SARASOTA, Fla., May 15, 2017 /PRNewswire/ -- xG Technology,
Inc. ("xG" or the "Company") (Nasdaq: XGTI, XGTIW), a leading
provider of wireless video solutions to broadcast, law enforcement
and defense markets, and private mobile broadband networks for
critical communications, announced its results for the first
quarter ended March 31, 2017.
Management will hold a conference call to discuss these results on
Wednesday, May 17, 2017 at
5:00 p.m. Eastern Time (details
below).
Key Recent Accomplishments
- Completed the acquisition of the assets of Vislink, thereby
assuming full legal ownership of the business. With the Vislink
acquisition complete, xG has now fully transitioned its focus to
providing comprehensive video, broadband and satellite solutions
for broadcast, sports and entertainment, and defense markets.
- Announced an agreement with the seller in the Vislink
transaction for extinguishing all remaining deferred debt incurred
in the acquisition. All payments due from xG against the original
promissory notes covering the acquisition of Vislink have been
settled in full, and all liens have been released.
- Received a number of six-figure orders from US and
internationally-based customers in the broadcasting,
sports/entertainment and law enforcement sectors for wireless
camera systems, aerial downlink components, satellite systems and
other microwave transmission equipment.
- Reduced costs by eliminating 46 redundant positions, an annual
cost savings of $3.8 million.
Salaries, taxes and benefits for these positions of $390,000 and one time severance related charges
of $330,000 are included in G&A
for the quarter. In addition, facility costs have been reduced by
$600,000, of which $103,000 has been recorded in the quarter and
will not continue.
- Recorded one-time acquisition related fees of $1.8 million included in G&A. EBITDA,
excluding the cost saving measures and one-time acquisition related
charges, was $12.4 million for the
quarter.
- Announced new management appointments in support of the
realigned IMT and Vislink businesses to drive worldwide growth
opportunities in key vertical markets.
- xG's IMT business launched The IMTDragonfly, an ultra-miniature
wireless video system designed for drone/UAV, bodycam, sports
broadcast and reality-based production applications.
George Schmitt, CEO and Chairman
of the Board of xG Technology, said, "In the first quarter, not
only did we successfully conclude the acquisition of the
assets of Vislink, but we have already completed the vast majority
of the operational tasks identified as essential to the smooth
integration of our businesses. With the Vislink acquisition now
complete, we have effectively repositioned our business to focus on
offering end-to-end, reliable, high-data rate, long-range video
transmission solutions to the broadcast, sports and entertainment
and defense markets. We are already seeing the promised synergies
between xG, Vislink and IMT start to bear fruit in areas such as
sales, joint technology and product development and manufacturing,
and we are now leveraging the strength of our expanded solutions in
the marketplace. As a result, we are well-positioned to expand our
customer base, gain additional market share in key sectors, and
deliver strong overall financial performance through the remainder
of 2017."
Roger Branton, CFO and co-founder
of xG Technology, said, "We are pleased to report that we began the
year 2017 with record quarterly revenue in Q1. We recorded a
revenue run rate of approximately $1
million per week, once revenues from Vislink commenced in
the second month of the quarter, and we expect this revenue run
rate to continue into Q2. An adverse movement in the British Pound
to US Dollar exchange rate reduced revenues by $350,000 compared to our forecasts for the
quarter. We ended the quarter with positive cash flow and our
working capital ratios improved substantially."
Mr. Branton continued, "Our results include a preliminary
bargain purchase gain from the Vislink acquisition which, while a
one-time event, also means that no goodwill has been added to the
balance sheet. The Vislink acquisition was concluded without
incurring any debt, and the total amount of cash actually paid was
substantially less than the purchase price. The IMT acquisition
completed in 2016 also produced a bargain purchase gain, proving
that we are acquiring these companies at favorable prices. This has
helped place us on a strong financial footing to allow our
companies to further capture business in their target markets.
Therefore, we are considering establishing credit lines, both debt
and equity, to access capital, specifically for acquisitions and to
take advantage of opportunities that are time sensitive."
Review of Results
Total first quarter 2017 revenues were $9.3 million compared to $929,000 in the first quarter of 2016. First
quarter operating loss was $5.7
million compared to operating loss of $4.6 million in the first quarter of 2016.
