Xplore Reports Q2 '08 Results



    TSX-XPL

    AUSTIN, TX, Nov. 13 /CNW/ - Xplore Technologies Corp. (TSX: XPL)
("Xplore" or the "Company"), a leading rugged mobile computer provider,
reported today results of operations for its second quarter ended
September 30, 2007.

    Financial Results of Operations
    -------------------------------
    Revenue for the three months ended September 30, 2007 and 2006 was
approximately $5,187,000 and $8,660,000, respectively, and for the six months
ended September 30, 2007 and 2006 was approximately $12,909,000 and
$17,839,000, respectively. Current year revenue decreased over the prior year
revenue by approximately 40% for the three months ended principally due to a
42% decline in unit sales and 28% for the six months ended resulting from a
32% decline in unit sales partially offset by 4% and 6% improvement in average
selling price for the three and six months ended September 30, 2007,
respectively. The Company is developing numerous new products, including a
rugged notebook PC, as well as the next generation of its iX Tablet PC.
Management believes these products will be available in 2008 and should enable
the Company, through their introduction, to resume the growth of its revenues.
    Gross profit for the three months ended September 30, 2007 and 2006 was
approximately $1,623,000 and $2,414,000, respectively, and gross profit as a
percent of revenue for those periods were 31.1% and 27.9%, respectively. Gross
profit for the six months ended September 30, 2007 and 2006 was approximately
$3,928,000 and $4,922,000, respectively, and gross profit as a percent of
revenue for those periods was 30.4% and 27.6%, respectively. The improvement
in gross profit as a percentage of revenue for the three and six months ended
September 30, 2007 as compared to the prior corresponding period was
attributable to the cost reduction initiatives principally related to
component pricing and freight.
    Operating expenses for the three months ended September 30, 2007 and 2006
were approximately $3,298,000 and $3,132,000, respectively, and for the six
months ended September 30, 2007 and 2006 were approximately $6,705,000 and
$6,106,000, respectively. The increase was principally due to the
non-recurring costs associated with our corporate migration to the United
States of $345,000 and an increase in engineering development costs of
$564,000 related to the development of future products, including a rugged
notebook. In addition, the Company had non-cash charges related to employee
stock compensation of $480,000 and a $190,000 non-cash charge relating to the
value assigned to warrants issued for strategic and financial advisory
services. These increases were offset by the reduction of variable costs
directly related to the decline in revenue that include commission expense and
marketing development fund co-op expenses.
    The Company's net loss was approximately $1,751,000 ($0.03 per share) and
$752,000 ($0.01 per share) for the three months ended September 30, 2007 and
2006, respectively, and approximately $2,858,000 ($0.04 per share) and
$3,395,000 ($0.06 per share) for the six months ended September 30, 2007 and
2006, respectively.

    Financings
    ----------
    During the three months ended, September 30, 2007, the Company completed
a private placement raising total gross proceeds of approximately $7,387,000
and issuing 14,774,000 shares of its Series C Convertible Preferred Stock and
warrants to purchase 7,387,000 shares of common stock. Also on August 8, 2007,
the Company's remaining debenture with an outstanding principal balance of
$250,000 was exchanged for 500,000 shares of Series C Preferred Stock and
warrants to purchase 250,000 shares of common stock.
    The financial data is presented in accordance with U.S. GAAP. The prior
year financial statements attached to this press release have been restated as
discussed in our Form 10-K filed on June 27, 2007.

    About Xplore Technologies(R)

    Xplore Technologies Corp, founded in 1996, is engaged in the business of
the development, integration and marketing of rugged mobile wireless PC
computing systems. Xplore, whose common shares are listed for trading on the
Toronto Stock Exchange under the symbol TSX: XPL, has offices in Austin, Texas
and Helsinki, Finland. Its rugged iX104(TM) family of hardware solutions
incorporate award winning technology, and are designed based on years of
customer design input. Xplore's diverse customer base comes from the public
safety, retail and wholesale warehousing, utility, military, field service and
transportation industries. Xplore hardware solutions are available from Xplore
or one of its authorized channel partners, for more information, visit
www.xploretech.com.

    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.

    Xplore Technologies is a registered trademark of Xplore Technologies
    Corporation of America. iX104, iX104R, iX104T, Renegade, All Terrain,
    iX104C(2) are trademarks of Xplore Technologies Corporation of America.
    All other tradenames, marked or not, are the sole property of their
    respective owners.

