MINNEAPOLIS, Feb. 2, 2011 /CNW/ -- Software revenue growth of 17
percent results in a $0.06 non-GAAP earnings per diluted share for
first quarter of fiscal 2011 XATA Corporation (Nasdaq: XATA),
reported results for its first quarter fiscal year 2011 period
ended December 31, 2010. Total revenue was $14.0 million for the
quarter ended December 31, 2010, compared to $17.5 million for the
same period of fiscal 2010. Net loss to common shareholders for the
first quarter of fiscal 2011 was $0.1 million, compared to a net
loss to common shareholders of $1.7 million for the same period in
fiscal 2010. Other comments include: -- Software revenue grew 17
percent to $11.3 million for the quarter ended December 31, 2010,
compared to $9.7 million for the same period of fiscal 2010. -- The
Company acquired 48 new customers in the first quarter of fiscal
2011, bringing its total customer count to approximately 1,500. --
Software revenue grew approximately 5 percent on an organic basis
in the first quarter of fiscal 2011, with our flagship XATANET and
Turnpike products growing at approximately 13 percent. -- Fiscal
2011 first quarter software revenue accounted for 81 percent of
total revenue, compared to 55 percent for the same period of fiscal
2010. -- System and service revenues were $2.6 million in the first
quarter of fiscal 2011 compared to $7.3 million in the first
quarter of fiscal 2010. -- Cash flow from operations was $1.5
million for the first quarter of fiscal 2011. "The increase we
showed in recurring software revenue supports our growth strategy,
but that was offset by the delay we experienced in the transition
to our next generation on-board XATANET platform," said Jay
Coughlan, chairman and president of XATA. "Fortunately, this new
system is scheduled for release this month with several customers
already contracted to receive it. We are excited about this release
and are looking forward to the impact it will have on our market
potential." "Continued improvement in our software margins again
allowed the Company to generate positive non-GAAP earnings and cash
flow from operations," said Mark Ties, chief financial officer of
XATA. Gross margins were 60 percent for the first quarter of fiscal
2011, compared to 45 percent for the same period of fiscal 2010.
This margin increase was driven largely by a favorable revenue mix
shifting towards higher margin software revenue. Software margins
of 75.5 percent for the first quarter of fiscal 2011 were
consistent with the same period of fiscal 2010. For the first
quarter of fiscal 2011 selling, general and administrative costs of
$6.1 million remained flat with the first quarter of fiscal 2010.
The Company's ability to streamline its operations allowed it to
hold these costs flat with fiscal 2010 which only contained one
month of the Turnpike operations which were acquired in December
2009. Research and development costs were $2.2 million and $1.3
million for the first quarter of fiscal 2011 and 2010,
respectively. The increase in fiscal 2011 was driven by additional
investment in research and development costs associated with new
functionality and the impact of the Turnpike acquisition. Net loss
to common shareholders for the first quarter of fiscal 2011
improved to $0.1 million, compared to a net loss to common
shareholders of $1.7 million for the same period in fiscal 2010. As
a result the Company reported a loss of $0.01 per diluted share for
the three months ended December 31, 2010, compared to a loss of
$0.20 per diluted share in the same period last year. For the first
quarter of fiscal 2011, the Company reported non-GAAP earnings
(earnings before interest (net), non-recurring acquisition and
financing related costs, taxes, depreciation, amortization, stock
based compensation and preferred stock dividends and deemed
dividends) of $1.6 million which is flat as compared to the same
period of fiscal 2010. As of December 31, 2010, the Company held
$14.0 million in cash and cash equivalents and had working capital
of $18.0 million, excluding the current portion of long-term
obligations and deferred revenue and applicable deferred costs.
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 non-GAAP earnings,
which is earnings before interest (net), acquisition and financing
related costs, taxes, depreciation, amortization, stock based
compensation and preferred stock dividends and deemed dividends,
and non-GAAP earnings 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. 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 current vehicle
data anywhere, anytime, through our monthly service packages. 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. For more information, visit 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, 2009 (as updated in our subsequent reports filed with the SEC).
These reports are available under the "Investors" section of our
Web site at www.xata.com and through the SEC Web site at
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. CONSOLIDATED STATEMENTS
OF OPERATIONS (Amounts in thousands, except per share amounts)
(Unaudited) Three Months Ended December 31, ------------ 2010 2009
---- ---- Revenue $13,978 $17,523 Cost of goods sold 5,658 9,692
Selling, general and administrative 6,113 6,150 Research and
development 2,224 1,333 Acquisition related costs - 779 Total costs
and expenses 13,995 17,954 ------ ------ Operating loss (17) (431)
Net interest and other expense (83) (276) Interest expense on
financing activities - (779) Acquisition related interest and mark
to market - (162) --- ---- Loss before income taxes (100) (1,648)
Income tax expense (benefit) (15) - Net loss (85) (1,648) Preferred
stock dividends and deemed dividends (35) (65) Net loss to common
shareholders $(120) $(1,713) ===== ======= Net loss per common
share: Basic and diluted $(0.01) $(0.20) ====== ====== Weighted
average common and common share equivalents: Basic and diluted
9,740 8,646 ===== ===== XATA CORPORATION CONSOLIDATED BALANCE
SHEETS (Amounts in thousands) December 31, September 30, 2010 2010
---- ---- (Unaudited) Current assets Cash and cash equivalents
$14,030 $13,374 Accounts receivable, net 6,493 11,392 Inventories
4,107 3,047 Deferred product costs 1,875 2,042 Prepaid expenses and
other current assets 1,134 1,260 ----- ----- Total current assets
$27,639 $31,115 Equipment and leasehold improvements, net 6,651
5,798 Intangible assets, net 14,417 14,901 Goodwill 17,525 17,048
Deferred product costs, non- current 1,491 1,757 Deferred tax
assets 348 337 Other assets 410 420 --- --- Total assets $68,481
$71,376 ======= ======= Current liabilities Current portion of
long-term obligations $973 $839 Accounts payable 3,842 5,138
Accrued expenses 3,917 4,872 Deferred revenue 3,878 5,070 -----
----- Total current liabilities $12,610 $15,919 Long-term
obligations, net of current portion 688 485 Deferred revenue, net
of current portion 2,976 3,591 Deferred tax liabilities 2,317 2,242
Other long-term liabilities 592 638 --- --- Total liabilities
$19,183 $22,875 Shareholders' equity Preferred stock 44,068 43,980
Common stock 44,232 41,637 Contingent common stock earn-out 4,062
6,452 Accumulated deficit (44,249) (44,129) Accumulated other
comprehensive income 1,185 561 --- Total shareholders' equity
49,298 48,501 ------ ------ Total liabilities and shareholders'
equity $68,481 $71,376 ======= ======= XATA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Amounts in
thousands, except per share amounts) (Unaudited) Three Months Ended
December 31, ------------ 2010 2009 ---- ---- Net loss to common
shareholders $(120) $(1,713) Adjustments: Depreciation and
amortization expense 1,440 935 Stock-based compensation 205 287 Net
interest expense 40 282 Preferred stock dividends and deemed
dividends 35 65 Income taxes (15) - Interest expense on financing
activities - 779 Acquisition related interest, mark to market, and
costs - 941 Total adjustments 1,705 3,289 ----- ----- Non-GAAP
earnings $1,585 $1,576 ====== ====== Non-GAAP earnings per diluted
share $0.06 $0.10 ===== ===== Shares used in calculating non-GAAP
earnings per diluted share 26,151 15,181 ====== ====== Mark Ties,
CFO of XATA Corporation, +1-952-707-5600, mark.ties@xata.com Web
Site: http://www.xata.com
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