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Xenos Announces First Quarter Results
(EMAILWIRE.COM, February 15, 2001 ) Xenos (TSE:XNS), the data to e-content company, today announced its financial results for the three months ended December 31, 2000. Sales for the quarter were $4.1 million, consistent with the first and fourth quarter of fiscal 2000.
Gross profit in the quarter improved significantly to 83% of sales from 75% and 79% in the previous year's first and fourth quarters respectively. The increased profitability was due primarily to the Company's focus on cost control and its restructuring initiatives in the last half of fiscal 2000.
Leading blue-chip companies purchased Xenos' software subsequent to year-end, including American Express and Bank One Corporation. Xenos also won new business in the fast-growing ASP (application service provider) marketplace as a result of recent investments in resources to address this significant opportunity for growth.
The Company continued to invest in the development of the Xenos d2e PlatformÔ, including the enhancement of its document transformation solution. The new Xenos d2e Developer StudioÔ, a 'digital dashboard' for Xenos' document and data solutions, is well on track for launch in the third quarter. Xenos also announced that it is fast-tracking the development of its data transformation solution. In addition, a new Java development team has been formed.
As part of its alliance strategy, Xenos announced earlier today a new partnership with iPlanet E-Commerce Solutions, an alliance between Sun Microsystems and Netscape, to provide end-to-end Internet Billing and Presentment (IBPP) solutions. Xenos' partnership with IBM continues to strengthen and has already resulted in 6 new business wins subsequent to year-end. Discussions are ongoing to further integrate the Xenos d2e Platform with IBM's Content Manager OnDemand archiving and retrieval software. The Company is also focusing on building Alliance partnerships with large global systems integrators.
Glen Manchester, Xenos' President and CEO, said: "We made a very good start to our new financial year. Large global organizations, as well as industry-leading partners, are committing to Xenos' powerful and robust solutions to transform legacy data to e-content. We will continue with the development of our products and our strategy of sharing our technology with partners and systems integrators in order to establish Xenos as the industry standard."
The Company invested in a new global customer support call center as part of its expenditure on sales and marketing in this quarter. Research and development costs rose compared to last year as Xenos focused on new product development. As a result of its restructuring efforts, administrative expenses in the quarter were reduced by over $200,000 compared to the same period last year and over $300,000 from the fourth quarter of fiscal 2000. The Company produced a net loss of $1.7 million or $0.21 per common share in the first quarter of fiscal 2001 compared to a loss of $797,414 or $0.11 per share in the same quarter last year. This was due mainly to our investment in new product development.
As at December 31, 2000, cash and short-term investments stood at $17.3 million compared to $18.5 million at the end of fiscal 2000. Included in cash disbursements during the quarter was a one-off payment of approximately $766,000 in advanced royalties made to the former owners of the Company's U.S. subsidiary, one of whom has departed from the Board of Directors, and $257,000 in reorganization costs which had been previously accrued in fiscal 2000. Not including these unusual items, the use of cash during the quarter for ongoing operations was negligible.
"Looking ahead, we remain confident that we will achieve our goals of generating revenue growth of at least 25% in fiscal 2001, maintaining cost control and breaking even on a cash flow basis in fiscal 2002," Manchester concluded. "Our focus is on maintaining scalable growth, and ensuring that we meet the needs of our customers and our alliance partners both now, and in the future."