    -------------------------------------------------------------------------
    This news release contains forward-looking statements that involve risks
    and uncertainties, which may cause actual results to differ materially
    from the statements made. When used in this document, the words "may",
    "would", "could", "will", "intend", "plan", "anticipate", "believe",
    "estimate", "expect" and similar expressions are intended to identify
    forward-looking statements. Such statements reflect Xplore's current
    views with respect to future events and are subject to such risks and
    uncertainties. Many factors could cause actual results to differ
    materially from the statements made including those factors detailed from
    time to time in filings made by Xplore with securities regulatory
    authorities. Should one or more of these risks or uncertainties
    materialize, or should assumptions underlying the forward looking
    statements prove incorrect, actual results may vary materially from those
    described herein as intended, planned, anticipated or expected. Xplore
    does not intend and does not assume any obligation to update these
    forward-looking statements.
    -------------------------------------------------------------------------


    
    XPLORE TECHNOLOGIES CORP.
    Consolidated Balance Sheets
    (in thousands of U.S. dollars)
    -------------------------------------------------------------------------

                                                  September 30,    March 31,
                                                  -------------  ------------
                                                      2007           2007
                                                  -------------  ------------
                                   ASSETS          (unaudited)
                                   ------
    CURRENT ASSETS:
      Cash and cash equivalents                    $     6,626   $     1,711
      Accounts receivable                                3,397         4,408
      Inventory                                          4,100         3,639
      Prepaid expenses and other current assets            871           771
                                                  -------------  ------------
                                                        14,994        10,529
    Fixed assets, net                                      533           585
    Deferred charges                                       549             -
                                                  -------------  ------------
                                                   $    16,076   $    11,114
                                                  -------------  ------------
                                                  -------------  ------------

                    LIABILITIES AND SHAREHOLDERS' EQUITY
                    ------------------------------------

    CURRENT LIABILITIES:
      Accounts payable and accrued liabilities     $     4,191   $     5,319
      Bank indebtedness                                  1,405             -
                                                  -------------  ------------
    Total current liabilities                            5,596         5,319
    Debenture                                                -           250
                                                  -------------  ------------
                                                         5,596         5,569
                                                  -------------  ------------
    Commitments and contingencies

    SHAREHOLDERS' EQUITY:
      Series A Preferred Stock, par value
       $0.001 per share; authorized 64,000;
       shares issued 63,473                                 63            63
      Series B Preferred Stock, par value
       $0.001 per share; authorized 10,000;
       shares issued 9,989                                  10            10
      Series C Preferred Stock, par value
       $0.001 per share; authorized 20,000;
       shares issued 15,274                                 15             -
      Common Stock, par value $0.001 per share;
       authorized 300,000; shares issued
       65,941 and 64,099, respectively                      66            64
      Additional paid-in capital                       106,901        98,469
      Accumulated other comprehensive loss              (1,130)       (1,104)
      Accumulated deficit                              (95,445)      (91,957)
                                                  -------------  ------------
                                                        10,480         5,545
                                                  -------------  ------------
                                                   $    16,076   $    11,114
                                                  -------------  ------------
                                                  -------------  ------------



    XPLORE TECHNOLOGIES CORP.
    Consolidated Statements of Loss - Unaudited
    (in thousands of U.S. dollars, except loss per common share)
    -------------------------------------------------------------------------

                                    Three Months Ended     Six Months Ended
                                  --------------------- ---------------------
                                  September  September  September  September
                                   30, 2007   30, 2006   30, 2007   30, 2006
                                  ---------- ---------- ---------- ----------
                                             (Restated)            (Restated)

    Revenue                        $  5,187   $  8,660   $ 12,909   $ 17,839
    Cost of revenue                   3,564      6,246      8,981     12,917
                                  ---------- ---------- ---------- ----------
    Gross profit                      1,623      2,414      3,928      4,922
                                  ---------- ---------- ---------- ----------
    Expenses:
    Sales, marketing and support      1,135      1,553      2,364      3,127
    Product research, development
     and engineering                    858        641      1,656      1,241
    General administration            1,305        938      2,685      1,738
                                  ---------- ---------- ---------- ----------
                                      3,298      3,132      6,705      6,106
                                  ---------- ---------- ---------- ----------
    Loss from operations             (1,675)      (718)    (2,777)    (1,184)
                                  ---------- ---------- ---------- ----------
    Other expenses:
    Interest expense                    (33)       (33)       (48)    (1,375)
    Loss on extinguishment of debt        -          -          -       (832)
    Other                               (43)        (1)       (33)        (4)
                                  ---------- ---------- ---------- ----------
                                        (76)       (34)       (81)    (2,211)
                                  ---------- ---------- ---------- ----------
    Net loss                       $ (1,751)  $   (752)  $ (2,858)  $ (3,395)