Net income attributable to common shareholders was $8.3 million, or $0.87 per share compared to a net loss of
$4.4 million, or $(21.42) per share in the first quarter of
2016.
xG ended first quarter 2017 with $4.7
million in cash compared to $9.1
million at December 31,
2016.
Financial Results Conference Call Details
xG management will hold a conference call to discuss xG's Q1
2017 results on Wednesday, May 17,
2017 at 5:00 p.m. Eastern
Time. To participate in the conference call, please call
844-825-9789 (toll free) or 1-412-317-5169 (international call-in)
and ask to join the xG Technology call. For those who cannot
participate in the call, an audio replay will be available on xG's
website at
http://www.xgtechnology.com/about-xg-technology/investor-information/.
About xG Technology, Inc.
xG Technology's brands provide wireless video solutions to
broadcast, law enforcement and defense markets, and private mobile
broadband networks for use in challenging environments. xG's brand
portfolio includes Integrated Microwave Technologies (IMT),
Vislink, and xMax.
IMT has pioneered advanced digital microwave systems and is a
trusted supplier to broadcast, sports and entertainment, and MAG
(Military, Aerospace & Government) markets. Their products are
recognized for their high level of performance, reliability, build
quality, extended operating ranges and compact form factors. More
information about IMT can be found at www.imt-solutions.com.
Vislink specializes in the wireless capture, delivery and
management of secure, high-quality, live video, and serves
broadcast & media and public safety & surveillance markets.
More information about Vislink can be found at
http://www.vislink.com/.
xMax is a secure, rapid-deploy mobile broadband system that
delivers mission-assured wireless connectivity in demanding
operating environments. It was designed to serve as an
expeditionary and critical communications network for use in
unpredictable scenarios and during fluid situations, making it
ideal for disaster response, emergency communications, and defense
applications. More information about xMax can be found at
http://www.xgtechnology.com/system-overview/. In addition to the
above business lines, xG has a dedicated Federal Sector Group (xG
Federal) focused on providing next-generation spectrum sharing
solutions to national defense, scientific research and other
federal organizations. Additional information about xG Federal can
be found at http://www.xgtechnology.com/technology/xg-federal/.
Based in Sarasota, Florida, xG
Technology has over 100 patents and pending patent applications. xG
is a publicly traded company listed on the NASDAQ Capital Market
(symbol: XGTI) For more information, please visit
www.xgtechnology.com.
Cautionary Statement Regarding Forward Looking
Statements
Statements contained herein that are not based upon current or
historical fact are forward-looking in nature and constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements reflect the Company's
expectations about its future operating results, performance and
opportunities that involve substantial risks and uncertainties.
These statements include but are not limited to statements
regarding the intended terms of the offering, closing of the
offering and use of any proceeds from the offering. When used
herein, the words "anticipate," "believe," "estimate," "upcoming,"
"plan," "target", "intend" and "expect" and similar expressions, as
they relate to xG Technology, Inc., its subsidiaries, or its
management, are intended to identify such forward-looking
statements. These forward-looking statements are based on
information currently available to the Company and are subject to a
number of risks, uncertainties, and other factors that could cause
the Company's actual results, performance, prospects, and
opportunities to differ materially from those expressed in, or
implied by, these forward-looking statements.
