Xata Reports Fiscal 2011 Third Quarter Results
Xata Turnpike software revenues increased 51 percent in the third quarter of fiscal 2011 compared to the same period of fiscal 2010
MINNEAPOLIS, Aug. 4, 2011 — Xata Corporation (NASDAQ:XATA) reported results for its third quarter of fiscal year 2011 ended June 30, 2011.
Total revenue was $17.0 million for the quarter ended June 30, 2011, compared to $18.0 million for the same period of fiscal 2010. Net loss to common shareholders for the third quarter of fiscal 2011 was $0.5 million, compared to net income to common shareholders of $0.6 million for the same period of fiscal 2010. Other comments include:
- Software revenue increased $0.4 million from $11.0 million to $11.4 million for the quarters ended June 30, 2010 and 2011, respectively. The 3 percent growth in software revenue in the third quarter of fiscal 2011 was fueled by growth in our SaaS products. Specifically, third quarter software revenue from our XataNet and Xata Turnpike solutions increased 4 percent and 51 percent, respectively.
- Fiscal 2011 third quarter software revenue accounted for approximately 67 percent of total revenue, compared to 62 percent for the same period of fiscal 2010.
- The Company acquired 58 new customers in the third quarter of fiscal 2011.
- As a result of customers adopting the Xata Turnpike solution, hardware systems and services revenues decreased to $5.6 million in the third quarter of fiscal 2011 compared to $6.3 million in the third quarter of fiscal 2010.
- Cash flow from operations was $2.0 million for the third quarter of fiscal 2011.
"Our growth strategy continues to generate increased software revenue," said Jay Coughlan, chairman and president of Xata. "We look forward to our customers increasing adoption of our next generation onboard XataNet platform.”
“The growth in our higher margin software revenue continues to allow the Company to generate positive non-GAAP earnings and cash flow from operations,” said Scott Christian, chief financial officer of Xata.
Overall gross margins were 46 percent for the third quarter of fiscal 2011, compared to 50 percent for the same period of fiscal 2010. This margin decrease was driven by declining hardware systems and services margins, which were partially offset by continuing improvement in software margins.
Selling, general and administrative costs decreased $0.8 million to $5.8 million compared to $6.6 million for the three months ended June 30, 2011 and 2010, respectively.
Research and development costs were $2.7 million and $1.8 million for the third quarter of fiscal 2011 and 2010, respectively. The continued evolution of the compliance requirements facing the trucking industry warrant additional investment in research and development in order to meet customers’ future needs.
Net loss to common shareholders for the third quarter of fiscal 2011 was $0.5 million, compared to a net income to common shareholders of $0.6 million for the same period in fiscal 2010. As a result, the Company reported a loss of $0.04 per diluted share for the three months ended June 30, 2011, compared to income of $0.02 per diluted share in the same period of the prior year.
For the third quarter of fiscal 2011, the Company reported non-GAAP earnings (earnings before interest, non-recurring acquisition and financing related costs, taxes, depreciation, amortization, stock based compensation and preferred stock dividends and deemed dividends) of $1.3 million compared to $2.2 million for the same period of fiscal 2010.
As of June 30, 2011, the Company held $15.2 million in cash and cash equivalents and had working capital of $16.7 million, excluding the current portion of long-term obligations and deferred revenue and applicable deferred costs.
For the nine months ended June 30, 2011, software revenue increased by 8 percent driven by growth in our XataNet and Xata Turnpike solutions of 11 percent and 74 percent, respectively. Total revenues decreased by 11 percent as the result of lower hardware systems and services revenue as the majority of new customers are utilizing the Xata Turnpike solution which does not require an upfront commitment to purchase hardware components.
