8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 9, 2006

XETA Technologies, Inc.

(Exact name of registrant as specified in its charter)

Oklahoma	0-16231	73-1130045
(State or other jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)
1814 West Tacoma, Broken Arrow, Oklahoma		74012
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:  918-664-8200

(Former name or address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 8.01   Other Events.

On October 9, 2006, the Company issued a press release announcing that the Company has retired approximately $36 million in debt, which was used to finance four strategic acquisitions made between November 1999 and November 2000, freeing up approximately $1 million in cash flows annually.  The Company simultaneously announced that the Company’s Board of Directors approved a stock repurchase program with this increase in cash flow.   The program authorizes the Company to utilize up to $960,000 per year to repurchase its outstanding common stock, in such amounts and at such prices and times as the Company’s management deems appropriate.  The stock repurchase program is described in greater detail in the press release, a copy of which is attached to this report as Exhibit 99.1 and incorporated herein by reference.  The foregoing description of the press release is qualified in its entirety by reference to such Exhibit.

Item 9.01   Financial Statements and Exhibits.

(d)           Exhibits

99.1Press Release dated October 9, 2006 entitled “XETA Technologies Announces Retirement of Acquisition Debt; Approval of Stock Repurchase Program.”

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 hereunto duly authorized.

	XETA Technologies, Inc.
	(Registrant)
Dated:   October 10, 2006	By:	/s/ Robert B. Wagner
	Robert B. Wagner, Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated October 9, 2006 entitled “XETA Technologies, Inc. Announces Retirement of Acquisition Debt; Approval of Stock Repurchase Program”.

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EX-99.1

Exhibit 99.1

NEWS RELEASE

Date:	October 9, 2006
	FOR IMMEDIATE RELEASE
Contact:	Cheryl Moll
	XETA Technologies
	(918) 588-4624

XETA TECHNOLOGIES, INC. ANNOUNCES

RETIREMENT OF ACQUISITION DEBT;

APPROVAL OF STOCK REPURCHASE PROGRAM

Broken Arrow, Oklahoma – October 9, 2006 —  XETA TECHNOLOGIES, INC. (NASDAQ: XETA) announced today that it has retired the remaining acquisition related debt incurred to transform the Company from a niche provider of traditional PBX systems to the hospitality industry, to a leading provider of converged voice and data applications to enterprise-class customers.  This debt, which totaled approximately $36 million, was used to finance four strategic acquisitions between November 1999 and November 2000 and launched the Company’s aggressive expansion.  Retirement of the debt will free up approximately $1 million in cash flows annually.

With this increase in cash flow, the Company’s board of directors has approved a stock repurchase program authorizing the Company to utilize up to $960,000 per year to repurchase its outstanding common stock.  Under this program, XETA common stock may be repurchased in the open market, in block transactions, in privately negotiated transactions or otherwise in such amounts and at such prices as the Company’s management deems appropriate.  The amount and timing of the repurchases will be based on various factors, including general market conditions, the market price of XETA common stock, Company-imposed black-out periods during which the Company and its insiders are prohibited from trading in XETA common stock and management’s assessment of the Company’s financial position and liquidity.  The program may be modified, suspended, extended or terminated by the Company at any time without prior notice.  Officers and directors of the Company may participate in the program.

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About XETA Technologies

XETA Technologies is a leading provider of converged voice and data communications solutions and managed services to enterprise-class customers. XETA has sales and service locations nationwide and provider Avaya and Nortel communication solutions to its customers. XETA also markets a line of proprietary call accounting systems to the hospitality industry and has long been recognized as the leading provider of call accounting solutions to that industry. More information about XETA (NASDAQ: XETA) is available at www.xeta.com.

Forward Looking Statements

This news release contains forward-looking statements, which are made subject to the provisions of the Private Securities Litigation Reform Act of 1995.  These statements include statements concerning future purchases by the company of its common stock and revenues and earnings expectations.  These and other forward-looking statements (generally identified by such words as “expects,” “plans,” “believes,” “likely,” “anticipates” and similar words or expressions) reflect management’s current expectations, assumptions, and beliefs based upon information currently available to management.  Investors are cautioned that all forward-looking statements are subject to certain risks and uncertainties which are difficult to predict and that could cause actual results to differ materially from those projected.  These risks and uncertainties include, but are not limited to: the timing and amount of revenues that may be recognized by the company, continuation of current revenue and expense trends (including trends affecting charge-offs), absence of unforeseen changes in the company’s markets, legal and regulatory changes and general changes in the economy (particularly in the markets served by the company).  Additional factors that could affect actual results are described in Item 1.A entitled “ Risk Factors” contained in Part I of the company’s Form 10-K for its fiscal year ended October 31, 2005, as updated in its Form 10-Q for the fiscal quarter ended July 31, 2006.