-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BOVu7ye8ac6sxoHH99LN2Lg1w+whSwZjrsi7n7EYea8tORK1xrL02vN+TSOXdnsB geuldSBsej4JZKCbiO31Jw== 0000950134-95-001348.txt : 19950612 0000950134-95-001348.hdr.sgml : 19950612 ACCESSION NUMBER: 0000950134-95-001348 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950609 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: XETA CORP CENTRAL INDEX KEY: 0000742550 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 731130045 STATE OF INCORPORATION: OK FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16231 FILM NUMBER: 95546235 BUSINESS ADDRESS: STREET 1: 4500 S GARNETT STE 1000 CITY: TULSA STATE: OK ZIP: 74146 BUSINESS PHONE: 9186648200 MAIL ADDRESS: STREET 1: 4500 S GARNETT SUITE 1000 CITY: TULSA STATE: OK ZIP: 74146 10QSB 1 FORM 10-QSB FOR QUARTER ENDED APRIL 30, 1995 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED APRIL 30, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-16231 XETA Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Oklahoma 73-1130045 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4500 S. Garnett, Suite 1000, Tulsa, Oklahoma 74146 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) 918-664-8200 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
Class Outstanding at May 1, 1995 - -------------------------------- -------------------------- Common Stock, $.10 par value 1,809,873
Page 1 of 14 consecutive pages Exhibit Index appears on Page 14. 2 PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS Page No. ------- Consolidated Balance Sheets - April 30, 1995 3 and October 31, 1994 Consolidated Statements of Operations - For the 4 Three and Six Months Ended April 30, 1995 and 1994 Consolidated Statements of Shareholders' Equity - 5 November 1, 1994 through April 30, 1995 Consolidated Statements of Cash Flows - For the 6 Six Months Ended April 30, 1995 and 1994 Notes to Consolidated Financial Statements 7
2 3 XETA CORPORATION CONSOLIDATED BALANCE SHEETS ASSETS
April 30, 1995 October 31, 1994 -------------- ---------------- (Unaudited) Current Assets: Cash and cash equivalents $1,969,448 $1,630,531 Current portion of net investment in sales-type leases 1,291,611 904,725 Other receivables, net 1,832,704 962,536 Inventories, net (Note 3) 581,039 710,407 Prepaid income taxes -- 188,714 Current deferred tax asset, net (Note 6) 421,504 302,143 Prepaid expenses and other assets 104,999 45,041 ---------- ---------- Total current assets 6,201,305 4,744,097 ---------- ---------- Noncurrent Assets: Net investment in sales-type leases, less current portion above 2,341,170 1,736,122 Property, plant, & equipment, net (Note 4) 322,849 354,219 Capitalized software production costs, net of accumulated amortization of $289,856 at April 30, 1995 and $262,400 at Oct. 31, 1994 123,336 115,556 Other assets 161,025 113,761 ---------- ---------- Total noncurrent assets 2,948,380 2,319,658 ---------- ---------- Total assets $9,149,685 $7,063,755 ========== ========== LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 401,024 $ 241,745 Unearned revenue (Note 5) 1,932,348 1,759,293 Accrued liabilities 481,277 372,163 Accrued federal and state income taxes 593,139 89,466 ---------- ---------- Total current liabilities 3,407,788 2,462,667 ---------- ---------- Unearned service revenue (Note 5) 1,565,344 1,202,029 ---------- ---------- Noncurrent deferred tax liability, net (Note 6) 81,217 174,933 ---------- ---------- Commitments (Note 10) Shareholders' equity: Common stock; $.10 par value; 10,000,000 shares authorized, 1,999,620 and 1,964,620 issued and outstanding at April 30, 1995 and October 31, 1994, respectively 199,962 196,462 Paid-in capital 4,050,498 4,011,185 Retained earnings (deficit) 104,616 (723,781) ---------- ---------- 4,355,076 3,483,866 Less treasury stock, at cost (259,740) (259,740) ---------- ---------- Total shareholders' equity 4,095,336 3,224,126 ---------- ---------- Total liabilities & shareholders' equity $9,149,685 $7,063,755 ========== ==========
