Xenos Reports Q1 F09 Results
TORONTO, Feb. 12 /CNW/ - Xenos Group Inc. (TSX: XNS) reported revenues of
$4,159,000 for the period ended December 31, 2008 compared to revenues of
$4,149,000 for the fiscal first quarter of last year.
EBITDA for the period was $449,000 compared to $724,600, a decline of 38%
from the same period last year. The decline in EBITDA can largely be
attributed to increased investment in sales and marketing activities
associated with the launch of the Xenos Enterprise Server(TM) (Xenos ES(TM))
on October 1, 2008. Employment levels increased by 6.0% in the first quarter
of fiscal 2009 as compared to last year mainly in the sales and marketing and
product development teams.
Xenos ES is a timely offering as it addresses IT challenges typically
associated with divestures and mergers and acquisitions, all features of the
current economic crisis affecting many of Xenos' customers and potential
customers. Xenos ES implementations enhance the value of business information
by rationalizing disparate and/or legacy technologies, systems and data to
improve enterprise operational efficiency, enhance business processes and
reduce risk for compliance management.
The company recognized a net foreign exchange loss of $624,000 at the end
of the quarter compared with a gain of $47,000 in the corresponding prior
period. At the end of December an unrealized loss of approximately $694,000
was booked as a mark to market loss on forward contracts to sell $4,500,000
U.S. at 1.076 CAD over the next three quarters. Any fluctuation of the
exchange rate from the December 31st rate of 1.2180 will result in an
adjustment to this loss during the course of the fiscal year.
As a result of the foreign exchange loss the Company recorded a net loss
of $377,000 ($0.04) per share for the first quarter compared to net income of
$528,000 or $0.05 per share for the same quarter last year.
During the quarter the company developed a series of powerful
go-to-market solutions based on Xenos Enterprise Server(TM). These include
Xenos Loader(TM) for IBM FileNet P8, and Xenos DSR(TM), Document Storage
Reduction for ECM. Go-to-market solutions are designed to promote the adoption
of the Xenos Enterprise Server platform within organizations. They address
specific business or technical challenges through the packaged application of
Xenos proprietary technology.
Xenos has established a Software as a Service (SaaS) model and recently
began marketing a variety of these offerings. The SaaS model complements
traditional Xenos on-premise license sales by providing core Xenos technology
and Solutions on an on-demand basis. The Xenos SaaS solution integrates
seamlessly with existing corporate back office applications and web presences
providing document transformation, data mapping and translation, hosted
archive and multi-channel eDelivery functionality to meet a variety of unique
business requirements including: customer support representative enablement;
online statement presentment for B2B and B2C; content repurposing and straight
through processing. Xenos SaaS promotes Green IT initiatives by providing
corporations of all sizes the opportunity to address the capital, operational
and environmental costs associated with the exploding digital landfill through
shared infrastructure.
Strategic alliance and industry partnership programs continue to be a
focus of the company.
"Despite the challenging economic environment, we are making good
progress on many fronts," said Stuart Butts, Chairman & CEO, Xenos Group Inc.
"We have recently been recognized by two of our alliance partners for our
significant contributions. In December, Xenos was honoured with the
prestigious EMC Document Sciences Partner of the Year Award for 2008. This
week, Xenos Group was honoured with the IBM Software ValueNet Technology
Partner of the Year Award for 2008, selected from over 50 partners worldwide."
In addition Xenos was named a medalist at the 2008 British Computer
Society (BCS) IT Industry Awards held in January. Xenos was recognized for its
work providing the secure transfer of data over public networks between 3,000
doctors, pharmacies, hospitals and the Norwegian Labour and Welfare
Organization (NAV).
Financial Highlights - (complete statements are attached):
-----------------------------------------------------------
-----------------------------------------------------------
Three Months
-----------------------------------------------------------
Period Ended December 31, 2008 2007
(in CDN$000s except per share
amounts)
Sales 4,159 4,149
Gross profit 3,301 3,287
EBITDA 449 724
Net (loss) income (377) 528
Net (loss) income per share (0.04) 0.05
Cash & cash equivalents 8,330 7,314
Cash per Share $0.83 $0.73
Common Shares Outstanding 10,005 9,999
-----------------------------------------------------------
See discussion of non-GAAP financial measures below.
Annual General Meeting Notice
Xenos will hold its Annual General Meeting of shareholders at 10:00 a.m.