Financial Highlights (statements are attached):
Three Months
Period Ended Dec. 31 Dec. 31 Sept 30
2000 1999 2000
(in CDN$,000 except per share amounts)
Sales 4,110 4,104 4,178
Gross Profit 3,391 3,065 3,291
Gross Profit (% of sales) 83% 75% 79%
EBITDA (934) 136 (2,942)
Net loss (1,724) (890) (4,144)
Net loss per share ($0.21) ($0.11) ($0.51)
Cash & short-term investments 17,338 6,972 18,470
Shareholders' Equity 29,679 21,240 31,380
Shareholders' Equity per Share $3.54 $2.73 $3.75
A telephone conference call will be held on Thursday, February 15, 2001 at 10am ET hosted by Glen Manchester, President and CEO, and Rob Kunihiro, Chief Financial Officer. The telephone numbers for the live conference call are: (416) 695-5806 or (800) 273-9672. The conference can also be heard over the Internet at www.xenos.com
- ends -
For further information please contact:
Robert Kunihiro
Vice President Finance & CFO
Xenos
Tel: 905 709 1020
Email: rkunihiro@xenos.com
Barry Monk
Vice President Marketing
Xenos
Tel: 905 709 1020
Email: bmonk@xenos.com
About Xenos
Xenos (TSE: XNS, www.xenos.com) develops software solutions that transform legacy data and documents into e-content for delivery on the Web. Xenos solutions are deployed by large 'clicks and mortar' organizations in key industry segments, including banking and financial services, insurance, telecommunications and utilities. The company has corporate headquarters in Toronto, Canada, supported by global sales, marketing, product development and customer support. Alliance partners, such as IBM and iPlanet, use Xenos' leading-edge software to provide total e-business solutions.
This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the Management Discussion and Analysis published in the Company's annual report.
Xenos Group Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
December 31
2000 1999
Sales $ 4,110,367 $ 4,104,473
Service integration costs 718,964 1,039,647
Gross Profit 3,391,403 3,064,826
Expenses
Sales and marketing 2,555,796 1,327,293
Research and development 931,411 561,598
Administration and general 838,417 1,039,647
Amortization 1,081,172 991,660
Interest expense 10,080 20,786
5,416,876 3,940,984
Earnings (Loss) from operations (2,025,473) (876,158)
Other income
Dividends, interest and other 352,718 78,744
Earnings (loss) before income taxes (1,672,755) (797,414)
Provision for income taxes 51,112 93,042
Net earnings (loss) $ (1,723,867) $ (890,456)
Net earnings (loss) per share
- Basic & fully-diluted $ (0.21) $ (0.11)
Weighted average number of shares
- Basic 8,373,957 7,777,000
- Fully-diluted 9,577,207 8,754,000
Xenos Group Inc.
Consolidated Balance Sheets
(Unaudited)
Three Months Ended
As at December 31
2000 1999
ASSETS
CURRENT
Cash & S.T. investments $ 17,338,492 $ 6,972,473
Trade receivables 5,388,569 4,551,666
Other receivables 115,873 406,545
Prepaids 301,618 279,369
Income taxes recoverable 203,122 627,052
Deferred income taxes - 282,000
23,347,674 13,119,105
LONG TERM
Deferred income taxes 1,925,996 512,450
Capital assets 2,332,898 2,465,726
Other assets 1,013,573 1,038,026
Goodwill 7,711,226 9,408,727
12,983,693 13,424,929
TOTAL ASSETS $ 36,331,367 $ 26,544,034
LIABILITIES
CURRENT
Bank indebtedness $ 520,000 $ 191,188
Payables & accruals 3,310,387 4,186,510
Income taxes payable 232,848 -
Deferred revenue 2,425,686 713,662
6,488,921 5,091,360
LONG TERM LIABILITIES
Deferred revenue 163,920 212,358
163,920 212,358
TOTAL LIABILITIES 6,652,841 5,303,718
SHAREHOLDERS' EQUITY
Capital stock 41,031,998 22,230,148
Retained earnings/(deficit) (11,353,472) (989,832)
TOTAL SHAREHOLDERS' EQUITY 29,678,526 21,240,316
TOTAL LIABILITIES & EQUITY $ 36,331,367 $ 26,544,034
Xenos Group Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
December 31
2000 1999
Operating activities
Net Earnings (loss) $ (1,723,867) $ (890,456)
Amortization 1,081,172 991,660
Deferred income taxes (86) -
Reorganization costs (257,422) -
Change in non-cash working capital 800,806 1,663,515
(99,397) 1,764,719
Financing Activities
Bank financing 204,615 (1,163,612)
Proceeds on issue of shares 22,713 19,875
227,328 (1,143,737)
Investing activities
Cash paid on acquisition of subsidiaries (766,985) (5,533,021)
Purchase of capital assets (144,719) (1,584,038)
Development costs incurred (347,825) -
(1,259,529) (7,117,059)
Net (decrease) increase in cash and
cash equivalents (1,131,598) (6,496,077)
Cash and cash equivalents
Beginning of period 18,470,090 13,468,550
End of period $ 17,338,492 $ 6,972,473
Gross profit in the quarter improved significantly to 83% of sales from 75% and 79% in the previous year's first and fourth quarters respectively. The increased profitability was due primarily to the Company's focus on cost control and its restructuring initiatives in the last half of fiscal 2000.