The accompanying notes are an integral part of these statements. 3 4 XETA CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months For the Six Months Ending April 30, Ending April 30, 1995 1994 1995 1994 ---- ---- ---- ---- Sales of systems $1,782,481 $ 959,358 $3,622,407 $1,490,062 Installation and service revenues 1,261,247 851,512 2,482,250 1,556,945 ---------- ---------- ---------- ---------- Net sales and service revenues 3,043,728 1,810,870 6,104,657 3,047,007 ---------- ---------- ---------- ---------- Cost of sales 1,075,973 485,816 1,929,773 698,302 Installation and service cost 796,589 539,602 1,553,537 1,063,881 ---------- ---------- ---------- ---------- Total cost of sales and service 1,872,562 1,025,418 3,483,310 1,762,183 ---------- ---------- ---------- ---------- Gross profit 1,171,166 785,452 2,621,347 1,284,824 ---------- ---------- ---------- ---------- Operating expense: Selling, general and administrative 635,703 498,134 1,300,211 912,199 Engineering, research and development, and amortization of capitalized software production costs 131,547 114,968 252,237 227,764 ---------- ---------- ---------- ---------- Total operating expenses 767,250 613,102 1,552,448 1,139,963 ---------- ---------- ---------- ---------- Income from operations 403,916 172,350 1,068,899 144,861 Interest and other income 95,539 36,779 173,888 464,500 Interest and other expense -- (429) -- (1,030) ---------- ---------- ---------- ---------- Income before provision for income taxes 499,455 208,700 1,242,787 608,331 Provision for income taxes 208,941 22,500 414,390 22,500 ---------- ---------- ---------- ---------- Net income $ 290,514 $ 186,200 $ 828,397 $ 585,831 ========== ========== ========== ========== Income per common and common equivalent share - primary and fully diluted $ .12 $ .08 $ .36 $ .26 ========== ========== ========== ========== Weighted avg. shares outstanding 1,799,120 1,919,694 1,787,857 1,942,157 ========== ========== ========== ========== Weighted avg. share equivalents 2,370,951 2,225,755 2,308,780 2,248,218 ========== ========== ========== ==========
The accompanying notes are an integral part of these statements. 4 5 XETA CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY NOVEMBER 1, 1994 THROUGH APRIL 30, 1995 (Unaudited)
Common Stock Treasury Stock ------------------------- ----------------------- Number of Retained Shares Issued Paid-in Earnings & Outstanding Par Value Shares Amount Capital (Deficit) ------------- --------- ------ ------ ------- ----------- Balance - October 31, 1994 1,964,620 $196,462 (189,747) $(259,740) $4,011,185 $(723,781) Stock options exercised 10,000 1,000 9,000 Stock warrants exercised 25,000 2,500 30,313 Net income 828,397 --------- -------- -------- --------- ---------- --------- Balance - April 30, 1995 1,999,620 $199,962 (189,747) $(259,740) $4,050,498 $ 104,616 ========= ======== ======== ========= ========== =========
The accompanying notes are an integral part of these statements. 5 6 XETA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For The Six Months Ending ------------------------- April 30, 1995 April 30, 1994 -------------- -------------- Cash flows from operating activities: Net income $ 828,397 $ 585,831 ---------- ---------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 79,552 120,826 Amortization of capitalized software production costs 27,456 48,786 Gain on sale of subsidiary stock -- (400,000) Gain on sale of assets (23,061) (93) Provision for doubtful accounts receivable 30,000 30,000 Provision for excess and obsolete inventory 15,330 28,453 Change in assets and liabilities: (Increase) decrease in net investment in sales-type leases (991,934) (143,183) (Increase) decrease in other receivables (900,168) 175,527 (Increase) decrease in inventories 114,038 (232,807) (Increase) decrease in prepaid income taxes 188,714 168,950 Increase in deferred tax asset (119,361) (73,714) (Increase) decrease in prepaid expenses and other assets (107,222) (35,464) Increase (decrease) in accounts payable 159,279 (76,564) Increase (decrease) in unearned revenue 536,371 52,774 Increase (decrease) in accrued liabilities 519,071 78,762 ---------- ---------- Total adjustments (471,935) (257,747) ---------- ---------- Net cash provided by (used in) operating activities 356,462 328,084 ---------- ---------- Cash flows from investing activities: Proceeds from sale of XRS stock (Note 5) -- 400,000 Additions to property, plant & equipment (59,380) (107,406) Additions to capitalized software production costs (35,237) -- Proceeds from sale of assets 34,259 -- ---------- ---------- Net cash provided by (used in) investing activities (60,358) 292,594 ---------- ---------- Cash flows from financing activities: Purchase of treasury stock -- (194,537) Exercise of stock options and warrants 42,813 -- ---------- ---------- Net cash used in financing activities 42,813 (194,537) ---------- ---------- Net increase (decrease) in cash and cash equivalents 338,917 426,141 Cash and cash equivalents, beginning of period 1,630,531 997,755 ---------- ---------- Cash and cash equivalents, end of period $1,969,448 $1,423,896 ========== ========== Supplemental disclosure of cash flow information: Cash paid during the period for interest $ -- $ 739 Cash paid during the period for income taxes $ 40,649 $ 55,000
