over the Internet at the company's website. http://www.xenos.com/
A recording of the conference call will be available through December 14. Please dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21255962, followed by the number sign, to listen to the rebroadcast. The call will also be archived for 30 days on the Xenos website.
About Xenos
Xenos (TSX:XNS) high-performance software solutions streamline enterprise information supply chains. We enable our customers to process, transform, repurpose, personalize and deliver their data and documents when they need it, where they need it and how they need it. Xenos extends the value of existing IT investments, enabling organizations to increase efficiency, agility and accountability.
By streamlining, standardizing and automating the handling of information on demand, our customers reduce costs while increasing a powerful competitive advantage-adaptability. Xenos has customers worldwide in financial services, insurance, healthcare, telecommunications, manufacturing, logistics, transportation, retail and government sectors. Xenos sells and supports its solutions directly from offices in Canada, the United States, the United Kingdom and France and through a global partner network. For more information, visit http://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 short term investments by the number of common shares outstanding.
For further information, visit http://www.xenos.com/ (C) 2007 Xenos Group Inc. All rights reserved. Xenos Group Inc. Consolidated Statements of Operations (Unaudited) Three Months Ended Twelve Months Ended September 30 September 30 2007 2006 2007 2006 --------------------------- --------------------------- Sales $ 3,618,799 $ 3,326,628 $ 15,072,561 $ 13,840,685 Cost of sales 644,988 610,512 2,818,726 2,391,370 ------------- ------------- ------------- ------------- Gross profit 2,973,811 2,716,116 12,253,835 11,449,315 ------------- ------------- ------------- ------------- Sales and marketing 1,156,160 2,016,387 5,597,991 9,389,786 Research and development 674,833 826,419 2,931,558 3,334,990 Administration and general 629,789 461,682 2,284,754 2,152,026 Reorganization costs (15,199) 444,506 190,817 444,506 Amortization 295,614 336,155 1,167,798 1,223,131 Stock based compensation 23,323 33,623 104,979 123,415 Interest and bank charges 11,799 8,934 53,169 46,107 ------------- ------------- ------------- ------------- 2,776,319 4,127,706 12,331,066 16,713,961 ------------- ------------- ------------- ------------- Income (loss) before undernoted items 197,492 (1,411,590) (77,231) (5,264,646) Goodwill impairment charge - (6,375,368) - (6,375,368) Interest and other 63,543 65,164 215,207 305,252 Foreign exchange (loss) gain (199,882) 25,701 (750,312) 101,261 ------------- ------------- ------------- ------------- (136,339) (6,284,503) (535,105) (5,968,855) ------------- ------------- ------------- ------------- Income (loss) before income taxes 61,153 (7,696,093) (612,336) (11,233,501) Provision for income taxes (7,516) 238,215 20,964 735,746 ------------- ------------- ------------- ------------- Net income (loss) $ 68,669 $ (7,934,308) $ (633,300) $(11,969,247) ------------- ------------- ------------- ------------- Net income (loss) per common share - Basic $ 0.01 $ (0.79) $ (0.06) $ (1.20) - Fully diluted $ 0.01 $ (0.79) $ (0.06) $ (1.20) Weighted average number of shares - Basic 9,938,665 9,935,629 - Fully diluted 9,938,665 9,935,629 Xenos Group Inc. Consolidated Balance Sheets (Unaudited) As at September 30 2007 2006 --------------------------- ASSETS CURRENT Cash & S.T. investments $ 7,356,808 $ 7,308,177 Trade receivables 1,727,224 2,103,212 Other receivables 5,823 3,085 Prepaids 735,873 689,491 Income taxes recoverable 561 7,204 ------------- ------------- 9,826,289 10,111,169 LONG TERM Future income taxes 1,157,857 1,164,566 Capital assets 1,133,965 1,346,041 Intangibles and other assets 1,869,673 2,470,274 ------------- ------------- 4,161,495 4,980,881 ------------- ------------- TOTAL ASSETS $ 13,987,784 $ 15,092,050 ------------- ------------- LIABILITIES CURRENT Bank indebtedness $ - $ 500,000 Payables & accruals 2,082,228 2,307,340 Income taxes payable 15,678 8,095 Deferred revenue 3,420,736 3,261,751 Current portion - capital lease 87,277 64,893 ------------- ------------- 5,605,919 6,142,079 LONG TERM Capital lease obligations 63,713 95,252 Deferred revenue 10,284 13,371 Deferred lease inducements 147,994 173,448 ------------- ------------- 221,991 282,071 TOTAL LIABILITIES 5,827,910 6,424,150 SHAREHOLDERS' EQUITY Capital stock 44,997,009 44,969,035 Contributed surplus 369,353 272,053 Deficit (37,206,488) (36,573,188) ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 8,159,874 8,667,900 ------------- ------------- TOTAL LIABILITIES & EQUITY $ 13,987,784 $ 15,092,050 ------------- ------------- Xenos Group Inc. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Twelve Months Ended September 30 September 30 2007 2006 2007 2006 --------------------------- --------------------------- Operating activities Net income (loss) $ 68,669 $ (7,934,308) $ (633,300) $(11,969,247) Amortization 295,614 336,155 1,167,798 1,223,131 Loss on sale of capital assets 1,914 98 69,989 3,423 Future income taxes (500) 240,828 6,709 691,297 Stock based compensation 23,323 33,623 104,979 123,415 Goodwill impairment charge - 6,375,368 - 6,375,368 Change in non- cash working capital (39,548) (455,023) 246,426 (265,196) ------------- ------------- ------------- ------------- 349,472 (1,403,259) 962,601 (3,817,809) Financing Activities Bank financing (500,000) - (500,000) - Capital lease payments (22,411) (10,123) (84,890) (39,341) Proceeds on issue of shares 20,295 - 20,295 4,950 ------------- ------------- ------------- ------------- (502,116) (10,123) (564,595) (34,391) Investing activities Additional consideration paid on acquisitions - (1,150) - (73,186) Purchase of capital assets (67,146) (121,133) (171,709) (449,696) Proceeds on disposal of capital assets - - 873 - Development costs incurred (17,278) (53,460) (178,539) (350,482) ------------- ------------- ------------- ------------- (84,424) (175,743) (349,375) (873,364) Net (decrease) increase in cash and short term investments (237,068) (1,589,125) 48,631 (4,725,564) Cash and short term investments Beginning of period 7,593,876 8,897,302 7,308,177 12,033,741 ------------- ------------- ------------- ------------- End of period $ 7,356,808 $ 7,308,177 $ 7,356,808 $ 7,308,177 ------------- ------------- ------------- -------------
