Xenos Earns $0.12 in F09, Earns $0.07 in Q4

TORONTO, Dec. 18 /CNW/ - Xenos Group Inc. (TSX:XNS) today reported on its unaudited financial results for the year which recorded year-over-year increases in revenues and earnings for the fiscal 2009 fourth quarter and record revenues for the full year.

For the three months ended September 30, 2009, Xenos revenues increased 19% to $4,521,000 as compared to revenues of $3,803,000 for the same period in 2008. The fourth quarter of fiscal 2009 represents more than three straight years of consistent year-over-year quarterly revenue growth.

For the twelve months ended September 30, 2009, Xenos reported revenues of $17,247,000, EBITDA of $2,449,000 and net income of $1,197,000, or $0.12 per share, as compared to revenues of $15,908,000, EBITDA of $2,118,000 and net income of $1,496,000, or $0.15 per share, for the twelve months of fiscal 2008 respectively.

"It is particularly gratifying to report record corporate revenues and significant profitability during a year in which we launched a new product in a very challenging economic environment," said Stu Butts, Chairman & CEO of Xenos Group Inc.

Total expenses in the fourth quarter were $3,338,000 as compared to $2,666,000 for the fourth quarter of fiscal 2008. Sales and marketing expenses increased 19% as a result of sales force expansion and increased marketing expenses related to the Xenos Enterprise Server(TM) (ES).

Gross margin in the quarter increased to 86% as compared to 80% in the same quarter of fiscal 2008. Gross margins have been benefiting from an increase in Xenos licensed product revenues. Xenos Enterprise Server (ES), released near the end of fiscal 2008 has been a successful product offering throughout fiscal 2009 in a variety of different markets.

Research and development expenses in the quarter increased 45% year-over-year to $1,045,000 from $722,000, reflecting Xenos' ongoing commitment to its industry leading technology.

EBITDA for the period increased 16% to $751,000, as compared to $649,000 in the same period in 2008.

Xenos reported net income of $683,000 or $0.07 per share, a 42% increase as compared to net income of $479,000 or $0.05 per share in the fourth quarter of fiscal 2008.

Comparative results and revenues continue to be impacted by gyrations in the value of the Canadian dollar against major trading currencies, particularly the US dollar. Xenos incurred a foreign exchange loss of $419,000 for the fiscal year compared to a gain of $241,000 in fiscal 2008.

At September 30, 2009, Xenos held cash of $9,311,000 or $0.93 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.

On December 8, 2009, Xenos entered into an agreement to be acquired by Actuate Corporation. An outline of the transaction was described in a press release of that date, which can be accessed through our website. Details of the Offer and materials relating to the transaction are expected to be mailed to shareholders the week of December 20, 2009.

A full update on Xenos' activities, together with Management Discussion and Analysis of the results for fiscal 2009, will be provided with the audited financial statements filed on www.SEDAR.com later in December.

Financial Highlights - (complete statements are attached):

    
    -------------------------------------------------------------------------
                                            Three Months       Twelve months
    -------------------------------------------------------------------------
    Period Ended September 30,            2009      2008      2009      2008
    (in CDN$000s except per
     share amounts)

    Sales                                4,521     3,803    17,247    15,908
    Gross profit                         3,872     3,041    14,399    12,489
    EBITDA                                 751       649     2,449     2,118
    Net income                             683       479     1,197     1,496
    Net income per share                  0.07      0.05      0.12      0.15
    Cash & cash equivalents              9,311     8,115
    Cash per Share                       $0.93     $0.81
    Common Shares Outstanding           10,005    10,005
    -------------------------------------------------------------------------
    

See discussion of non-GAAP financial measures below.

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 ePresentment, 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         Twelve Months Ended
                              September 30                September 30
                           2009          2008          2009          2008
                      --------------------------- ---------------------------

    Sales             $  4,520,634  $  3,802,755  $ 17,246,526  $ 15,908,301
    Cost of sales          648,512       761,365     2,847,985     3,418,876
                      ------------- ------------- ------------- -------------
    Gross profit         3,872,122     3,041,390    14,398,541    12,489,425
                      ------------- ------------- ------------- -------------
    Expenses
      Sales and
       marketing         1,405,679     1,179,768     5,828,834     4,895,248
      Research and
       development       1,045,225       722,415     3,835,560     3,202,134
      Administration
       and general         644,924       463,143     2,180,526     2,177,384
      Amortization         199,190       224,369       823,784       945,188
      Stock based
       compensation         25,306        27,195       104,346        96,828
      Interest and
       bank charges         17,660        48,745        44,674        81,124
                      ------------- ------------- ------------- -------------
                         3,337,984     2,665,635    12,817,724    11,397,906
                      ------------- ------------- ------------- -------------

    Income before
     undernoted items      534,138       375,755     1,580,817     1,091,519

    Interest and other       6,066        40,589        90,489       218,332
    Foreign exchange
     gain (loss)           163,924        52,202      (419,312)      240,657
                      ------------- ------------- ------------- -------------
                           169,990        92,791      (328,823)      458,989
                      ------------- ------------- ------------- -------------

    Income before
     income taxes          704,128       468,546     1,251,994     1,550,508

    Provision (recovery)
     for income taxes       21,187       (10,759)       54,499        54,137
                      ------------- ------------- ------------- -------------

