TORONTO, Dec. 16 /PRNewswire-FirstCall/ -- Xenos Group Inc. (TSX: XNS) today announced its unaudited fourth quarter and fiscal 2008 year end financial results.
For the fourth quarter ended September 30, 2008, Xenos reported total revenues of $3,803,000 and a net profit of $479,000 or $0.05 per common share, compared with revenues of $3,619,000 and a net income of $69,000 or $0.01 per common share in the fourth quarter last year. EBITDA was $649,000 for the quarter compared to EBITDA of $490,000 for the same period last year, an improvement of $159,000.
The fourth quarter of 2008 represents the ninth consecutive quarter of year-over-year revenue growth, and the eighth consecutive quarterly improvement in earnings before interest, taxes, depreciation and amortization (EBITDA).
For the year ended September 30, 2008, Xenos reported revenues of $15,908,000 and net income of $1,496,000 compared with revenues of $15,073,000, and a net loss of ($633,000) in the previous year. This represents $0.15 per common share in earnings for fiscal 2008, compared with a loss of ($0.06) per common share in fiscal 2007.
EBITDA for 2008 was $2,118,000 compared to EBITDA of $1,335,000 for fiscal 2007.
At September 30, 2008, Xenos held $8,115,000 in cash and cash equivalents, or $0.81 per share compared to $7,357,000 at September 30, 2007.
Fiscal 2008 was a year of significant achievements for Xenos: - We maintained the trend of continued quarterly improvement in financial performance that commenced in fiscal 2007. - We completed development of the Xenos Enterprise Server(TM) and launched this important product on October 1, 2008, the first day of the new fiscal year. - We strengthened our relationships with important industry alliance partners including IBM ECM, EMC Document Sciences and Computer Associates. We continue to extend our channel strategy thereby increasing the market reach for our products and services. - We successfully completed a number of document archive content migrations during the year and have developed a substantial pipeline of opportunities in this space both directly and in conjunction with several of our alliance partners. - The Xenos Integrated Document Solution(TM), an end-to-end data and document processing suite for 1:1 customer correspondence management powered by EMC Document Sciences xPression(R) document production engine, continued to gain market traction. In October Xenos was honoured with the prestigious EMC Document Sciences Partner of the Year Award for 2008.
"Despite the challenges of the current economic environment, we are optimistic about our prospects for fiscal 2009 and for the Xenos Enterprise Server (Xenos ES) in particular," said Stuart Butts, Chairman & CEO. "There are three specific reasons why Xenos ES is a timely product offering. First, enterprises can use Xenos ES to address the IT challenges typically associated with reorganizations, divestitures and mergers and acquisitions. Second, it addresses the strategic challenge of managing the explosive growth in, and convergence of, structured and unstructured data and documents. Third, initially conceived as the route to the paperless office, Xenos ES is a green-enabling solution that allows enterprises to achieve efficient and effective communications while reducing their carbon footprint."
"Furthermore, all of our product and services offerings generate a rapid ROI for our customers and improve operational efficiency, enhance business processes, and increase employee productivity, all key requirements that currently resonate well with our customer and prospect base," added Mr. Butts.
In mid-September, the Company purchased forward contracts to sell U.S. $6,000,000 at an exchange rate of 1.07 CAD. The rate at the date of this press release is 1.225. These contracts, which are not accounted for as hedges, are carried on the balance sheet at their current market value. As a result of this rapid and unexpected depreciation of the Canadian dollar against the U.S. dollar, it is expected that a loss on the marking to market of these contracts will be recorded at the end of the first quarter and adjusted quarterly for the next three quarters as each of the $1,500,000 tranches becomes due. Unfortunately, much of the potentially positive impact of the decline of the Canadian dollar from roughly parity with the U.S. Dollar has been negated for the current fiscal year.
A full update on Xenos' activities, together with Management Discussion and Analysis of the results for fiscal 2008, 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, 2008 2007 2008 2007 (in CDN$000s except per share amounts) Sales 3,803 3,619 15,908 15,073 Gross profit 3,041 2,974 12,489 12,254 EBITDA 649 490 2,118 1,335 Net income (loss) 479 69 1,496 (633) Net income (loss) per share 0.05 0.01 0.15 (0.06) Cash & cash equivalents 8,115 7,357 Cash per Share $0.81 $0.74 Common Shares Outstanding 10,005 9,949 ------------------------------------------------------------------------- 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 Wednesday December 17 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 416-644-3416, or 1-800-732-9307 approximately 10 minutes before the conference call.
The conference can also be heard over the Internet at http://www.xenos.com/. A recording of the conference call will be available through December 24. Please dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21291038# to listen to the rebroadcast. The call will also be archived for 30 days on the Xenos web site at http://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 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 cash equivalents by the number of common shares outstanding.