The accompanying notes are an integral part of these statements. 6 7 XETA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS April 30, 1995 (Unaudited) (1) BASIS OF PRESENTATION The consolidated financial statements included herein include the accounts of XETA Corporation and its wholly-owned subsidiary, Xetacom, Inc. Xetacom's operations have been insignificant to date. All significant intercompany accounts and transactions have been eliminated. The consolidated financial statements have been prepared by the Company, without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made in these financial statements are adequate to make the information presented not misleading when read in conjunction with the consolidated financial statements and the notes thereto included in the Company's latest financial statements filed as part of the Company's Annual Report on Form 10-KSB, Commission File No. 0-16231. Management believes that the financial statements contain all adjustments necessary for a fair statement of the results for the interim periods presented. All adjustments made were of a normal recurring nature. (2) REVOLVING CREDIT AGREEMENT On March 7, 1995, the Company renewed and increased its $350,000 revolving line of credit at substantially the same terms and covenants as the previous agreement. The Company is in compliance with all of the provisions of the credit agreement. No advances have been made under either the previous or the extended credit agreement. In conjunction with a distributorship agreement with one of the Company's major vendors, the Company has provided a $75,000 letter of credit agreement to the vendor. Under the current credit agreement, the letter of credit reduces the Company's available borrowing line for other uses to $275,000. (3) INVENTORIES The following are the components of inventories:
April 31, October 31, 1995 1994 ---------- ---------- (Unaudited) Raw materials $ 136,718 $ 134,423 Finished goods 874,623 856,932 Work-in-process 18,729 18,435 ---------- ---------- 1,030,070 1,009,790 Less reserve for excess and obsolete inventory 449,031 299,383 ---------- ---------- $ 581,039 $ 710,407 ========== ==========
7 8 (4) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following:
April 30, October 31, 1995 1994 --------- ---------- (Unaudited) Computer field equipment $ 635,100 $619,896 Office furniture 107,343 98,212 Other 106,277 104,157 ---------- -------- 848,720 822,265 Less accumulated depreciation 525,871 468,046 ---------- -------- $ 322,849 $354,219 ========== ========
(5) UNEARNED INCOME Unearned income consists of the following:
April 30, October 31, 1995 1994 ---------- ---------- (Unaudited) Service contracts $ 788,181 $ 665,870 Warranty service 665,040 462,279 Systems shipped, but not installed 74,207 119,495 Customer deposits 346,563 451,896 Other deferred revenues 58,357 59,753 ---------- ---------- Total current deferred revenue 1,932,348 1,759,293 Noncurrent unearned service revenues 1,565,344 1,202,029 ---------- ---------- $3,497,692 $2,961,322 ========== ==========
(6) INCOME TAXES The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
April 30, 1995 Oct. 31, 1994 -------------- ------------- (Unaudited) --------- Deferred tax assets: Prepaid service contracts $ 223,024 $ 211,557 Nondeductible reserves 396,323 277,877 Book depreciation in excess of tax -- 23,142 Other 50,280 70,201 --------- --------- Total deferred tax asset 669,627 582,777 --------- --------- Deferred tax liabilities: Unamortized capitalized software development costs (41,935) (39,289) Tax income to be recognized on sales-type lease contracts (287,405) (308,660) --------- --------- Total deferred tax liability (329,340) (347,949) --------- --------- Net deferred tax asset 340,287 234,828 Less valuation allowance -- (107,618) --------- --------- Net deferred tax asset $ 340,287 $ 127,210 ========= =========
8 9 In accordance with FAS 109, the Company recorded a valuation allowance against the net deferred tax asset at October 31, 1994 as the realization of the future benefits associated with the reversal of the temporary differences above was not assured. During the period ending April 30, 1995, the Company recognized the remaining previously reserved tax asset to reduce its federal tax provision. (7) INTEREST AND OTHER INCOME Interest and other income for the quarter and six months ending April 30, 1995, consists primarily of interest income earned from sales-type leases and cash investments. (8) FOOTNOTES INCORPORATED BY REFERENCE Certain footnotes are applicable to the consolidated financial statements, but would be substantially unchanged from those presented in the Company's Annual Report on Form 10-KSB, Commission File No. 0-16231, filed with the Securities and Exchange Commission on January 25, 1995. Accordingly, reference should be made to those statements for the following:
