Xenos Reports Third Quarter Results



    TORONTO, Aug. 8 /CNW/ - Xenos Group Inc. (TSX:XNS), today reported
financial results for the third quarter and first nine months of its fiscal
2007 year.
    Xenos revenues for the third quarter ended June 30, 2007 rose to
$3,803,000 as compared to revenues of $3,767,000 for the same quarter last
year. Revenues for the nine months ended June 30, 2007 were $11,454,000 as
compared to $10,514,000 for the first nine months of fiscal 2007.
    Xenos reported a significantly improved EBITDA of $385,000 for its third
quarter as compared to negative EBITDA of $786,000 for the third quarter ended
June 30, 2006.
    This improvement, in part reflects the corporate reorganization
undertaken in the second quarter that put Xenos on a solid footing for
profitable growth. Total expenses were reduced by 30% to $3,024,000, from
$4,326,000 in the third quarter of fiscal 2006. Year over year sales and
marketing expenses were reduced to $1,512,000 from $2,716,000.
    Xenos third quarter results were significantly impacted by the material
decline of the U.S. dollar (7.7%) and UK pound sterling (6.0%) against the
Canadian dollar during the quarter.
    The bulk of Xenos revenues are denominated in these currencies and
constitute a significant portion of our balance sheet items. As a result,
revenues were lower than they would have been on a constant currency basis and
we were forced to take a significant write-down of foreign denominated assets
(principally cash and receivables) at the end of the quarter. This write-down
represents the bulk of the foreign exchange loss of $523,220 recorded in the
financial statements.
    The Company reported a third quarter net loss of $378,000, or ($0.04) per
share, compared with a net loss of $1,374,000, or ($0.14) per share, for the
third quarter of fiscal 2006.
    As previously announced, an ECM migration project (valued at
approximately US$700,000) signed late in the quarter, did not generate revenue
in Q3, but represents an important win that will come into revenue in Q4 and
Q1 of 2008.
    "Stakeholders should not allow the currency issue to mask the very real
improvement in operating results and outlook accomplished over the past three
quarters," said Stuart Butts, Chairman & CEO.
    At June 30, 2007, Xenos reported no significant long-term debt and held
cash of $7,594,000, or $0.76 per common share, an increase from $7,308,000, or
$0.74 per common share at September 30, 2006.


    
    Financial Highlights - (complete statements are attached):
    -------------------------------------------------------------------------
                                         Three Months          Nine Months
    -------------------------------------------------------------------------
    Period Ended June 30,              2007       2006       2007       2006
    (in CDN$000s except
     per share amounts)
    Sales                             3,803      3,767     11,454     10,514
    Gross profit                      3,105      3,196      9,280      8,733
    EBITDA                              385       (786)       845     (2,929)
    Net (loss) income                  (378)    (1,374)      (702)    (4,035)
    Net (loss) income
     per share                        (0.04)     (0.14)     (0.07)     (0.41)
    Cash & short-term
     investments                      7,594      8,897
    Cash per Share                    $0.76      $0.90
    Common Shares Outstanding         9,937      9,937
    -------------------------------------------------------------------------

    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 today 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 416-644-3427, or 1-800-796-7558 approximately 10 minutes before
the conference call.
    The conference can also be heard over the Internet at www.xenos.com.
    A recording of the conference call will be available through August 15.
Please dial 1-877-289-8525 and enter the reservation number 21242765 followed
by the number sign to listen to the rebroadcast. The call will also be
archived for 30 days on the Xenos web site at www.xenos.com.

    About Xenos

    Xenos (TSX: XNS) high-performance data and document management solutions
provide organizations with a powerful competitive advantage-adaptability.
Xenos powers information supply chains-without re-engineering-by transforming
and repurposing both static and transactional information.
    Xenos solutions increase the efficiency, agility and accountability of
organizations worldwide across a wide variety of industries including
financial services, insurance, healthcare, telecommunications, manufacturing,
logistics, transportation, retail and government sectors. Xenos has offices in
Canada, the United States, the United Kingdom and France and sells and
supports its solutions directly and through a global network of resellers and
partners. For more information, visit www.xenos.com
    Xenos trades on the Toronto Stock Exchange under the trading symbol
'XNS.' 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 short term investments by the number of common shares outstanding.
    For further information, visit www.xenos.com

    (C) 2007 Xenos Group Inc. All rights reserved.



    
    Xenos Group Inc.
    Consolidated Statements of Operations
    (Unaudited)

                            Three Months Ended             Nine Months Ended
                                 June 30                       June 30
                           2007           2006           2007           2006
                  ----------------------------- -----------------------------

    Sales         $   3,802,513  $   3,767,266  $  11,453,762  $  10,514,057
    Cost of sales       697,680        571,673      2,173,738      1,780,858
                  -------------- -------------- -------------- --------------
    Gross profit      3,104,833      3,195,593      9,280,024      8,733,199
                  -------------- -------------- -------------- --------------
    Expenses
      Sales and
       marketing      1,512,019      2,716,212      4,441,831      7,373,399
      Research and
       development      689,854        800,531      2,256,725      2,508,571
      Administration
       and general      496,187        425,313      1,654,965      1,690,344
      Reorganization
       costs                  -              -        206,016              -
      Amortization      292,070        333,702        872,184        886,976
      Stock based
       compensation      21,536         39,104         81,656         89,792
      Interest and
       bank charges      12,780         11,525         41,370         37,173
                  -------------- -------------- -------------- --------------
                      3,024,446      4,326,387      9,554,747     12,586,255
                  -------------- -------------- -------------- --------------

    Income (loss)
     before undernoted
     items               80,387     (1,130,794)      (274,723)    (3,853,056)