Eastern Time on February 17th, 2009 at the Toronto Stock Exchange Media
Centre. Shareholders and prospective investors are encouraged to attend to
discuss the first quarter financial results, and meet with Management and
members of the Board of Directors. A review of fiscal 2008 and the outlook for
2009 will be presented at the meeting. An audio recording of the meeting will
be available through the Company's website 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 Loader, Xenos DSR, 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 and Deficit
(Unaudited)
Three Months Ended
December 31
2008 2007
-----------------------------------
Sales $ 4,158,651 $ 4,149,334
Cost of sales 857,644 861,912
---------------- ----------------
Gross profit 3,301,007 3,287,422
---------------- ----------------
Expenses
Sales and marketing 1,421,654 1,191,539
Research and development 897,485 778,950
Administration and general 505,691 572,812
Amortization 219,332 271,411
Stock based compensation 27,195 20,567
Interest and bank charges 8,233 11,541
---------------- ----------------
3,079,590 2,846,820
---------------- ----------------
Income before undernoted items 221,417 440,602
Interest and other 46,017 73,440
Foreign exchange (loss) gain (623,546) 47,088
---------------- ----------------
(577,529) 120,528
---------------- ----------------
(Loss) income before income taxes (356,112) 561,130
Provision for income taxes 20,689 33,298
---------------- ----------------
Net (loss) income $ (376,801) $ 527,832
---------------- ----------------
Net (loss) income per common share
- Basic $ (0.04) $ 0.05
- Diluted $ (0.04) $ 0.05
Weighted average number of shares
- Basic 10,005,444 9,969,809
- Diluted 10,005,444 10,057,606
-------------------------------------------------------------------------
Deficit, beginning of year $ (35,710,117) $ (37,206,488)
Net (loss) income (376,801) 527,832
---------------- ----------------
Deficit, end of period $ (36,086,918) $ (36,678,656)
---------------- ----------------
Xenos Group Inc.
Consolidated Balance Sheets
(Unaudited)
December 31 September 30
2008 2008
-----------------------------------
ASSETS
CURRENT
Cash and cash equivalents $ 8,329,729 $ 8,115,259
Trade receivables 2,283,708 2,471,700
Other receivables 22,970 23,767
Non-hedging financial derivatives - 82,524
Prepaids 646,465 597,052
Income taxes recoverable 32,711 26,766
---------------- ----------------
11,315,583 11,317,068
LONG TERM
Future income taxes 1,211,941 1,193,086
Capital assets 986,943 998,436
Intangibles and other assets 2,046,854 1,999,370
---------------- ----------------
4,245,738 4,190,892
---------------- ----------------
TOTAL ASSETS $ 15,561,321 $ 15,507,960
---------------- ----------------
LIABILITIES
CURRENT
Payables and accruals $ 1,979,236 $ 2,259,583
Income taxes payable 95,570 97,921
Deferred revenue 3,176,500 3,099,644
Non-hedging financial derivatives 632,555 -
Current portion - capital lease 48,966 61,170
---------------- ----------------
5,932,827 5,518,318
LONG TERM
Capital lease obligations - 2,543
Deferred revenue 10,588 14,812
Deferred lease inducements 120,959 125,734
---------------- ----------------
131,547 143,089
TOTAL LIABILITIES 6,064,374 5,661,407
SHAREHOLDERS' EQUITY
Capital stock 45,125,209 45,125,209
Contributed surplus 458,656 431,461
Deficit (36,086,918) (35,710,117)
---------------- ----------------
TOTAL SHAREHOLDERS' EQUITY 9,496,947 9,846,553
---------------- ----------------
TOTAL LIABILITIES & EQUITY $ 15,561,321 $ 15,507,960
---------------- ----------------
Xenos Group Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
December 31
2008 2007
-----------------------------------
Operating activities
Net (loss) income $ (376,801) $ 527,832
Amortization 219,332 271,411
Unrealized foreign
exchange (gain) loss (56,327) 27,791
Unrealized loss on non-hedging
financial derivatives 715,079 -
Future income taxes (18,855) 1,461
Stock based compensation 27,195 20,567
Change in non-cash working capital (81,410) (837,903)
---------------- ----------------
428,213 11,159
---------------- ----------------
Financing Activities
Capital lease payments (14,747) (22,941)
Proceeds on issue of shares - 82,830
---------------- ----------------
(14,747) 59,889
---------------- ----------------
Investing activities
Purchase of capital assets (64,384) (14,558)
Development costs incurred (190,939) (71,443)
---------------- ----------------
(255,323) (86,001)
---------------- ----------------
Effect of foreign exchange rate
fluctuations on cash
and cash equivalents 56,327 (27,791)
---------------- ----------------
Net increase (decrease) in cash
and cash equivalents 214,470 (42,744)
Cash and cash equivalents
Beginning of period 8,115,259 7,356,808
---------------- ----------------
End of period $ 8,329,729 $ 7,314,064
---------------- ----------------
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
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