XTX.TO reported revenues of $62 mill down from $72 mill in the 4th quarter. Significant revenue growth YOY but stock may sell off in the short term. Conference call tomorrow should provide more details.
Xantrex Technology Inc. Reports 2008 First Quarter
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VANCOUVER, B.C., April 29, 2008 – Xantrex Technology Inc. (TSX:XTX) reported financial results for the first quarter ended March 31, 2008. Revenue rose 55 percent to $62.0 million from $39.9 million for the year-ago quarter as a result of revenue growth in all three market segments, Renewable, Programmable, and Mobile power.
Net income was $541,000, or $0.02 per diluted share, compared with a loss of $108,000, or $0.00 per diluted share, a year ago. Adjusted net income was $2.4 million, or $0.08 per diluted share, compared with $527,000, or $0.02 per diluted share. Adjusted EBITDA was $5.8 million, compared with $1.5 million a year ago. (Please see table below for a reconciliation of the non-GAAP measures to net income.)
The improvement in net income reflected strong revenue growth and higher gross margin, partially offset by higher non-cash amortization expense for intellectual property, and higher net interest expense resulting from the acquisition of Elgar Electronics Corporation which closed March 12, 2007.
Gross margin increased to 33.2 percent from 30.9 percent a year ago. The improvement reflected higher margins on Renewable Power products introduced over the last year, a full quarter of Programmable Power revenue compared with the three weeks included for the year-ago quarter, and our ability to recover raw materials cost increases with higher selling prices. These improvements were partially offset by a charge for consolidation of manufacturing facilities. Excluding the consolidation charge, gross margin would have been 34.4 percent.
Mr. John Wallace, CEO of Xantrex, commented, “Strong revenue growth, higher gross margin, and effective expense control contributed to improved profitability. The highlight of the quarter was the strong revenue growth in Renewable Power, up 58 percent from a year ago. Renewable Power growth was driven by solar inverter sales especially in Europe. Programmable Power revenue rose 100 percent, attributable to last year's acquisition. Mobile Power benefited primarily from strength in products for commercial markets, work vehicles and trucks.”
Mr. Wallace continued, "As targeted in our 2008 outlook, operating expenses have been contained in line with the fourth quarter of 2007. The other expense category compared unfavorably with a year ago primarily because of net interest expense associated with debt incurred for the Elgar acquisition. In the 2008 quarter, the foreign exchange gain reported of $874,000 was offset by the foreign exchange impact on operating income of $832,000, primarily from operating expenses denominated in the higher Canadian dollar.”
Mr. Wallace concluded, "No change in our stated target for 2008 to grow our overall revenues and to more than double our adjusted EPS and EBITDA compared with 2007. Strength in our renewable business appears sufficient to overcome effects of a slowing U.S. economy on our programmable and mobile businesses."
Mr. Mossadiq S. Umedaly, Xantrex's Chairman, said, "We met revenue expectations and exceeded EPS expectations as a result of strong revenue growth and improved profitability despite a charge for the nearly completed facilities consolidation. I am pleased that for a second quarter in a row the company has shown improving financial results and met expectations.”
