TORONTO, Aug. 15 /CNW/ - Hosted Data Transaction Solutions Inc. ("HDX")
announced today its financial results for the three-month period ending
June 30, 2008. HDX (formerly Dexit Inc.) is listed on the TSX under the symbol
Paul Howell, President and CEO reports:
The 2nd quarter of 2008 was the first full quarter of combined operations
for HDX's newly acquired businesses. Our business activity and financial
results are positive indicators of our company's continued growth.
Company revenue for the quarter increased to $2,009,890 and income
including all cash operating expenses was $44,891 for the Q2-2008. This does
not include non-cash expenses realized for stock options granted and the
depreciation of intangible assets.
During the second quarter, cash increased to $1,883,579 from $1,356,371
in Q1-2008. Cash-flow from operations resulted in a net-cash "inflow" of
$586,025, vs. a net-cash "out-flow" from operations of ($529,402) in Q1-2008
and ($689,537) in Q2-2007.
The company has accrued deferred revenue of $838,137 representing
recurring contract revenue that was not realized as revenue in the quarter.
From January 1st 2008 to the time of this press release, annualized cost
reductions of over $500,000 have been achieved. The Dexit office at 1 Richmond
Street continue to be marketed for sublease and this will result in a further
annual reduction of more than $250,000 for a total projected annual reduction
of over $750,000.
The company realized a non-cash expense of $185,733 for the quarter
related to the depreciation of intangible assets acquired and $12,349 related
to depreciation of PP&E (property, plant, and equipment). The total PP&E
depreciation for Q2-2007 was $36,727.
The company also realized a non-cash expense of $174,018 for the quarter
for stock-based compensation for stock options granted to the Board of
Directors. This compensation is for services rendered during 2007 and the 1st
and 2nd quarter of 2008. Stock-based compensation expense realized in Q2-2007
With the inclusion of the above noted non-cash expenses, the company
posted a Net Loss of $327,209 for the quarter.
The HDX team achieved sales success with national and international
multi-site clients in the quarter. Management continued to focus on merging
teams and aligning the efforts of our acquired entities. We have implemented
further cost reductions, continued to develop new technology products, and
aggressively market HDX products and services to new and existing customers.
Coupled with organic growth, the company intends to acquire synergistic
organizations and continues to investigate potential acquisitions. Preliminary
discussions are underway with a number of potential acquisitions although none
are specifically named at this time
HDX develops, sells, deploys, and supports solutions for:
- Integrated Payment Systems including RFID Gift Card
- Touch Screen and Mobile Wireless POS Systems for Quick Service and
- Self Serve Customer Kiosks
- Mobile Wireless POS Terminals
- Integrated Digital Video Surveillance and Recording Systems
- Electronic cash registers
- Web enabled business intelligence applications
The growth potential of HDX is positive and the Company has adequate cash
and cash equivalents to grow and operate efficiently.
Quarterly Highlights and Summary
- Revenue was $2,009,890 for the three months ended June 30, 2008,
compared to $517,345 for the three months ended June 30, 2007;
- Deferred revenue, which represents annual recurring revenues that
have not yet been recognized as revenue, was $838,137 compared to
$211 for the three months ended June 30, 2007;
- Gross margin was $1,261,173 for the three months ended June 30, 2008,
compared to $501,914 for the three months ended June 30, 2007;
- EBITDA loss (Earnings before interest taxes depreciation and
amortization) for the three months ended June 30, 2008, was $176,564
compared to a an EBITDA profit of $30,733 for the three months ended
June 30, 2007; This includes expenses of $174,018 related to option
granted during the quarter. The Options Policy was approved at the
June 2007 AGM and the options were granted on May 20th 2008 as
payment for Directors fees for 2007 and Q1 and Q2 2008.
- HDX's cash, cash equivalents and short term investments totaled
$1,883,579 as at June 30, 2008; and
- Net income (loss) which includes amortization charges of $198,082 for
acquired assets was $327,209 compared to a net profit of $19,105 for
the three months ended June 30, 2007.
On behalf of our Chairman, John McBride, the Board of Directors, and the
dedicated team of professionals at HDX, I thank our shareholders for your
continued support of our growing company.
President and CEO
This discussion includes certain forward-looking statements that are
based upon current expectations, which involve risks and uncertainties
associated with our business and the environment in which the business
operates. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking, including those
identified by the expressions "anticipate", "believe", "plan", "estimate",
"expect", "intend", and similar expressions to the extent they relate to the
Company or its management. The forward-looking statements are not historical
facts, but reflect Hosted Data Transaction Solution's (formerly Dexit's)
current expectations regarding future results or events. These forward-looking
statements are subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current expectations,
including the matters discussed under "Risks and Uncertainties" in the Annual
Information Form filed on March 31, 2008 with the regulatory authorities.
Hosted Data Transaction Solutions Inc. (formerly Dexit) assumes no obligation
to update the forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward-looking statements.
(R) Registered trade-mark of Hosted Data Transaction Solutions Inc.
(formerly Dexit Inc.)
For further information:
For further information: Paul Howell, President and CEO, Hosted Data
Transaction Solutions Inc. (HDX), (416) 703-6462, extension 263