Note Description ---- ----------- 1 Business and summary of significant accounting policies 3 Cash and cash equivalents 4 Income taxes 5 Preferred stock in Xeta Reservation Systems, Inc. 7 Accrued liabilities 9 Stock options 10 Commitments 11 Major customers 13 Other receivables 14 Employment agreements 15 Contingency 16 Earnings per share
9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS During the second quarter of fiscal 1995, XETA Corporation ("the Company") recorded a 68% increase in revenues compared to the second quarter of fiscal 1994. For the year to date, revenues have increased 100% over the previous year. After tax net income increased 56% and 41% for the three and six month periods ending April 30, 1995, respectively, compared to the same periods in fiscal 1994. Management attributes these gains to the mandated changes in the North American Numbering Plan ("NANP"), continued acceptance of its XL Series call accounting systems and its PBX product and service offerings. The changes in the NANP, which began taking effect in mid-1994, consist of several changes in the dialing patterns of phone numbers used in most of North America. With respect to hotel telecommunications equipment, the most significant change was to begin issuing area codes with a middle digit other than a zero or one. This change has enabled much needed new area codes to be issued. Development of modifications to the Company's products to accommodate this change were completed in mid-1994 and the Company has experienced a surge in orders for upgrades of systems for the past three quarters. Many of these orders have been for complete replacement of existing call accounting and answer detection systems as customers have chosen to install the Company's XL Series PC-based systems. The Company has also been active in the upgrade of existing Hitachi PBX systems to comply with the NANP changes, although the magnitude of these orders is significantly less than the revenues generated by upgrades and replacements of the Company's call accounting and answer detection systems. Subsequent to April 30, 1995, the Company received orders for an additional 250 call accounting systems representing approximately $1.2 million in system sales plus associated installation and service revenues. Installations of these systems are expected to occur ratably over the next four quarters. These orders represent the majority of the remainder of the upgrade orders expected to be received as a result of the NANP. Management continues to be pleased with the success of its entry into the PBX product and service market. Revenues from sales of new PBX systems increased nearly 50% during the second quarter as compared to the first quarter of fiscal 1995 and have increased well over 100% over fiscal 1994 levels. The Company continues to expand this area of its business. It has recently opened a sales office in Indianapolis to serve the midwestern United States, and has plans to locate additional offices in the northeast and southeast in the near future. The increase in the size of the sales force in conjunction with the continued market acceptance of the Company's PBX product offering is expected to result in continued growth in revenues and increasing market share related to PBX activities, although no assurance can be given. Financial Condition During the first six months of fiscal 1995, the Company continued to strengthen its financial condition. During this period, total assets of the Company grew 30% and net worth increased 27%. Management has utilized the Company's financial strength and cash balances in the Company's marketing programs, primarily through expanding its XETAPLAN program to customers needing to upgrade their systems to comply with the NANP changes. The offering of favorable payment terms was a key factor in many customers' decisions, including some of the Company's major customers, to upgrade their systems with new equipment. 