2008-08-06 05:50:00
XATA Reports Third Quarter Results
84 percent increase in XATANET sales leads to 57 percent earnings
improvement
MINNEAPOLIS, Aug. 6 /EMWNews/ -- XATA Corporation (Nasdaq:
XATA), today reported a 103 percent increase in sales for the third quarter
ended June 30, 2008 as sales increased to $16.2 million from $8.0 million
for the same period in fiscal 2007. Comparable third quarter year-over-year
sales increased 36 percent primarily driven by an 84 percent growth from
the company's XATANET(TM) SaaS platform. For the third quarter, Geologic
Solutions MobileMax(TM) sales represented approximately $5.3 million of the
total revenue. The company acquired 15 new customers in the third quarter.
For the third quarter recurring revenue, including monthly
subscriptions from XATANET and monthly fees from our MobileMax and OpCenter
product lines, accounted for 45 percent of total sales compared to 35
percent for the same period in fiscal 2007.
Operationally, gross margins totaled 47 percent of sales for the third
quarter of fiscal 2008, compared to 46 percent of sales for the same period
of fiscal 2007. Higher recurring gross margin improvement was primarily
offset by the increased number of lower gross margin systems sales during
the reported period.
Selling, general and administrative costs were $6.2 million and $3.6
million for the third quarter of fiscal 2008 and 2007, respectively. The
increase of $2.6 million reflects the selling, general and administrative
costs of the consolidated operations, including amortization expense of
$0.4 million relating to acquired intangible assets.
For the third quarter of fiscal 2008, the company improved EBITDA
(earnings before interest (net), taxes, depreciation, amortization, stock
based compensation and preferred stock dividends and deemed dividends)
performance by $0.15 per diluted share, reporting EBITDA of $0.12 per
diluted share as the company continues to stride to profitability compared
to an EBITDA loss of $0.03 per diluted share for the same period of fiscal
2007.
"We are pleased with our third quarter financial performance as we
continue to make progress toward profitability," said Jay Coughlan,
chairman and president of XATA Corporation. "XATA continues to make
excellent strides in the private and for-hire segments of the trucking
industry as demonstrated by the addition of 15 new XATANET customers in the
third quarter."
Nine Month Performance
XATA reported a 50 percent increase in sales for the nine months ended
June 30, 2008 as sales increased to $36.0 million from $23.9 million for
the same period in fiscal 2007. Comparable nine months year-over-year sales
increased 15 percent primarily driven by a 32 percent growth from the
company's XATANET(TM) SaaS platform. Geologic Solutions MobileMax(TM) sales
represented approximately $8.5 million of the total revenue for the nine
months ended June 30, 2008. The company acquired 53 new XATANET customers
during the nine months ended June 30, 2008.
For the nine months ending June 30, 2008 recurring revenue, including
monthly subscriptions from XATANET and monthly fees from our MobileMax and
OpCenter product lines, accounted for 45 percent of total sales compared to
33 percent for the same period in fiscal 2007.
"The acquisition of GeoLogic is now fully integrated into XATA and we
are confident in our decision to enter the for-hire market as evidenced by
the performance of the combined organizations," continued Coughlan. "Our
third quarter was strong, delivering significant year-over-year growth in
revenues based on a dramatic increase in shipments of XATANET systems,
positive margin improvement and significant strides in our EBITDA
performance. As we enter the final quarter of fiscal 2008 we continue to
make positive progress towards our goal of delivering positive shareholder
return through profitability."
Gross margins improved during the nine month period of fiscal 2008 to
48 percent of sales compared to 45 percent of sales for the same period in
fiscal 2007 due to an increase in higher gross margin XATANET subscription
revenue and the fact that a larger portion of the total revenue stream now
consists of higher recurring revenue gross margins.
Selling, general and administrative costs were $15.7 million and $10.1
million for the nine months ended June 30, 2008 and 2007, respectively. The
increase is driven by additional costs of the combined entity, investments
in our brand strategy, professional services business and direct sales
model and amortization expense of $0.7 million relating to acquired
intangible assets.
The company reported EBITDA improvement of $0.13 per diluted share for
the nine months ended June 30, 2008, reporting EBITDA of $0.07 per diluted
share compared to an EBITDA loss of $0.06 per diluted share for the same
period of fiscal 2007.
Non-GAAP vs. GAAP Financials
To supplement the company's consolidated financial statements presented
in accordance with GAAP, the company provides certain non-GAAP measures of
financial performance. These non-GAAP measures include EBITDA, which is
earnings before interest (net), taxes, depreciation, amortization, stock
based compensation and preferred stock dividends and deemed dividends, and
EBITDA per diluted share. The company's reference to these non-GAAP
measures should be considered in addition to results prepared under current
accounting standards, but are not a substitute for, or superior to, GAAP
results.
These non-GAAP measures are provided to enhance investors' overall
understanding of the company's current financial performance and ability to
generate cash flow. In many cases non -GAAP financial measures are used by
analysts and investors to evaluate the company's performance.