    Interest and other   71,668         81,661        151,664        240,088
    Foreign exchange
     (loss) gain       (523,220)       (43,833)      (550,430)        75,560
                  -------------- -------------- -------------- --------------
                       (451,552)        37,828       (398,766)       315,648
                  -------------- -------------- -------------- --------------

    Loss before
     income taxes      (371,165)    (1,092,966)      (673,489)    (3,537,408)

    Provision for
     income taxes         6,724        281,012         28,480        497,531
                  -------------- -------------- -------------- --------------

    Net loss      $    (377,889) $  (1,373,978) $    (701,969) $  (4,034,939)
                  -------------- -------------- -------------- --------------

    Net loss per
     common share
      - Basic     $       (0.04) $       (0.14) $       (0.07) $       (0.41)
      - Fully
         diluted  $       (0.04) $       (0.14) $       (0.07) $       (0.41)

    Weighted average
     number of shares
      - Basic                                       9,936,944      9,936,188
      - Fully diluted                               9,936,944      9,936,188
    -------------------------------------------------------------------------
    Deficit, beginning of year                  $ (36,573,188) $ (24,603,941)

    Net loss                                         (701,969)    (4,034,939)
                                                -------------- --------------

    Deficit, end of period                        (37,275,157)   (28,638,880)
                                                -------------- --------------



    Xenos Group Inc.
    Consolidated Balance Sheets
    (Unaudited)

                                                            As at
                                                      June 30   September 30
                                                         2007           2006
                                               ------------------------------

    ASSETS
      CURRENT
        Cash and short term investments         $   7,593,876  $   7,308,177
        Trade receivables                           2,245,243      2,103,212
        Other receivables                              15,233          3,085
        Prepaids                                      536,272        689,491
        Income taxes recoverable                       11,316          7,204
                                               --------------- --------------
                                                   10,401,940     10,111,169
    LONG TERM
      Future income taxes                           1,157,357      1,164,566
      Capital assets                                1,170,000      1,346,041
      Intangibles and other assets                  2,046,742      2,470,274
                                               --------------- --------------
                                                    4,374,099      4,980,881
                                               --------------- --------------

    TOTAL ASSETS                                $  14,776,039  $  15,092,050
                                               --------------- --------------

    LIABILITIES
      CURRENT
        Bank indebtedness                       $     500,000  $     500,000
        Payables & accruals                         1,834,048      2,307,340
        Income taxes payable                           11,943          8,095
        Deferred revenue                            4,039,793      3,261,751
        Current portion - capital lease                89,030         64,893
                                               --------------- --------------
                                                    6,474,814      6,142,079
    LONG TERM
      Capital lease obligations                        84,371         95,252
      Deferred revenue                                 15,003         13,371
      Deferred lease inducements                      154,264        173,448
                                               --------------- --------------
                                                      253,638        282,071

    TOTAL LIABILITIES                               6,728,452      6,424,150

    SHAREHOLDERS' EQUITY
      Capital stock                                44,969,035     44,969,035
      Contributed surplus                             353,709        272,053
      Deficit                                     (37,275,157)   (36,573,188)
                                               --------------- --------------

    TOTAL SHAREHOLDERS' EQUITY                      8,047,587      8,667,900
                                               --------------- --------------

    TOTAL LIABILITIES & EQUITY                  $  14,776,039  $  15,092,050
                                               --------------- --------------



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

                            Three Months Ended             Nine Months Ended
                                 June 30                       June 30
                           2007           2006           2007           2006
                  ----------------------------- -----------------------------

    Operating
     activities
      Net loss    $    (377,889) $  (1,373,978) $    (701,969) $  (4,034,939)
                  -------------- -------------- -------------- --------------
      Amortization      292,070        333,702        872,184        886,976
      Loss on
       disposal of
       capital assets       238          3,325         68,075          3,325
      Future income
       taxes             16,036        276,724          7,209        450,469
      Stock based
       compensation      21,536         39,104         81,656         89,792
      Change in
       non-cash
       working
       capital          198,408       (710,633)       285,974        189,827
                  -------------- -------------- -------------- --------------
                        150,399     (1,431,756)       613,129     (2,414,550)

    Financing
     activities
      Capital lease
       payments         (21,892)        (9,929)       (62,479)       (29,218)
      Proceeds on
       issue of
       shares                 -              -              -          4,950
                  -------------- -------------- -------------- --------------
                        (21,892)        (9,929)       (62,479)       (24,268)
    Investing
     activities
      Additional
       consideration
       paid on
       acquisitions           -         (4,348)             -        (72,036)
      Purchase of
       capital
       assets           (48,581)       (74,377)      (104,563)      (328,563)
      Proceeds on
       disposal
       of capital
       assets               873              -            873              -
      Development
       costs
       incurred         (20,402)       (73,906)      (161,261)      (297,022)
                  -------------- -------------- -------------- --------------
                        (68,110)      (152,631)      (264,951)      (697,621)

    Net increase
     (decrease)
     in cash and
     short term
     investments         60,397     (1,594,316)       285,699     (3,136,439)

    Cash and short
     term investments
      Beginning
       of period      7,533,479     10,491,618      7,308,177     12,033,741
                  -------------- -------------- -------------- --------------
      End of
       period     $   7,593,876  $   8,897,302  $   7,593,876  $   8,897,302
                  -------------- -------------- -------------- --------------
    





For further information:

For further information: Cory Pala, Investor Relations, Tel: (416)
657-2400, Fax: (416) 657-2300, E-mail: cpala@xenos.com; George Kypreos, Chief
Financial Officer, Tel: (905) 709-1020, Fax: (905) 709-1023, Email:
gkypreos@xenos.com

Organization Profile

XENOS GROUP INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890