10 11 Management continues to evaluate alternatives for effective use of its cash balances and overall financial strength. The expansion of the XETAPLAN program discussed above and the stock repurchase program which occurred during fiscal 1994 are directly attributable to those evaluations. Alternatives which management expects to consider as the opportunity arises include additional financing programs similar to the XETAPLAN program and synergistic acquisitions to further expand the Company's presence in the lodging market. Results of Operations Net sales and service revenues increased 68% and 100% for the three and six month periods ending April 30, 1995, respectively, compared to those same periods in 1994. Sales of new systems increased 86% and 143% for the three and six month periods, respectively. This increase consisted of increases in sales of call accounting/answer detection systems primarily related to the NANP changes discussed above and increases in sales of PBX systems. Sales of new PBX systems grew to 58% of total systems sales in the second quarter of fiscal 1995 compared to 50% in the second quarter of fiscal 1994. Installation and service revenues increased 48% and 59% for the three and six month periods ending April 30, 1995, respectively, compared to the same periods in fiscal 1994. These revenues have also been positively affected by the increased installation activity related to the NANP changes and the Company's rapid expansion into the PBX service market. While revenues from maintenance contracts on call accounting and answer detection systems still represent the majority of the Company's installation and service revenues, approximately one-third of service revenues are now earned from PBX installation and service activities. Although much of the recent increase in revenues is the result of the changes in the NANP, management believes that through the continued commitment of resources to hire experienced sales and technical personnel for its PBX product and service lines, further enhancements of existing products, and the introduction of new products, it is possible the Company can sustain the current sales levels in the future. Gross margins earned on net sales and service revenues was 39% in the second quarter of fiscal 1995 compared to 43% in the second quarter of fiscal 1994. For the year to date period ending April 30, 1995, gross margins on all revenues was 43% compared to 42% for the year earlier period. The gross margins earned on systems sales has decreased during fiscal 1995 reflecting the increased proportion of PBX products sold compared to call accounting products. Margins on sales of PBX and voice mail systems, which the Company sells as an authorized distributor for the manufacturers, are lower than the margins earned on Company manufactured products such as the XL Series product line. Gross margins earned on installation and service revenues were 37% for the second quarters of both fiscal 1995 and fiscal 1994. Margins earned on installation and service revenues increased from 32% for the first six months of fiscal 1994 to 37% for the first half of fiscal 1995, reflecting the fact that the revenues from these activities has grown to a sufficient level to sustain the increases in personnel and the additions of new service locations that have been necessary to be successful in the PBX installation and service market. Operating expenses increased 25% in the second quarter of fiscal 1995 compared to the second quarter of fiscal 1994 and are up 36% for the first six months of fiscal 1995 compared to the first half of fiscal 1994. Although overhead expenses related to engineering, accounting and administration have increased slightly as personnel has been added to 11 12 handle the recent growth of the Company, most of the increases in operating costs relate to commissions and executive bonuses which generally increase in proportion to sales levels and profitability. In addition to these costs, the Company continues to invest in research and development activities recognizing that new product development and the service capabilities designed into its products have been a key factor in the Company's success throughout its history. During the quarter just ended, some of these projects reached the technologically feasible stage and in accordance with generally accepted accounting principles, approximately $35,000 of software production costs were capitalized. Interest and other income increased $59,000 or 160% in the quarter ending April 30, 1995 compared to the same quarter in fiscal 1994. For the year to date periods, interest and other income was $174,000 in fiscal 1995 compared to $464,000 in fiscal 1994. Other income in fiscal 1994 includes a $400,000 gain from the sale of the Company's investment in XETA Reservations Systems, Inc. and therefore was not a recurring event. Interest and other income recognized during fiscal 1995 consists primarily of interest income earned on the Company's investment in sales-type leases and cash investments. During fiscal 1995, the number of sales-type