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Company News:
Xantrex Technology Inc. Reports Second Quarter 2006 Results
VANCOUVER, BC, July 25, 2006 — Xantrex Technology Inc. (TSX: XTX) reported financial results for the second quarter and six months ended June 30, 2006. All currency amounts are reported in US dollars unless otherwise indicated, and financial results are reported in accordance with accounting principles generally accepted in Canada. For the second quarter of 2006, revenue rose 18 percent to $40.5 million from $34.3 million for the year-ago quarter. Net income was $2.3 million, or $0.08 per diluted share, compared with a loss of $515,000, or ($0.02) per diluted share a year ago. Cash flow from operations was $3.5 million compared with $558,000 a year ago. For the first six months of 2006, revenues were $75.2 million compared with $67.7 million for the year-ago period, an increase of 11 percent. Net income was $3.0 million, or $0.10 per diluted share, compared with $966,000, or $0.03 per diluted share. Cash flow from operations was $12.2 million compared with negative $2.2 million a year ago. Mr. Mossadiq S. Umedaly, Chairman of Xantrex, commented, "The second quarter further confirmed that our focus on renewable energy and our operational initiatives are achieving tangible progress and that we have set the right direction. Gross margin for the quarter was 30.4 percent, better than a year-ago and first quarter 2006 despite inflationary pressure in a number of our commodity-based raw materials. Operating expenses were contained even with the impact of the stronger Canadian dollar. The increase in net income reflected the improved execution of our strategic plan and accompanying operating leverage. In addition, operating cash flow for the second consecutive quarter well exceeded last years results." John Wallace, Xantrex's CEO stated, "The two highlights of the quarter were the excellent growth in renewable power, and the evidence that our efficiency and productivity enhancements have benefited our financial performance. We intend to continue to work on improving results in these areas throughout the remainder of this year Mr. Wallace continued, "Renewable power revenues this quarter rose 72 percent from a year ago, an exceptional advance due to improved performance in our solar and wind markets and in part because last year’s comparative wind revenues were very low. In addition, we launched six new product models within our single phase GT series solar grid tie inverter line for key North American OEM and Korean customers. Portable products were down nine percent this quarter, attributable to slower development of sales channels and new product launches as we transition towards more complex products for consumer electronics with longer development cycles. While the transition will constrain growth in portable products this year, the potential for innovative and differentiated products to be offered through new channels in the 2007 timeframe and beyond is exciting." Mr. Wallace continued, "Mobile Power product revenue was off 12 percent for the quarter from a year ago. Within Mobile, the market growth in commercial vehicle product revenue was more than offset by industry weakness in recreational markets which include recreational vehicles and marine craft. Last quarter, early signs that these market niches may have begun to stabilize turned out to be premature. In the meantime, Mobile power products continue to generate good cash flow and gross margin for Xantrex.” Lastly, Mr. Wallace stated, “Programmable products were again a bright spot with revenue this quarter up 24 percent reflecting still healthy trends in capital spending by electronics manufacturers.” Looking forward, Mr. Umedaly concluded, "Interest in renewable energy will continue to remain high due to energy prices, energy security concerns, and environmental issues resulting in government incentives to use renewable energy. France and Greece recently announced incentives to encourage the use of solar energy, further increasing potential demand for our products. During the second quarter, Xantrex began shipping solar products to Korea which last year enacted renewable energy incentives. In conclusion, we believe we are on track to realize our outlook of improved growth and profitability for 2006.”
The complete second quarter of 2006 Management’s Discussion and Analysis and Financial Statements for Xantrex Technology Inc. are available on the Xantrex web site www.xantrex.com. Cautionary Note on Forward-looking Information Conference Call About Xantrex For further information, please contact Donna Clark | ||
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