XATA Xrs Corporation (MM)

Earnings per share improved $0.07 per share as software revenue grew 22 percent in the third quarter of fiscal 2009 MINNEAPOLIS, Aug. 5 /PRNewswire-FirstCall/ -- XATA Corporation (NASDAQ: XATA), today reported third quarter revenue of $17.6 million for the period ended June 30, 2009, an increase of 9 percent compared to $16.2 million for the same period in fiscal 2008. The increase in revenue was primarily driven by a 22 percent growth in software revenue and the acquisition of 6 new customers in the third quarter of fiscal 2009. Software revenue for the third quarter of fiscal 2009, including monthly subscriptions from XATANET and monthly fees from our MobileMax and OpCenter(TM) product lines, accounted for 51 percent of total revenue compared to 45 percent for the same quarter of fiscal 2008. For the third quarter of fiscal 2009 XATANET revenue increased by 28 percent compared to the same period of fiscal 2008. "Our third quarter results continue to support the trucking industry's demand for software solutions that enhance fleet optimization and lower operating costs," said Jay Coughlan, chairman and president of XATA Corporation. "With over 71,000 systems deployed in the private fleet and for-hire segments of the trucking industry we remain focused on our goal of achieving a deployed system base in excess of 100,000 systems in the next few years." Operationally, gross margins as a percent of revenue decreased to 43 percent for the third quarter of fiscal 2009 compared to 44 percent for the same period of fiscal 2008 driven by an 18 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 third quarter of fiscal 2009 compared to 69 percent for the same period of fiscal 2008. Selling, general and administrative costs were $5.7 million or 32 percent of revenue and $6.1 million or 38 percent of revenue for the third quarter of fiscal 2009 and 2008, respectively. As a percentage of revenue, these costs decreased 6 percentage points as a result of decreased personnel costs and continuing to leverage this cost structure. Research and development costs were $1.4 million and $1.3 million for the third quarter of fiscal 2009 and 2008, respectively. Research and development costs remained constant at 8 percent of revenue for the third fiscal quarter of 2009 and 2008. The company reported an improvement in earnings per share for the third quarter of fiscal 2009 of $0.07 per share as the net loss to common shareholders improved to $0.1 million, or $0.01 per diluted share, compared to a net loss to common shareholders of $0.7 million, or $0.08 per diluted share for the same period of fiscal 2008. For the third quarter of fiscal 2009, EBITDA (earnings before interest (net), taxes, depreciation, amortization, stock based compensation and preferred stock dividends and deemed dividends) increased by $0.06 per diluted share. The company reported EBITDA of $1.6 million and $0.18 per diluted share compared to an EBITDA of $1.0 million and $0.12 per diluted share for the same period of fiscal 2008. "Our third quarter results continue to show our commitment to achieving profitability as we just delivered our sixth consecutive EBITDA positive quarter," said Mark Ties, chief financial officer of XATA. "We remain focused on improving our profitability while remaining opportunistic in investing in revenue growth." 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 71,000 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, 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 Nine Months Ended Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenue $17,589 $16,167 $49,127 $35,983 Cost of goods sold 10,085 9,016 26,943 19,930 Selling, general and administrative 5,712 6,064 17,364 15,057 Research and development 1,407 1,279 4,218 3,393 ----- ----- ----- ----- Total costs and expenses 17,204 16,359 48,525 38,380 ------ ------ ------ ------ Operating income (loss) 385 (192) 602 (2,397) Interest income 24 86 96 327 Interest expense (375) (531) (1,244) (918) ---- ---- ------ ---- Income (loss) before income taxes 34 (637) (546) (2,988) Income tax expense - - - - --- --- --- --- Net income (loss) 34 (637) (546) (2,988) Preferred stock dividends and deemed dividends (96) (75) (674) (212) --- --- ---- ---- Net loss to common shareholders $(62) $(712) $(1,220) $(3,200) ==== ===== ======= ======= Net loss per common share - basic and diluted $(0.01) $(0.08) $(0.14) $(0.39) ====== ====== ====== ====== Weighted average common and common share equivalents Basic and diluted 8,588 8,411 8,530 8,293 ===== ===== ===== ===== XATA CORPORATION CONDENSED BALANCE SHEETS (Amounts in thousands) June 30, September 30, 2009 2008 ---- ---- (Unaudited) Current assets Cash and cash equivalents $3,641 $8,904 Accounts receivable, net 9,075 11,365 Inventories 4,226 2,735 Deferred product costs 2,033 1,474 Current portion of investment in sales- type leases 423 768 Prepaid expenses and other current assets 599 691 --- --- Total current assets 19,997 25,937 Equipment and leasehold improvements, net 3,837 3,925 Intangible assets, net 11,149 12,420 Goodwill 3,011 3,011 Deferred product costs, non-current 2,665 2,685 Investment in sales-type leases, net of current portion 57 310 Debt financing costs, net 520 708 --- --- Total assets $41,236 $48,996 ======= ======= Current liabilities Current portion of long-term obligations $95 $1,845 Accounts payable 5,227 4,394 Accrued liabilities 4,639 6,574 Deferred revenue 5,283 4,996 ----- ----- Total current liabilities 15,244 17,809 Long-term obligations, net of current portion 8,546 16,342 Deferred revenue, non-current 6,830 7,848 Other long-term liabilities 862 805 --- --- Total liabilities 31,482 42,804 Shareholders' equity Preferred stock 16,860 15,963 Common stock 32,206 28,321 Accumulated deficit (39,312) (38,092) ------- ------- Total shareholders' equity 9,754 6,192 ----- ----- Total liabilities and shareholders' equity $41,236 $48,996 ======= ======= XATA CORPORATION 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, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Net loss to common shareholders $(62) $(712) ($1,220) ($3,200) Adjustments: Net interest expense 351 445 1,148 591 Stock-based compensation 402 355 1,195 1,238 Depreciation and amortization expense 764 819 2,250 1,701 Preferred stock dividends and deemed dividends 96 75 674 212 -- -- --- --- Total adjustments 1,613 1,694 5,267 3,742 ----- ----- ----- ----- Non-GAAP EBITDA $1,551 $982 $4,047 $542 ====== ==== ====== ==== Non-GAAP EBITDA per diluted share $0.18 $0.12 $0.47 $0.07 ===== ===== ===== ===== Shares used in calculating non-GAAP EBITDA per diluted share 8,588 8,411 8,530 8,293 ===== ===== ===== ===== DATASOURCE: XATA Corporation CONTACT: Mark Ties, CFO of XATA Corporation, +1-952-707-5600, Web Site: http://www.xata.com/

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