(C)2008 All rights reserved. Xenos, the Xenos logo, Xenos Enterprise Server, Xenos ES, Xenos Integrated Document Solution, Xenos IDS, 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 Twelve Months Ended September 30 September 30 2008 2007 2008 2007 ----------------------------- --------------------------- Sales $ 3,802,755 $ 3,618,799 $ 15,908,301 $ 15,072,561 Cost of sales 761,365 644,988 3,418,876 2,818,726 --------------- ------------- ------------- ------------- Gross profit 3,041,390 2,973,811 12,489,425 12,253,835 --------------- ------------- ------------- ------------- Expenses Sales and marketing 1,179,768 1,156,160 4,895,248 5,597,991 Research and development 722,415 674,833 3,202,134 2,931,558 Administration and general 463,143 629,789 2,177,384 2,284,754 Reorganization costs - (15,199) - 190,817 Amortization 224,369 295,614 945,188 1,167,798 Stock based compensation 27,195 23,323 96,828 104,979 Interest and bank charges 48,745 11,799 81,124 53,169 --------------- ------------- ------------- ------------- 2,665,635 2,776,319 11,397,906 12,331,066 --------------- ------------- ------------- ------------- Income (loss) before undernoted items 375,755 197,492 1,091,519 (77,231) Interest and other 40,589 63,543 218,332 215,207 Foreign exchange gain (loss) 52,202 (199,882) 240,657 (750,312) --------------- ------------- ------------- ------------- 92,791 (136,339) 458,989 (535,105) --------------- ------------- ------------- ------------- Income (loss) before income taxes 468,546 61,153 1,550,508 (612,336) (Recovery) provision for income taxes (10,759) (7,516) 54,137 20,964 --------------- ------------- ------------- ------------- Net income (loss) $ 479,305 $ 68,669 $ 1,496,371 $ (633,300) --------------- ------------- ------------- ------------- Net income (loss) per common share - Basic $ 0.05 $ 0.01 $ 0.15 $ (0.06) - Diluted $ 0.05 $ 0.01 $ 0.15 $ (0.06) Weighted average number of shares - Basic 9,995,562 9,938,665 - Diluted 10,146,085 9,938,665 ------------------------------------------------------------------------- Deficit, beginning of year $(37,206,488) $(36,573,188) Net income (loss) 1,496,371 (633,300) ------------ ------------- Deficit, end of year (35,710,117) (37,206,488) ------------ ------------- Xenos Group Inc. Consolidated Balance Sheets (Unaudited) As at September 30 September 30 2008 2007 --------------------------- ASSETS CURRENT Cash and cash equivalents $ 8,115,259 $ 7,356,808 Trade receivables 2,471,700 1,727,224 Other receivables 23,767 5,823 Non-hedging financial derivatives 82,524 - Prepaids 597,052 735,873 Income taxes recoverable 26,766 561 ------------- ------------- 11,317,068 9,826,289 LONG TERM Future income taxes 1,193,086 1,157,857 Capital assets 998,436 1,133,965 Intangibles and other assets 1,999,370 1,869,673 ------------- ------------- 4,190,892 4,161,495 ------------- ------------- TOTAL ASSETS $ 15,507,960 $ 13,987,784 ------------- ------------- LIABILITIES CURRENT Payables and accruals $ 2,259,583 $ 2,082,228 Income taxes payable 97,921 15,678 Deferred revenue 3,099,644 3,420,736 Current portion - capital lease 61,170 87,277 ------------- ------------- 5,518,318 5,605,919 LONG TERM Capital lease obligations 2,543 63,713 Deferred revenue 14,812 10,284 Deferred lease inducements 125,734 147,994 ------------- ------------- 143,089 221,991 TOTAL LIABILITIES 5,661,407 5,827,910 SHAREHOLDERS' EQUITY Capital stock 45,125,209 44,997,009 Contributed surplus 431,461 369,353 Deficit (35,710,117) (37,206,488) ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 9,846,553 8,159,874 ------------- ------------- TOTAL LIABILITIES & EQUITY $ 15,507,960 $ 13,987,784 ------------- ------------- Xenos Group Inc. Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Twelve Months Ended September 30 September 30 2008 2007 2008 2007 ---------------------------- --------------------------- Operating activities Net income (loss) $ 479,305 $ 68,669 $ 1,496,371 $ (633,300) Amortization 224,369 295,614 945,188 1,167,798 Unrealized foreign exchange loss (gain) 48,177 (250,407) (13,245) 120,153 Unrealized gain on non-hedging financial derivatives (82,524) - (82,524) - Loss on disposal of capital assets 9,656 1,914 24,527 69,989 Future income taxes (30,758) (500) (35,229) 6,709 Stock based compensation 27,195 23,323 96,828 104,979 Change in non-cash working capital (686,383) (39,548) (729,030) 246,426 --------------- ------------- ------------- ------------- (10,963) 99,065 1,702,886 1,082,754 --------------- ------------- ------------- ------------- Financing activities Bank financing - (500,000) - (500,000) Capital lease payments (20,658) (22,411) (87,277) (84,890) Proceeds on issue of shares - 20,295 93,480 20,295 --------------- ------------- ------------- ------------- (20,658) (502,116) 6,203 (564,595) --------------- ------------- ------------- ------------- Investing activities Purchase of capital assets (30,418) (67,146) (240,872) (171,709) Proceeds on disposal of capital assets 6 - 505 873 Development costs incurred (267,812) (17,278) (723,516) (178,539) --------------- ------------- ------------- ------------- (298,224) (84,424) (963,883) (349,375) --------------- ------------- ------------- ------------- Effect of foreign exchange rate fluctuations on cash and cash equivalents (48,177) 250,407 13,245 (120,153) --------------- ------------- ------------- ------------- Net increase in cash and cash equivalents (378,022) (237,068) 758,451 48,631 Cash and cash equivalents Beginning of period 8,493,281 7,593,876 7,356,808 7,308,177 --------------- ------------- ------------- ------------- End of period $ 8,115,259 $ 7,356,808 $ 8,115,259 $ 7,356,808 --------------- ------------- ------------- -------------
