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Xenos Returns to Profitability in First Quarter
TORONTO, Ontario, February 13, 2007 —Xenos Group Inc. (TSX:XNS), today reported a return to profitability on year over year growth in its first quarter financial results.Xenos revenues for the first quarter ended December 31, 2006 rose to $3,931,000 compared to revenues of $3,619,000 for the same quarter last year. Xenos reported EBITDA of $226,000, compared to negative EBITDA of $828,000, for the same period last year.
In October, Xenos announced senior management changes designed to “support its refocused strategic direction, enhance operating efficiency and reduce or eliminate its cash burn in the fiscal first quarter.” Operating efficiencies have been gained by centralizing management of the corporation at the Company’s head office in Richmond Hill, Ontario. “We exceeded our financial objectives for the first quarter by posting a small profit. We have continued to rationalize and right size our operations in the second quarter with a view to building a platform for consistent quarterly profitability and long term revenue growth,” said Stuart Butts, Chairman, President and CEO. Xenos’ staff complement has been reduced from a high of 110 in September, 2006 to a current staffing level of 80.
Total operating expenses in the first quarter decreased 21% to $3,258,000, from $4,102,000 in the first quarter of fiscal 2006. Sales and marketing expenses were cut to $1,542,000 from $2,281,000. “We completed an expensive marketing and market development program in 2006,” said Mr. Butts. “Now that we have created greater awareness of Xenos in our chosen markets we are able to reduce our marketing budget and focus on programs and strategies that are delivering measurable financial returns.”
Xenos reported first quarter net earnings of $16,000, or $0.002 per share, compared with a net loss of $927,000, or ($0.09) per share, for the first quarter of fiscal 2006.
At December 31, 2006, Xenos held cash of $6,555,000, or $0.66 per common share and no significant long-term debt.Financial Highlights - Printable Version (PDF: 16 KB)
See discussion of non-GAAP financial measures below.
Xenos’ solid first quarter revenues were achieved through significant new license revenues and consistent performance in professional services. A number of important contracts were in hand at the end of the quarter and these will contribute to revenue in the current quarter and beyond. “We are particularly encouraged by the success we are enjoying in the enterprise content management (ECM) systems consolidation and document migration aspect of our Information Supply Chain business,” said Mr. Butts.
Annual General Meeting Notice
Xenos will hold its Annual General Meeting of shareholders at 10:00 am eastern time on February 16th, 2007 at the Toronto Stock Exchange Media Centre. Shareholders and prospective investors are encouraged to attend to discuss the first quarter financial results, and meet with management and members of the Board of Directors. A review of fiscal 2006 and the outlook for 2007 will be presented at the meeting. An audio recording of the meeting will be available through the Company’s website at www.xenos.com/investors/investors-recordings.aspx
About Xenos
Xenos (TSX: XNS) is a leading global provider of high-performance software solutions that automate the processing and delivery of electronic data and documents. Xenos solutions enable organizations to reduce costs and increase organizational efficiency, agility and accountability by streamlining and simplifying the transformation and repurposing of data and documents into actionable business information, without reengineering legacy applications.
Xenos solutions are embraced worldwide across a wide variety of industries including financial services, insurance, healthcare, telecommunications, manufacturing, logistics, transportation, retail and government sectors.
Xenos trades on the Toronto Stock Exchange under the trading symbol 'XNS.'
For more information, visit www.xenos.com.
Editorial Contacts:
George Kypreos
Chief Financial Officer
Tel: +1 (905) 709-1020
Fax: +1 (905) 709-1023
E-mail:gkypreos@xenos.com
Investor Relations Contact:
Cory Pala
Investor Relations
Tel: +1 (416) 657-2400
Fax: +1 (416) 657-2300
E-mail: cpala@xenos.com
Printable Version (PDF: 16 KB)