leases has increased dramatically as the Company offered its XETAPLAN program at favorable lease rates to encourage its customers to upgrade their existing systems with new Company systems. Interest income has also increased as a result of a 20% increase in cash balances during the first half of fiscal 1995 and overall higher interest rates earned on short term investments in fiscal 1995 compared to fiscal 1994. The provision for federal and state income taxes increased from $23,000 during the second quarter of fiscal 1994 to $209,000 in the second quarter of fiscal 1995 and increased from $23,000 for the first half of fiscal 1994 to $414,000 for the first half of fiscal 1995. At the beginning of fiscal 1994, the Company recorded a net tax asset in accordance with the adoption of Financial Accounting Standards (SFAS) No. 109. SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future consequences of events that have been included in a company's financial statements or tax return. In accordance with SFAS 109, the Company recorded a valuation allowance equal to the net tax asset as the realization of the future benefits associated with the reversal of the temporary timing differences was not assured. During fiscal 1994, the Company reduced the valuation allowance to reflect the realization of $389,000 in tax benefits of reversing timing differences. During the first quarter of fiscal 1995, the Company reduced the valuation allowance to zero reflecting the realization of the remaining $107,000 in tax benefits of reversing timing differences. 12 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings There has been no material change in the Company's position with respect to the Phonometrics patent infringement litigation filed against certain of the Company's customers and implicating the Company's call accounting systems (along with other vendors' call accounting, voice mail, and PBX systems), as discussed in more detail in the Company's Form 10-KSB for the fiscal year ended October 31, 1994, filed with the SEC in January, 1995. As of June 9, 1995, the Company has not been named as a party in any of these lawsuits. The lawsuits pending against the Company's customers are still in the early stages and the Company is not aware of any significant developments or progress in any of these cases since its disclosure of this matter in its 10-QSB for the first quarter of fiscal 1995. The Company continues to believe that its legal position in defense of Phonometrics' allegations of patent infringement is strong. Items 2 through 5 of Part II have been omitted because they are inapplicable or the response thereto is negative. Item 6. (a) Exhibits - See the Exhibit Index at Page 14. (b) Reports on Form 8-K - During the quarter for which this report is filed, the Registrant did not file any reports with the Securities and Exchange Commission on Form 8-K. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. XETA CORPORATION (Registrant) Dated: June 9, 1995 By: /s/ JACK R. INGRAM ------------------ --------------------------- Jack R. Ingram President Dated: June 9, 1995 By: /s/ ROBERT B. WAGNER ------------------ --------------------------- Robert B. Wagner Vice President of Finance 13 14 EXHIBIT INDEX
SEC. NO. Description Page - ------- ----------- ---- (2) Plan of acquisition, reorganization, arrangement, liquidation or succession - None. - (4) Instruments defining rights of security holders, including indentures - previously filed as Exhibits 3.1, 3.2 and 3.3 to the Registrant's Registration Statement on Form S-1, Registration No. 33-7841. - (11) Statement re: computation of per share earnings - Inapplicable. - (15) Letter re: unaudited interim financial information - Inapplicable. - (18) Letter re: change in accounting principles - Inapplicable. - (19) Previously unfiled documents - Indicated by asterisk (*). - (20) Report furnished to security holders - None. - (23) Published report regarding matters submitted to a vote of security holders - None. - (24) Consents of experts and counsel - None. - (25) Power of attorney - None. - (27) Financial Data Schedule - (28) Additional exhibits - None. -
14 EX-27 2 EXHIBIT 27 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM APRIL 30, 1995 BALANCE SHEET, YEAR-TO-DATE OPERATING AND CASH FLOW STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10 QSB. 0000742550 XETA CORP 6-MOS OCT-31-1995 APR-30-1995 1,969,448 0 1,832,704 0 581,039 6,201,305 322,849 79,552 9,149,685 3,407,788 0 199,962 0 0 0 9,149,685 6,104,657 6,104,657 3,483,310 3,483,310 0 30,000 0 1,242,787 414,390 0 0 0 0 828,397 0.36 0.36
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