EX-99.1 2 xt907918ex991.htm

 

Exhibit 99.1

 

 

Message

NEWS RELEASE

 

 

Date:

February 23, 2005

 

FOR IMMEDIATE RELEASE

 

 

Contact:

Cheryl Moll

 

XETA Technologies

 

(918) 664-8200

XETA TECHNOLOGIES REPORTS
FIRST QUARTER RESULTS

Broken Arrow, OK - XETA Technologies (NASDAQ: XETA) today announced fiscal 2005 first-quarter earnings of $0.078 million, or $0.01 per share diluted, on revenues of $13.9 million for the period ending January 31, 2005.  These figures compare to revenues of  $16.9 million with earnings of $0.06 per share diluted for the first quarter of fiscal 2004.

According to Jack Ingram, CEO, “Revenues for the quarter, while down from our strong first quarter of fiscal 2004, were essentially at the run rates we experienced for the last three quarters of that year.  Earnings were slightly below our target range of $0.02 to $0.05 cents, but were generally in line with our expectations.  I am very pleased with our year-over-year increase in services revenues, driven by an 18% increase in the recurring portion of this all-important revenue stream.  This is a strong early indication that we are seeing the expected success in the startup of our Nortel initiative.”

“The first quarter was one of significant operational achievements,” stated Larry Patterson, Executive Director of Operations.   “The $1.2 million multi-site installation project for MARTA is approximately one-third complete.  This high profile and complex series of systems installations and/or moves, along with the related customer training is progressing very well.  The excellent results to date attest to the maturity of our technical expertise with the Nortel product portfolio.”

“In addition, we continue to expand the branch model of operations, which we initiated one year ago.  The Seattle branch has recently expanded into southern California, which is the first step in extending the Seattle branch model throughout the entire west coast.  During the quarter, we also opened a branch office in Denver, Colorado and established the sales and service expertise required to effectively compete in that market.  We now have three branch models in operation, Tulsa, Seattle and Denver and we continue to evaluate additional market opportunities,” added Patterson. 

According to Ingram, “Due to the heavy investments we have made in the buildup of our Nortel sales force, coupled with the aggressive expansion of our branch operations, earnings are expected to remain in this low to mid single digit range until traction is achieved.  We expect this traction by mid fiscal 2005 and remain confident in our published guidance for earnings of $0.20 cents for the year.”

XETA Technologies will host a conference call to discuss fiscal 2005 first-quarter results at 10 a.m. CST on Thursday, February 24.  The media, analysts and investors are invited to participate by dialing 877-209-0397.  A replay of the call will be available from 1:30 p.m. CST that day through 11:59 p.m. CST on March 3, 2005 by dialing 800-475-6701, access code 765662.


 

 

 

Quarter Ending Jan 31st

 

 

 

 

 

 

 

 

2005

 

2004

 

 

 

 

 

 

Sales

Systems

 

 

6,352

 

 

10,018

 

 

Services

 

 

6,931

 

 

6,755

 

 

Other

 

 

632

 

 

156

 

 

Total

 

 

13,915

 

 

16,929

 

Gross Profit Margin

 

 

 

24

%

 

23

%

Operating Expense

 

 

 

3,248

 

 

3,001

 

Income from Operations

 

 

 

17

 

 

955

 

Interest and Other Income (Expense)

 

 

 

112

 

 

-30

 

Net Income After Tax

 

 

 

78

 

 

562

 

Basic Earnings Per Share

 

 

$

0.01

 

$

0.06

 

Diluted Earnings Per Share

 

 

$

0.01

 

$

0.06

 

Wt. Avg. Common Shares Outstanding

 

 

 

10,027

 

 

10,003

 

Wt. Avg. Common Equivalent Shares

 

 

 

10,074

 

 

10,209

 

(The information is presented in thousands except percentages and per-share data.)

 

 

 

 

Jan 31, 2005

 

Oct 31, 2004

 

 

 

 

 

 

 

Assets

Current

Cash

 

 

65

 

 

141

 

 

 

Receivables (net)

 

 

7,531

 

 

9,529

 

 

 

Inventories (net)

 

 

6,112

 

 

4,845

 

 

 

Other

 

 

2,053

 

 

1,557

 

 

 

Subtotal

 

 

15,761

 

 

16,072

 

 

Non-Current

Receivables (net)

 

 

257

 

 

297

 

 

 

PPE (net)

 

 

10,677

 

 

10,727

 

 

 

Goodwill & Intangibles

 

 

26,397

 

 

26,414

 

 

 

Other

 

 

41

 

 

46

 

 

 

Subtotal

 

 

37,372

 

 

37,484

 

 

Total Assets

 

 

 

53,133

 

 

53,556

 

Liabilities

Current

Notes Payable

 

 

1,210

 

 

1,210

 

 

 

Revolving Line of Credit

 

 

1,563

 

 

3,850

 

 

 

Accounts Payable

 

 

4,216

 

 

2,452

 

 

 

Unearned Revenue

 

 

2,040

 

 

1,559

 

 

 

Accrued Liabilities

 

 

2,122

 

 

2,536

 

 

 

Subtotal

 

 

11,151

 

 

11,607

 

 

Non-Current

Long Term Debt

 

 

2,518

 

 

2,820

 

 

 

Other

 

 

3,074

 

 

2,825

 

 

 

Subtotal

 

 

5,592

 

 

5,645

 

 

Total Liabilities

 

 

 

16,743

 

 

17,252

 

Equity

 

 

 

 

36,390

 

 

36,304

 

(The information is presented in thousands.)

# # #


About XETA Technologies

XETA Technologies is a leading provider of communications solutions with sales and service locations nationwide, serving national business clients in sales, consulting, engineering, project management, installation and service support.  Through internal growth and corporate acquisitions, XETA is a frontrunner in the emerging, highly technical world of converged communications solutions for voice, data and video applications.   XETA is one of the largest providers of Avaya voice and data systems and has recently added the Nortel Networks product line of voice and data solutions.   XETA is also the largest distributor for Hitachi’s PBX group—the leading provider of communication systems for the lodging industry—and has long been recognized as the leading provider of call accounting solutions to the hospitality industry.

XETA Technologies has recently been recognized by Business 2.0 magazine’s “Fastest-Growing Technology Companies” and has also been recognized by Fortune Small Business magazine’s Top 100 Fastest-Growing Companies, Fortune magazine’s “100 Fastest-Growing Companies,” Forbes magazine’s “Best 200 Small Companies in America” and BusinessWeek’s  “Top 100 Hot Growth Companies.”  For more information about XETA Technologies, visit www.xeta.com

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 XETA's, revenues and earnings expectations during  fiscal 2005.  These and other forward-looking statements (generally identified by such words as "expects," "plans," "believes," "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, economic conditions in the United States and the telecommunications market specifically, the Company’s ability to successfully exploit the Nortel Networks market, changes in various vendor incentive programs that support the Company's sales and marketing efforts, the long term success of the Company’s growth strategies, market acceptance of and demand for the Company’s product and service offerings, competition, inflation, and the availability and retention of sales professionals and trained technicians.  Additional factors which could affect actual results are described in the section entitled "Outlook and Risk Factors" contained in the Company's Form 10-K for its fiscal year ended October 31, 2004, and its quarterly report on Form 10-Q to be filed for the first quarter of fiscal 2005.