Xplore Technologies Corp. (TSX:XPL) ("the Company" or "Xplore"), a leading international rugged Tablet PC provider, announced today financial results for the third quarter ended December 31, 2005 of fiscal 2006. All amounts reported are in thousands of United States dollars, except for percentage and per share amounts.
Financial Results of Operations for the Three Months Ended
December 31, 2005
The Company's revenues have increased sequentially for the fifth consecutive quarter and increased approximately 48% when compared to the comparable period in the prior year. For the three months ended December 31, 2005 and 2004, revenue was approximately $7,218 and restated $4,881, respectively. The revenue increase is the result of a number of factors and strategies the Company has adopted, most notably was the Company's award winning AllVue(TM) outdoor readable display technology that continued to penetrate the Fortune 500 and Global 2000 customers and receive market acceptance.
"In early 2005 we implemented a modified approach to the market and expanded our sales team," stated Mark Holleran, Vice President of Sales. He added, "Both of these initiatives are beginning to demonstrate positive returns. Our worldwide channel partners are embracing our tablet technology and are penetrating the global enterprise market."
During the third quarter of fiscal 2006, shipments to existing Xplore end users through its channel partners included BNSF Railway and Rome, Italy Fire Department, in addition to a number of new orders from Government agencies in both the US and European Union. Sales outside the United States accounted for approximately 37% of the third quarter revenue.
Gross profit for the three months ended December 31, 2005 and 2004 was approximately $1,768 and restated $1,180, respectively, and gross profit as a percent of revenue for those periods was 24.5% and restated 24.2%, respectively.
Operating expenses during the quarter ended December 31, 2005 were $3,171 as compared to restated $2,487 for the quarter ended December 31, 2004. The increase in operating expenses is primarily due to increased research and development spending on enhancement initiatives for our Centrino(R) based tablet, including the new Dual Mode AllVue(TM) tablet. An increase in sales and marketing activities associated with the 48% growth in revenues accounted for an increase in related expenses of approximately 17%. These increases in operating expenses were partially offset by a 31% reduction in general administrative expenses attributable to efficiencies gained from cost maintenance programs and non-recurring costs in the prior year related to the physical migration of our headquarters from Toronto to Austin.
The Company's net losses for the three months ended December 31, 2005 and 2004 were approximately $1,953 and restated $1,582, respectively. An increase in interest expense by $269 contributed to the increase in the net loss. Net loss per share was $0.03 for both quarters ended December 31, 2005 and 2004.
Financial Results of Operations for the Nine Months Ended
December 31, 2005
Revenues for the nine months ended December 31, 2005 and 2004 were approximately $19,926 and restated $12,412, respectively. Gross profit for the nine months ended December 31, 2005 and 2004 was approximately $4,889 and restated $2,434, respectively, and gross profit as a percent of revenue for those periods was 24.5% and 19.6%, respectively. Operating expenses during the nine months ended December 31, 2005 were $9,134 as compared to $9,085 for the nine months ended December 31, 2004. The Company's net losses were approximately $5,284 and $7,350 million for the nine months ended December 31, 2005 and 2004, respectively. Net loss per share was $0.10 for the nine months ended December 31, 2005 and $0.15 for the nine months ended December 31, 2004.
Ontario Securities Commission Investigation Update
The Company has entered into a settlement agreement with staff of the Ontario Securities Commission (the "OSC") in connection with the OSC staff investigation of the Company's accounting treatment for revenue recognition in its financial statements for fiscal years 2002, 2003 and 2004. The settlement agreement will be presented for approval to a panel of Commissioners of the OSC at a hearing scheduled on January 27, 2006. The settlement agreement contemplates what the Company believes to be a reasonable settlement arrangement and, if approved by the OSC, will resolve the Company's outstanding regulatory issues with respect to its financial statements.
About Xplore Technologies(R)
Xplore Technologies Corp, founded in 1996, is an innovative leader in the rugged Tablet PC industry. Xplore, which is traded on the Toronto Stock Exchange under the symbol TSX: XPL, has offices in Austin Texas and Helsinki Finland. Its rugged iX104(TM) family of hardware solutions incorporate leading-edge technology, and are designed based on years of customer design input. Xplore's diverse customer base comes from the public safety, retail and wholesale warehousing, utility, military, field service and transportation industries. Xplore hardware solutions are available from Xplore or one of its authorized channel partners, for more information, visit www.xploretech.com.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein. Xplore Technologies is a registered trademark of Xplore Technologies Corporation of America. iX104, iX104R, iX104T, Renegade, All Terrain, iX104C(2) are trademarks of Xplore Technologies Corporation of America. All other tradenames, marked or not, are the sole property of their respective owners.
This news release contains forward-looking statements that involve risks
and uncertainties, which may cause actual results to differ materially
from the statements made. When used in this document, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect Xplore's current
views with respect to future events and are subject to such risks and
uncertainties. Many factors could cause actual results to differ
materially from the statements made including those factors detailed from
time to time in filings made by Xplore with securities regulatory
authorities. Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward looking
statements prove incorrect, actual results may vary materially from those
described herein as intended, planned, anticipated or expected. Xplore
does not intend and does not assume any obligation to update these
forward-looking statements.
(*)Financial Statement Table to Follow(*)
<<
XPLORE TECHNOLOGIES CORP.
Consolidated Statements of Loss - Unaudited
(in thousands of United States dollars, except loss per common share)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
----------------------- -----------------------
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
----------- ----------- ----------- -----------
(Restated) (Restated)
REVENUE $ 7,218 $ 4,881 $ 19,926 $ 12,412
COST OF REVENUE 5,450 3,701 15,037 9,978
----------- ----------- ----------- -----------
GROSS PROFIT 1,768 1,180 4,889 2,434
----------- ----------- ----------- -----------
EXPENSES:
Sales, marketing
and support 1,403 1,191 3,645 3,848
Product research,
development and
engineering 986 161 2,036 1,607
General administration 782 1,135 3,453 3,630
----------- ----------- ----------- -----------
3,171 2,487 9,134 9,085
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (1,403) (1,307) (4,245) (6,651)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (545) (276) (1,899) (653)
Other income (expense) (5) 1 860 (46)
----------- ----------- ----------- -----------
(550) (275) (1,039) (699)
----------- ----------- ----------- -----------
NET LOSS $ (1,953) $ (1,582) $ (5,284) $ (7,350)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
LOSS PER COMMON SHARE $ (0.03) $ (0.03) $ (0.10) $ (0.15)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number
of common shares
outstanding (in 000's) 56,455 52,303 55,485 48,491
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
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%SEDAR: 00004707E
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