Reconciliation to the nearest GAAP measure of all non-GAAP measures
included in this press release can be found in a financial table included
below in this press release.
About XATA
Based in Minneapolis, MN, XATA Corporation (Nasdaq: XATA) is an expert
in optimizing fleet operations by reducing costs and ensuring regulatory
compliance for the trucking industry. Our customers have access to vehicle
data anywhere, anytime, through XATANET, our fee-based subscription
service. Our software and professional services help companies manage fleet
operations, enhance driver safety and deliver a higher level of customer
satisfaction. XATA provides expert services to develop the business
processes required to deliver the profitability, safety and service level
demanded by today's competitive transportation environments. Today, XATA
systems increase the productivity of approximately 61,000 trucks across
North America. For more information, visit http://www.xata.com or call
1-800-745-9282.
Cautionary note regarding forward-looking statements.
This announcement includes forward-looking statements. Statements that
are not historical or current facts, including statements about beliefs and
expectations, are forward-looking statements. Such statements are based on
current expectations, and actual results may differ materially. The
forward-looking statements in this announcement are subject to a number of
risks and uncertainties including, but not limited to, the possibility of
continuing operating losses, the ability to adapt to rapid technological
change, cost and difficulties we may face in integrating the businesses of
XATA and GeoLogic Solutions, dependence on positioning systems and
communication networks owned and controlled by others, the receipt and
fulfillment of new orders for current products, the timely introduction and
market acceptance of new products, the ability to fund future research and
development activities, the ability to establish and maintain strategic
partner relationships, and the other factors discussed under "Risk Factors"
in Part IA, Item 1 of our Annual Report on Form 10-K for the fiscal year
ended September 30, 2007 (as updated in our subsequent reports filed with
the SEC). These reports are available under the "Investors" section of our
Web site at http://www.xata.com and through the SEC Web site at
http://www.sec.gov. Forward-looking statements speak only as of the date
they are made, and we undertake no obligation to update them in light of
new information or future events.
XATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
2008 2007 2008 2007
Sales $16,167 $7,984 $35,983 $23,920
Cost of sales 8,542 4,282 18,609 13,133
Selling, general and administrative 6,218 3,620 15,693 10,115
Research and development 1,599 1,061 4,078 3,258
Total costs and expenses 16,359 8,963 38,380 26,506
Operating loss (192) (979) (2,397) (2,586)
Interest income 86 109 327 298
Interest expense (531) (5) (918) (18)
Loss before income taxes (637) (875) (2,988) (2,306)
Income tax expense - - - -
Net loss (637) (875) (2,988) (2,306)
Preferred stock dividends and deemed
dividends (75) (768) (212) (955)
Net loss to common shareholders $(712) $(1,643) $(3,200) $(3,261)
Net loss per common share -- basic and
diluted $(0.08) $(0.21) $(0.39) $(0.41)
Weighted average common and
common share equivalents
basic and diluted 8,411 7,959 8,293 7,908
XATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, 2008 September 30,
(Unaudited) 2007
Current assets
Cash and cash equivalents $8,284 $13,675
Accounts receivable, net 10,042 3,280
Inventories 3,305 2,672
Deferred product costs 1,260 752
Current portion of investment in sales-type
leases 873 -
Prepaid expenses 1,250 393
Total current assets 25,014 20,772
Equipment and leasehold improvements, net 3,930 1,583
Goodwill and intangible assets 14,646 -
Deferred product costs, net of current portion 2,335 1,798
Other non-current assets 1,394 -
Total assets $47,319 $24,153
Current liabilities
Current portion of long-term obligations $2,111 $161
Accounts payable 5,165 3,419
Accrued liabilities 5,219 3,548
Deferred revenue 4,343 3,105
Total current liabilities 16,838 10,233
Note and capital lease obligations, non-current 16,365 220
Deferred rent 825 98
Deferred revenue, non-current 7,028 6,524
Total liabilities 41,056 17,075
Shareholders' equity
Common stock 27,970 25,845
Preferred stock 15,963 15,703
Accumulated deficit (37,670) (34,470)
Total shareholders' equity 6,263 7,078
Total liabilities and shareholders' equity $47,319 $24,153
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended Ended
June 30, June 30,
2008 2007 2008 2007
Net loss to common shareholders $(712) $(1,643) $(3,200) $(3,261)
Adjustments:
Net interest expense 445 (104) 591 (280)
Stock-based compensation 355 570 1,238 1,496
Depreciation and amortization expense 819 162 1,701 654
Preferred stock dividends and deemed
dividends 75 768 212 955
Total adjustments 1,694 1,396 3,742 2,825
Non-GAAP EBITDA $982 $(247) $542 $(436)
Non-GAAP EBITDA per diluted share $0.12 $(0.03) $0.07 $(0.06)
Shares used in calculating non-GAAP
EBITDA per diluted share 8,411 7,959 8,293 7,908
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