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Xenos Reports Fiscal 2005 Results

TORONTO, Ontario, December 14, 2005 - Xenos Group Inc. (TSX:XNS), a leading provider of high-performance data and document management solutions, today reported financial results for the fourth quarter and fiscal year ended September 30, 2005.

For the fiscal fourth quarter ended September 30, 2005, Xenos reported revenues of $3,231,000, compared to revenues of $4,110,000 for the same quarter last year. The Company reported EBITDA of $17,000, compared to EBITDA of $538,000 for the same period last year and a fourth quarter net loss of $341,000, or ($0.04) per share, compared with net earnings of $70,000, or $0.01 per share for the fourth quarter of fiscal 2004. Xenos maintains a strong balance sheet, with a cash position of $12 million, or $1.21 per common share.

For the fiscal 2005 year, Xenos reported revenues of $14,470,000 and a net loss of $1,763,000, or ($0.18) per share. This compares to revenues of $16,204,000 and net earnings of $479,000, or $0.05 per share, for fiscal 2004.

"The financial results of 2005 should not be allowed to cloud the very substantial progress we have made over the past four years," said Stuart Butts, Chairman and CEO. "We have essentially re-invented Xenos. Our unique suite of integrated data, document and delivery solutions position us as a leader in the emerging Information Supply Chain market. There is good news ahead, and shareholders are encouraged to listen to our conference call update, and read our new positioning statement "Powering the Information Supply Chain", being sent to registered shareholders with the materials for the annual meeting."

Printable Version with Financial Highlights (PDF: 44 KB)

Xenos intends to distribute its fiscal 2005 annual report to shareholders during the last week of December. The Company also notifies shareholders and members of the investment community that it will hold its Annual General Meeting of Shareholders in Toronto at 3:00 pm on Monday, January 23rd, 2006 in The Gallery Room of The Toronto Stock Exchange Broadcast and Conference Centre, 2 First Canadian Place, 130 King Street West. Following the formal business of the meeting, Management will provide a presentation on the Company's operations and the outlook for Xenos for 2006 and beyond.

Conference Call
A conference call for shareholders, analysts and other members of the investment community has been scheduled today at 10:00 am (Eastern Time). Stuart Butts, Chairman and CEO, Jim Farmer, President and Rob Kunihiro, Chief Financial Officer will discuss the financial results and provide updates on operations. To participate, please dial 800-814- 3911, or locally 416-644-3426, 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 December 21st. Please dial 877-289-8525 and enter the reservation number 21166731# to listen to the rebroadcast. The call will also be archived for 30 days on the Xenos web site at www.xenos.com.

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About Xenos

Xenos is a leading global provider of high-performance data and document management solutions to a wide variety of industries, including financial services, healthcare and government. Its product offering includes Xenos d2e, Xenos infoWEB, Xenos terminalONE and GoXML. Xenos has offices in Canada, the United States, the United Kingdom and France. Xenos trades on the Toronto Stock Exchange under the trading symbol "XNS." For more information visit www.xenos.com.

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Contact:
Robert Kunihiro
Chief Financial Officer
Xenos Group, Inc.
(905) 709-1020
rkunihiro@xenos.com

Investor Relations Contact:
Cory Pala
Xenos Group, Inc.
416-657-2400
cpala@xenos.com

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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's external auditors, Grant Thornton LLP, have not performed a review of the interim consolidated financial statements for the three months ended September 30, 2005. These statements have been prepared by Management and include the selection of appropriate accounting principles, judgments and estimates necessary to prepare these financial statements in accordance with Canadian generally accepted accounting principles.

The Company uses financial measures including, but not limited to, "EBITDA" to supplement its consolidated financial statements, which are presented in accordance with Canadian generally accepted accounting principles (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. Also, 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

© 2005 Xenos Group Inc. All rights reserved.

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Printable Version (PDF: 44 KB)