Leading blue-chip companies purchased Xenos' software subsequent to year-end, including American Express and Bank One Corporation. Xenos also won new business in the fast-growing ASP (application service provider) marketplace as a result of recent investments in resources to address this significant opportunity for growth.
The Company continued to invest in the development of the Xenos d2e PlatformÔ, including the enhancement of its document transformation solution. The new Xenos d2e Developer StudioÔ, a 'digital dashboard' for Xenos' document and data solutions, is well on track for launch in the third quarter. Xenos also announced that it is fast-tracking the development of its data transformation solution. In addition, a new Java development team has been formed.
As part of its alliance strategy, Xenos announced earlier today a new partnership with iPlanet E-Commerce Solutions, an alliance between Sun Microsystems and Netscape, to provide end-to-end Internet Billing and Presentment (IBPP) solutions. Xenos' partnership with IBM continues to strengthen and has already resulted in 6 new business wins subsequent to year-end. Discussions are ongoing to further integrate the Xenos d2e Platform with IBM's Content Manager OnDemand archiving and retrieval software. The Company is also focusing on building Alliance partnerships with large global systems integrators.
Glen Manchester, Xenos' President and CEO, said: "We made a very good start to our new financial year. Large global organizations, as well as industry-leading partners, are committing to Xenos' powerful and robust solutions to transform legacy data to e-content. We will continue with the development of our products and our strategy of sharing our technology with partners and systems integrators in order to establish Xenos as the industry standard."
The Company invested in a new global customer support call center as part of its expenditure on sales and marketing in this quarter. Research and development costs rose compared to last year as Xenos focused on new product development. As a result of its restructuring efforts, administrative expenses in the quarter were reduced by over $200,000 compared to the same period last year and over $300,000 from the fourth quarter of fiscal 2000. The Company produced a net loss of $1.7 million or $0.21 per common share in the first quarter of fiscal 2001 compared to a loss of $797,414 or $0.11 per share in the same quarter last year. This was due mainly to our investment in new product development.
As at December 31, 2000, cash and short-term investments stood at $17.3 million compared to $18.5 million at the end of fiscal 2000. Included in cash disbursements during the quarter was a one-off payment of approximately $766,000 in advanced royalties made to the former owners of the Company's U.S. subsidiary, one of whom has departed from the Board of Directors, and $257,000 in reorganization costs which had been previously accrued in fiscal 2000. Not including these unusual items, the use of cash during the quarter for ongoing operations was negligible.
"Looking ahead, we remain confident that we will achieve our goals of generating revenue growth of at least 25% in fiscal 2001, maintaining cost control and breaking even on a cash flow basis in fiscal 2002," Manchester concluded. "Our focus is on maintaining scalable growth, and ensuring that we meet the needs of our customers and our alliance partners both now, and in the future."
Financial Highlights (statements are attached):
Three Months
Period Ended Dec. 31 Dec. 31 Sept 30
2000 1999 2000
(in CDN$,000 except per share amounts)
Sales 4,110 4,104 4,178
Gross Profit 3,391 3,065 3,291
Gross Profit (% of sales) 83% 75% 79%
EBITDA (934) 136 (2,942)
Net loss (1,724) (890) (4,144)
Net loss per share ($0.21) ($0.11) ($0.51)
Cash & short-term investments 17,338 6,972 18,470
Shareholders' Equity 29,679 21,240 31,380
Shareholders' Equity per Share $3.54 $2.73 $3.75
A telephone conference call will be held on Thursday, February 15, 2001 at 10am ET hosted by Glen Manchester, President and CEO, and Rob Kunihiro, Chief Financial Officer. The telephone numbers for the live conference call are: (416) 695-5806 or (800) 273-9672. The conference can also be heard over the Internet at www.xenos.com
- ends -
For further information please contact:
Robert Kunihiro
Vice President Finance & CFO
Xenos
Tel: 905 709 1020
Email: rkunihiro@xenos.com
Barry Monk
Vice President Marketing
Xenos
Tel: 905 709 1020
Email: bmonk@xenos.com
About Xenos
Xenos (TSE: XNS, www.xenos.com) develops software solutions that transform legacy data and documents into e-content for delivery on the Web. Xenos solutions are deployed by large 'clicks and mortar' organizations in key industry segments, including banking and financial services, insurance, telecommunications and utilities. The company has corporate headquarters in Toronto, Canada, supported by global sales, marketing, product development and customer support. Alliance partners, such as IBM and iPlanet, use Xenos' leading-edge software to provide total e-business solutions.