    Net income        $    682,941  $    479,305  $  1,197,495  $  1,496,371
                      ------------- ------------- ------------- -------------

    Net income per
     common share
      - Basic         $       0.07  $       0.05  $       0.12  $       0.15
      - Diluted       $       0.07  $       0.05  $       0.12  $       0.15

    Weighted average
     number of shares
      - Basic                                       10,005,444     9,995,562
      - Diluted                                     10,101,916    10,146,085

    -------------------------------------------------------------------------

    Deficit, beginning
     of year                                      $(35,710,117) $(37,206,488)

    Net income                                       1,197,495     1,496,371
                                                  ------------- -------------

    Deficit, end of year                           (34,512,622)  (35,710,117)
                                                  ------------- -------------



    Xenos Group Inc.
    Consolidated Balance Sheets
    (Unaudited)

                                                             As at
                                                  September 30  September 30
                                                       2009          2008
                                                  ---------------------------
    ASSETS
      CURRENT
        Cash and cash equivalents                 $  9,311,112  $  8,115,259
        Trade receivables                            2,876,941     2,471,700
        Other receivables                               23,260        23,767
        Non-hedging financial derivatives              480,395        82,524
        Prepaids                                       644,872       597,052
        Income taxes recoverable                        25,837        26,766
                                                  ------------- -------------
                                                    13,362,417    11,317,068
      LONG TERM
        Future income taxes                          1,191,797     1,193,086
        Capital assets                                 877,214       998,436
        Intangibles and other assets                 2,082,578     1,999,370
                                                  ------------- -------------
                                                     4,151,589     4,190,892
                                                  ------------- -------------

    TOTAL ASSETS                                  $ 17,514,006  $ 15,507,960
                                                  ------------- -------------

    LIABILITIES
      CURRENT
        Payables and accruals                     $  2,418,300  $  2,259,583
        Income taxes payable                           122,056        97,921
        Deferred revenue                             3,679,136     3,099,644
        Current portion - capital lease                  2,543        61,170
                                                  ------------- -------------
                                                     6,222,035     5,518,318
      LONG TERM
        Capital lease obligations                            -         2,543
        Deferred revenue                                36,942        14,812
        Deferred lease inducements                     106,635       125,734
                                                  ------------- -------------
                                                       143,577       143,089

    TOTAL LIABILITIES                                6,365,612     5,661,407

    SHAREHOLDERS' EQUITY
        Capital stock                               45,125,209    45,125,209
        Contributed surplus                            535,807       431,461
        Deficit                                    (34,512,622)  (35,710,117)

                                                  ------------- -------------
    TOTAL SHAREHOLDERS' EQUITY                      11,148,394     9,846,553
                                                  ------------- -------------

    TOTAL LIABILITIES & EQUITY                    $ 17,514,006  $ 15,507,960
                                                  ------------- -------------



    Xenos Group Inc.
    Consolidated Statements of Cash Flows
    (Unaudited)

                           Three Months Ended         Twelve Months Ended
                              September 30                September 30
                           2009          2008          2009          2008
                      --------------------------- ---------------------------

    Cash derived from
     (applied to)

    Operating
     activities
      Net income      $    682,941  $    479,305  $  1,197,495  $  1,496,371
      Amortization         199,190       224,369       823,784       945,188
      Unrealized
       foreign exchange
       loss (gain)         191,776        48,177       138,315       (13,245)
      Unrealized gain
       on non-hedging
       financial
        derivatives       (536,167)      (82,524)     (397,871)      (82,524)
      Loss on disposal
       of capital assets         -         9,656           406        24,527
      Future income
       taxes                15,242       (30,758)        1,289       (35,229)
      Stock based
       compensation         25,306        27,195       104,346        96,828
      Change in non-cash
       working capital    (615,116)     (686,383)      313,750      (729,030)
                      ------------- ------------- ------------- -------------
                           (36,828)      (10,963)    2,181,514     1,702,886
                      ------------- ------------- ------------- -------------
    Financing
     activities
      Capital lease
       payments            (15,848)      (20,658)      (61,170)      (87,277)
      Proceeds on
       issue of shares           -             -             -        93,480
                      ------------- ------------- ------------- -------------
                           (15,848)      (20,658)      (61,170)        6,203
                      ------------- ------------- ------------- -------------
    Investing
     activities
      Purchase of
       capital assets      (19,445)      (30,418)     (204,080)     (240,872)
      Proceeds on
       disposal of
       capital assets            -             6             -           505
      Development
       costs incurred     (121,028)     (267,812)     (582,096)     (723,516)
                      ------------- ------------- ------------- -------------
                          (140,473)     (298,224)     (786,176)     (963,883)
                      ------------- ------------- ------------- -------------
    Effect of foreign
     exchange rate
     fluctuations on
     cash and cash
     equivalents          (191,776)      (48,177)     (138,315)       13,245
                      ------------- ------------- ------------- -------------

    Net (decrease)
     increase in cash
     and cash
     equivalents          (384,925)     (378,022)    1,195,853       758,451

    Cash and cash
     equivalents
      Beginning of
       period            9,696,037     8,493,281     8,115,259     7,356,808
                      ------------- ------------- ------------- -------------
      End of period   $  9,311,112  $  8,115,259  $  9,311,112  $  8,115,259
                      ------------- ------------- ------------- -------------
    

SOURCE XENOS GROUP INC.

For further information: 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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