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Here's the earnings report in case anyone didn't catch it.
XXsys Third Fiscal Quarter Results
SAN DIEGO, Aug. 18 /PRNewswire/ -- XXsys Technologies, Inc. (Nasdaq: XSYS - news) today announced financial results for the fiscal quarter ended June 30, 1998. The Company's revenues of $376,483 increased by 190% compared with the third quarter of 1997. The revenue gain was accounted for by a six-fold increase in commercial contracts partially offset by a $55,608 decrease in revenues from government research grants. Commercial contracts represented 95% of revenues in the third quarter 1998 compared to 44% of revenues in the third quarter 1997. Government contracts represented 5% of revenues in fiscal 1998 compared to 56% in 1997.
The net loss of $832,981 for the third quarter 1998 represents a decrease of $523,181, or 39%, compared with the third quarter 1997. Operating expenses were lower by $276,346, or 18%, compared with the third quarter of fiscal 1997 principally due to cost reduction measures. On a per share basis, the quarterly loss in 1998 of $0.07 represents a decrease of $0.10 compared with a loss of $0.17 in the prior year's quarter.
For the first nine months of 1998, revenues of $802,005 represent an increase of $408,701, or approximately double the revenues for the same period last year. Revenues from commercial contracts in the first nine months of 1998 were almost six times the commercial revenues for the comparable period in 1997. The net loss for the first nine months of fiscal 1998 of $1,963,003 represents a decrease of $1,131,202, or 37% below the prior year's level. The decline in losses is due primarily to significantly higher revenues, reduced operating expenses and an increase in other income. Other income of $374,995 and $231,575 in 1998 and 1997 respectively represent consulting fees under an agreement signed with a third party in October 1995. The consulting fee portion of the agreement has been completed. The loss in 1998 on a per share basis for the first nine months is $0.19 compared to $0.41 in the comparable period in 1997.
Consolidated Statement Third Quarter First Nine Months
Of Operations: Ended June 30, Ended June 30,
1998 1997 1998 1997
Commercial revenues $359,098 $56,999 $775,353 $132,621
Government research
grants 17,385 72,993 26,652 260,683
Total revenues $376,483 $129,992 $802,005 $393,304
Operating expenses 1,221,075 1,497,421 3,177,641 3,749,545
Operating loss (844,592) (1,367,429) (2,375,636) (3,356,241)
Interest income 13,411 13,231 44,187 38,844
Other income 0 0 374,995 231,575
Interest expense (1,800) (1,964) (6,549) (8,383)
Net loss $(832,981) $(1,356,162) $(1,963,003) $(3,094,205)
Net loss per share $(0.07) $(0.17) $(0.19) $(0.41)
Weighted average
number of shares
outstanding 11,210,107 7,887,369 10,078,987 7,520,568
The Company has continued to incur losses in fiscal 1998 primarily because of the high level of expenses of research and business development and the small demonstration projects associated with early stages of commercialization. The Company expects to continue to incur expenses for similar demonstrations throughout 1998.
Working capital (current assets minus current liabilities) at June 30, 1998 was $157,709, compared with $556,385 at September 30, 1997. Working capital for both periods includes $551,000 in restricted certificates of deposit, which are necessary for material payment and performance bonds on the Arroyo Seco bridge retrofit project. The Company will not have access to these funds until work has been determined to be satisfactorily completed and accepted by both the prime contractor and the California Department of Transportation (Caltrans). The restrictions of the bond combined with continued costs being incurred on the project without receiving any reimbursement for work completed to date have contributed to the decline in working capital. The Company can give no assurances as to when a review will be held between Caltrans and the Company on resolution of work issues on the project, whether the work performed to date will be accepted, or when or how much it will be paid on the project or when the bond will be released, all of which could continue to have a negative impact on the Company's financial condition.
This Form 10-QSB contains forms of forward-looking statements that are based on the Company's beliefs as well as assumptions made by and information currently available to the Company. Such statements are subject to certain risks, uncertainties and assumptions, which are identified and described in the Company's registration statements and periodic reports on file with the SEC, including the Company's 1997 Annual Report on Form 10-KSB and subsequent Quarterly Reports on Form 10-QSB. In particular, the Company has continued to rely on the sale of Common Stock to fund its operating losses, but there is the risk that the Company may not be able to obtain all the capital it needs in a timely manner from existing private placement commitments of investors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results will vary from those anticipated, estimated, or projected and the variation may be material.
SOURCE: XXsys Technologies, Inc.
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