FOR MORE INFORMATION
xG Technology:
Daniel
Carpini
941-953-9035
daniel.carpini@xgtechnology.com
xG TECHNOLOGY,
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(IN THOUSANDS
EXCEPT PER SHARE DATA)
|
|
|
March 31, 2017
(unaudited)
|
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,718
|
|
|
$
|
9,054
|
|
Accounts
receivable, net
|
|
|
11,741
|
|
|
|
1,369
|
|
Inventories,
net
|
|
|
16,652
|
|
|
|
2,722
|
|
Prepaid expenses and
other current assets
|
|
|
1,417
|
|
|
|
111
|
|
Total current
assets
|
|
|
34,528
|
|
|
|
13,256
|
|
Property and
equipment, net
|
|
|
2,128
|
|
|
|
771
|
|
Intangible assets,
net
|
|
|
11,112
|
|
|
|
5,872
|
|
Total
assets
|
|
$
|
47,768
|
|
|
$
|
19,899
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
9,698
|
|
|
$
|
1,606
|
|
Accrued
expenses
|
|
|
6,073
|
|
|
|
1,813
|
|
Accrued
interest
|
|
|
87
|
|
|
|
269
|
|
Due to related
parties
|
|
|
801
|
|
|
|
96
|
|
Deferred revenue and
customer deposits
|
|
|
145
|
|
|
|
186
|
|
Obligation under
capital leases
|
|
|
54
|
|
|
|
58
|
|
Derivative
liabilities
|
|
|
1,400
|
|
|
|
1,183
|
|
Total
current liabilities
|
|
|
18,258
|
|
|
|
5,211
|
|
Long-term obligation
under capital leases, net of current portion
|
|
|
39
|
|
|
|
49
|
|
Convertible note
payable
|
|
|
2,000
|
|
|
|
2,000
|
|
Total
liabilities
|
|
|
20,297
|
|
|
|
7,260
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Preferred stock –
$0.00001 par value per share: 10,000,000 shares
authorized as of
March 31, 2017 and December 31, 2016; 0 shares issued
and outstanding as of March
31, 2017 and December 31, 2016
|
|
|
—
|
|
|
|
—
|
|
Common
stock, – $0.00001 par value, 100,000,000 shares
authorized, 11,118,324 and
7,606,518 shares issued and 11,118,322 and 7,606,516
outstanding as of March 31,
2017 and December 31, 2016, respectively
|
|
|
—
|
|
|
|
—
|
|
Additional paid in capital
|
|
|
228,517
|
|
|
|
221,960
|
|
Accumulated other comprehensive loss
|
|
|
(17)
|
|
|
|
—
|
|
Treasury
stock, at cost – 2 shares at March 31, 2017 and December 31,
2016,
respectively
|
|
|
(22)
|
|
|
|
(22)
|
|
Accumulated deficit
|
|
|
(201,007)
|
|
|
|
(209,299)
|
|
Total stockholders' equity
|
|
|
27,471
|
|
|
|
12,639
|
|
Total liabilities and
stockholders' equity
|
|
$
|
47,768
|
|
|
$
|
19,899
|
|
|
The accompanying
notes are an integral part of these condensed consolidated
financial statements.
|
xG TECHNOLOGY,
INC. AND SUBSIDIARIES
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(IN THOUSANDS
EXCEPT NET LOSS PER SHARE DATA)
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
Revenue
|
|
$
|
9,335
|
|
|
$
|
929
|
|
Cost of revenue and
operating expenses
|
|
|
|
|
|
|
|
|
Cost of components
and personnel
|
|
|
5,571
|
|
|
|
426
|
|
Inventory valuation
adjustments
|
|
|
99
|
|
|
|
70
|
|
General and
administrative expenses
|
|
|
6,548
|
|
|
|
2,038
|
|
Research and
development expenses
|
|
|
1,874
|
|
|
|
1,660
|
|
Amortization and
depreciation
|
|
|
989
|
|
|
|
1,352
|
|
Total
cost of revenue and operating expenses
|
|
|
(15,081)
|
|
|
|
(5,546)
|
|
Loss from
operations
|
|
|
(5,746)
|
|
|
|
(4,617)
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Changes in fair value
of derivative liabilities
|
|
|
(217)
|
|
|
|
514
|
|
Preliminary gain on
bargain purchase
|
|
|
11,839
|
|
|
|
512
|
|
Gain on debt
extinguishment
|
|
|
2,900
|
|
|
|
—
|
|
Interest
expense
|
|
|
(484)
|
|
|
|
(472)
|
|
Total
other income
|
|
|
14,038
|
|
|
|
554
|
|
Net income
(loss)
|
|
$
|
8,292
|
|
|
$
|
(4,063)
|
|
Dividends and deemed
dividends
|
|
|
—
|
|
|
|
(370)
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
8,292
|
|
|
$
|
(4,433)
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
|
$
|
0.87
|
|
|
$
|
(21.42)
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
$
|
0.84
|
|
|
|
(21.42)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9,585
|
|
|
|
207
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
9,925
|
|
|
|
207
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
8,292
|
|
|
$
|
(4,063)
|
|
Unrealized loss on
currency translation adjustment
|
|
|
(17)
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
|
$
|
8,275
|
|
|
$
|
(4,433)
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/xg-technology-reports-first-quarter-2017-results-and-conference-call-300457978.html
SOURCE xG Technology, Inc.