This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the Management Discussion and Analysis published in the Company's annual report.
Xenos Group Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
December 31
2000 1999
Sales $ 4,110,367 $ 4,104,473
Service integration costs 718,964 1,039,647
Gross Profit 3,391,403 3,064,826
Expenses
Sales and marketing 2,555,796 1,327,293
Research and development 931,411 561,598
Administration and general 838,417 1,039,647
Amortization 1,081,172 991,660
Interest expense 10,080 20,786
5,416,876 3,940,984
Earnings (Loss) from operations (2,025,473) (876,158)
Other income
Dividends, interest and other 352,718 78,744
Earnings (loss) before income taxes (1,672,755) (797,414)
Provision for income taxes 51,112 93,042
Net earnings (loss) $ (1,723,867) $ (890,456)
Net earnings (loss) per share
- Basic & fully-diluted $ (0.21) $ (0.11)
Weighted average number of shares
- Basic 8,373,957 7,777,000
- Fully-diluted 9,577,207 8,754,000
Xenos Group Inc.
Consolidated Balance Sheets
(Unaudited)
Three Months Ended
As at December 31
2000 1999
ASSETS
CURRENT
Cash & S.T. investments $ 17,338,492 $ 6,972,473
Trade receivables 5,388,569 4,551,666
Other receivables 115,873 406,545
Prepaids 301,618 279,369
Income taxes recoverable 203,122 627,052
Deferred income taxes - 282,000
23,347,674 13,119,105
LONG TERM
Deferred income taxes 1,925,996 512,450
Capital assets 2,332,898 2,465,726
Other assets 1,013,573 1,038,026
Goodwill 7,711,226 9,408,727
12,983,693 13,424,929
TOTAL ASSETS $ 36,331,367 $ 26,544,034
LIABILITIES
CURRENT
Bank indebtedness $ 520,000 $ 191,188
Payables & accruals 3,310,387 4,186,510
Income taxes payable 232,848 -
Deferred revenue 2,425,686 713,662
6,488,921 5,091,360
LONG TERM LIABILITIES
Deferred revenue 163,920 212,358
163,920 212,358
TOTAL LIABILITIES 6,652,841 5,303,718
SHAREHOLDERS' EQUITY
Capital stock 41,031,998 22,230,148
Retained earnings/(deficit) (11,353,472) (989,832)
TOTAL SHAREHOLDERS' EQUITY 29,678,526 21,240,316
TOTAL LIABILITIES & EQUITY $ 36,331,367 $ 26,544,034
Xenos Group Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
December 31
2000 1999
Operating activities
Net Earnings (loss) $ (1,723,867) $ (890,456)
Amortization 1,081,172 991,660
Deferred income taxes (86) -
Reorganization costs (257,422) -
Change in non-cash working capital 800,806 1,663,515
(99,397) 1,764,719
Financing Activities
Bank financing 204,615 (1,163,612)
Proceeds on issue of shares 22,713 19,875
227,328 (1,143,737)
Investing activities
Cash paid on acquisition of subsidiaries (766,985) (5,533,021)
Purchase of capital assets (144,719) (1,584,038)
Development costs incurred (347,825) -
(1,259,529) (7,117,059)
Net (decrease) increase in cash and
cash equivalents (1,131,598) (6,496,077)
Cash and cash equivalents
Beginning of period 18,470,090 13,468,550
End of period $ 17,338,492 $ 6,972,473
Contact Information:
Xenos
Joseph Nchor
Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
Xenos
Joseph Nchor
Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
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