Earnings per share improved $0.12 per share as revenue grew 39
percent in the second quarter of fiscal 2009 MINNEAPOLIS, May 4
/PRNewswire-FirstCall/ -- XATA Corporation (NASDAQ: XATA), today
reported a 39 percent increase in revenue for the second quarter
ended March 31, 2009, as revenue increased to $16.9 million from
$12.1 million for the same period in fiscal 2008 primarily driven
by a 45 percent growth in software revenue. The organic revenue
growth, which includes Geologic Solutions, Inc. revenue for the two
month period from the date of acquisition to March 31, 2008 and the
comparable period in fiscal 2009, was 26 percent for the three
months ended March 31, 2009. The company acquired 7 new customers
in the second quarter of fiscal 2009. Software revenue for the
second quarter of fiscal 2009, including monthly subscriptions from
XATANET and monthly fees from our MobileMax and OpCenter(TM)
product lines, accounted for 50 percent of total revenue compared
to 48 percent for the same quarter of fiscal 2008. For the second
quarter of fiscal 2009 XATANET software revenue increased by 72
percent compared to the same period of fiscal 2008. "In challenging
economic environments fleet optimization plays a significant role
in reducing cost for trucking owners and operators," said Jay
Coughlan, chairman and president of XATA Corporation. "Our second
quarter results are indicative of the trucking industry's demand
for software solutions that enhance fleet optimization and lower
operating costs while maintaining regulatory compliance."
Operationally, gross margins as a percent of revenue decreased to
45 percent for the second quarter of fiscal 2009 compared to 46
percent for the same period of fiscal 2008 driven by an 11
percentage point decrease in systems margins. The decrease in
systems margins was offset by growth in higher margin software
revenue and improved software margin performance. Software margins
increased to 72 percent for the second quarter of fiscal 2009
compared to 70 percent for the same period of fiscal 2008. Selling,
general and administrative costs were $5.8 million or 34 percent of
revenue and $5.6 million or 46 percent of revenue for the second
quarter of fiscal 2009 and 2008, respectively. This slight increase
in selling, general and administrative costs for the second quarter
of fiscal 2009 was due to increased personnel costs. As a
percentage of revenue, selling, general and administrative costs
decreased 12 percentage points as result of our continued ability
to leverage this cost structure. Research and development costs
were $1.4 million or 8 percent of revenue and $1.1 million or 9
percent of revenue for the second quarter of fiscal 2009 and 2008,
respectively. The increase in research and development costs in the
second quarter of fiscal 2009 was due to increased personnel costs.
The company reported an improvement in earnings per share for the
second quarter of fiscal 2009 of $0.12 per share as net loss to
common shareholders improved to $0.4 million, or $0.05 per diluted
share, compared to a net loss to common shareholders of $1.4
million, or $0.17 per diluted share for the same period of fiscal
2008. For the second quarter of fiscal 2009, net loss to common
shareholders reflects deemed dividends relating to the sale of the
Series E preferred stock of $0.5 million, or $0.06 per diluted
share. For the second quarter of fiscal 2009, the company improved
EBITDA (earnings before interest (net), taxes, depreciation,
amortization, stock based compensation and preferred stock
dividends and deemed dividends) performance by $0.19 per diluted
share, reporting EBITDA of $0.20 per diluted share compared to an
EBITDA of $0.01 per diluted share for the same period of fiscal
2008. "We remain focused on our goal of reaching profitability as
we just delivered our fifth consecutive EBITDA positive quarter,"
said Coughlan. "Excluding the deemed dividends that we incurred