    Deemed dividends related to
     beneficial conversion feature
     of convertible Preferred
     Shares                          (1,149)    (2,880)    (1,149)    (3,381)
    Dividends attributable to
     Preferred Shares                  (326)      (288)      (640)      (368)
                                  ---------- ---------- ---------- ----------
    Net loss attributable to
     common shareholders             (3,226)    (3,920)    (4,647)    (7,144)
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Loss per common share             (0.03)     (0.01)     (0.04)     (0.06)
    Deemed dividends related to
     beneficial conversion
     feature of convertible
     Preferred Shares                 (0.02)     (0.05)     (0.02)     (0.06)
    Dividends attributable to
     Preferred Shares                     -      (0.01)     (0.01)     (0.01)
                                  ---------- ---------- ---------- ----------
    Loss per share attributable
     to common shareholders        $  (0.05)  $  (0.07)  $  (0.07)  $  (0.13)
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    Weighted average number of
     common shares outstanding       65,215     58,155     64,720     58,006
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------



    XPLORE TECHNOLOGIES CORP.
    Consolidated Statements of Cash Flows - Unaudited
    (in thousands of U.S. dollars)
    -------------------------------------------------------------------------

                                    Three Months Ended     Six Months Ended
                                       September 30,         September 30,
                                  --------------------- ---------------------
                                     2007       2006       2007       2006
                                  ---------- ---------- ---------- ----------
                                             (Restated)            (Restated)
    CASH FLOWS FROM OPERATING
     ACTIVITES:
    Cash used in operations:
      Net loss                     $ (1,751)  $   (752)  $ (2,858)  $ (3,395)
      Items not affecting cash:
        Depreciation and
         amortization                    96        109        245        221
        Amortization of deferred
         financing costs                  -          -          -        979
        Loss on extinguishment
         of debt                          -          -          -        832
        Stock-based compensation
         expense                        252        233        480        293
        Equity instruments issued
         in exchange for services       225         23        257         40
      Changes in operating assets
       and liabilities:
        Accounts receivable             423        238      1,011       (851)
        Inventory                       429     (2,113)      (461)    (2,250)
        Prepaid expenses and other
         current assets                (371)       349       (100)       699
        Accounts payable and
         accrued liabilities         (2,789)       870     (1,191)     1,315
                                  ---------- ---------- ---------- ----------
          Net cash used in
           operating activities      (3,486)    (1,043)    (2,617)    (2,117)
                                  ---------- ---------- ---------- ----------

    CASH FLOWS FROM INVESTING
     ACTIVITIES:
      Additions to fixed assets         (99)      (199)      (193)      (295)
                                  ---------- ---------- ---------- ----------
          Net cash used in
           investing activities         (99)      (199)      (193)      (295)
                                  ---------- ---------- ---------- ----------

    CASH FLOWS FROM FINANCING
     ACTIVITIES:
      Proceeds from bank borrowings   4,750      3,900      4,750     12,825
      Repayment of bank
       indebtedness                  (3,345)    (5,811)    (3,345)   (14,497)
      Proceeds on issuance of
       debentures                         -          -          -      1,000
      Proceeds on issuance of
       Common Shares                      -        944          -        944
      Net proceeds from issuance of
       Series A Preferred Shares          -      1,815          -      2,251
      Net proceeds from issuance of
       Series B Preferred Shares          -      2,908          -      2,908
      Net proceeds from issuance of
       Series C Preferred Shares      6,320          -      6,320          -
      Proceeds from exercise of
       warrants                           -          -          -        130
                                  ---------- ---------- ---------- ----------
          Net cash provided by
           financing activities       7,725      3,756      7,725      5,561
                                  ---------- ---------- ---------- ----------
    CHANGE IN CASH AND CASH
     EQUIVALENTS                      4,140      2,514      4,915      3,149
    CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                2,486        691      1,711         56
                                  ---------- ---------- ---------- ----------
    CASH AND CASH EQUIVALENTS,
     END OF YEAR                   $  6,626   $  3,205   $  6,626   $  3,205
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    SUPPLEMENTAL DISCLOSURE OF
     CASH FLOWS:
      Payments for interest        $     54   $     30   $     69   $    247
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
      Payments for income taxes    $      -   $      -   $      -   $      -
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    

    %SEDAR: 00004707E




For further information:

For further information: Xplore Contact Information: Xplore: For Media
or U.S. Investor Information Contact: Martin Janis & Company, Inc., Beverly
Jedynak, Tel: (312) 943-1100, Email: b.jedynak-janispr@worldnet.att.net

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XPLORE TECHNOLOGIES CORP.

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