associated with the sale of the Series E preferred stock, we would
have attained our goal of profitability." 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 68,500 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, 2008 (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 STATEMENTS OF OPERATIONS (Amounts in thousands, except
per share amounts) (Unaudited) Three Months Six Months Ended Ended
March 31, March 31, --------- --------- 2009 2008 2009 2008 ----
---- ---- ---- Revenue $16,895 $12,129 $31,538 $19,816 Cost of
goods sold 9,263 6,509 16,858 10,914 Selling, general and
administrative 5,752 5,593 11,653 8,993 Research and development
1,403 1,105 2,810 2,114 ----- ----- ----- ----- Total costs and
expenses 16,418 13,207 31,321 22,021 ------ ------ ------ ------
Operating income (loss) 477 (1,078) 217 (2,205) Net interest income
33 110 72 241 Net interest expense (419) (370) (869) (387) ----
---- ---- ---- Income (loss) before income taxes 91 (1,338) (580)
(2,351) Income tax expense - - - - ---- ---- ---- ---- Net income
(loss) 91 (1,338) (580) (2,351) Preferred stock dividends and
deemed dividends (534) (47) (578) (137) ---- --- ---- ---- Net loss
to common shareholders $(443) $(1,385) $(1,158) $(2,488) =====
======= ======= ======= Net loss per common share - basic and
diluted $(0.05) $(0.17) $(0.14) $(0.30) ====== ====== ====== ======
Weighted average common and common share equivalents Basic and
diluted 8,524 8,306 8,500 8,234 ===== ===== ===== ===== XATA
CORPORATION CONDENSED BALANCE SHEETS (Amounts in thousands) March
31, September 30, 2009 2008 ---- ---- (Unaudited) Current assets
Cash and cash equivalents $3,077 $8,904 Accounts receivable, net
9,656 11,365 Inventories 4,022 2,735 Deferred product costs 1,873
1,474 Current portion of investment in sales- type leases 566 768
Prepaid expenses and other current assets 665 691 --- --- Total
current assets 19,859 25,937 Equipment and leasehold improvements,
net 3,802 3,925 Intangible assets, net 11,572 12,420 Goodwill 3,011
3,011 Deferred product costs, non-current 2,967 2,685 Investment in
sales-type leases, net of current portion 100 310 Debt financing
costs, net 583 708 --- --- Total assets $41,894 $48,996 =======
======= Current liabilities Current portion of long-term
obligations $93 $1,845 Accounts payable 5,101 4,394 Accrued
liabilities 4,919 6,574 Deferred revenue 5,475 4,996 ----- -----
Total current liabilities 15,588 17,809 Long-term obligations, net
of current portion 8,571 16,342 Deferred revenue, non-current 7,502
7,848 Other long-term liabilities 904 805 --- --- Total liabilities
32,565 42,804 Shareholders' equity Preferred stock 16,764 15,963
Common stock 31,815 28,321 Accumulated deficit (39,250) (38,092)
------- ------- Total shareholders' equity 9,329 6,192 ----- -----
Total liabilities and shareholders' equity $41,894 $48,996 =======
======= XATA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES (Amounts in thousands, except per share amounts)
(Unaudited) Three Months Six Months Ended Ended March 31, March 31,
--------- --------- 2009 2008 2009 2008 ---- ---- ---- ---- Net
loss to common shareholders $(443) $(1,385) ($1,158) ($2,488)
Adjustments: Net interest expense 386 260 797 146 Stock-based
compensation 450 501 793 883 Depreciation and amortization expense
753 632 1,486 882 Preferred stock dividends and deemed dividends
534 47 578 137 --- -- --- --- Total adjustments 2,123 1,440 3,654
2,048 ----- ----- ----- ----- Non-GAAP EBITDA $1,680 $55 $2,496
($440) ====== === ====== ===== Non-GAAP EBITDA per diluted share
$0.20 $0.01 $0.29 ($0.05) ===== ===== ===== ====== Shares used in
calculating non-GAAP EBITDA per diluted share 8,524 8,306 8,500
8,234 ----- ----- ----- ----- DATASOURCE: XATA Corporation CONTACT:
Mark Ties, CFO of XATA Corporation, +1-952-707-5600, Web Site:
http://www.xata.com/
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