Xplore Technologies has announced the results for its fiscal 2017 fourth quarter and full year, which ended on 31 March 2017.
Fiscal Fourth Quarter and Recent Highlights:
- Reported revenue of $16.9m, reflecting previously disclosed supply chain constraints which delayed delivery of multiple customer orders into the first fiscal quarter
- Ended the quarter with backlog of $7.4m
- Responded to supply chain constraints through a number of actions, including extending order forecasts, lengthening purchase agreements and increasing inventory orders of key products in order to resume normalised shipments for the June quarter
- Achieved gross margin of 28.1% for the quarter
- Reported continued reduction in operating expenses to $5.2m, a reduction of 27.5% and the lowest quarterly expense in fiscal 2017 or fiscal 2016
- Reported GAAP net loss of $488,000, or $0.04 per share, and adjusted EBITDA of $30,000
- Generated $4.9m in cash flows from operating activities, bringing total cash flow to $10.6m in the second half of fiscal 2017
- Announced multiple large follow-on orders, including additional workers and divisions at a large telecommunications customer
- Entered the vehicle emissions market with the leading software and services provider, including Xplore’s first state-wide customer win
- Expanded Xplore’s global customer service organisation to enhance worldwide customer support
- Secured a new $15m line of credit from Bank of America, including expanded support for inventory financing, with no debt on the balance sheet on 31 March
- Appointed Mark Holleran as Chief Executive Officer.
Fiscal Year 2017 Highlights:
- Reported revenue of $77.9m, and gross margin of 28.2%
- Reduced operating expenses 20.7% year-over-year through aggressive focus on operating efficiency, significantly reducing breakeven for the company
- Reported a net loss of $2.6m, and adjusted EBITDA of negative $168,000
- Launched the category leading XSLATE R12 designed to meet the needs of Xplore’s targeted end user markets, including logistics, manufacturing, public safety and others
- Announced multiple large customer wins, including the company’s largest ever purchase order for Android rugged tablets with a top US telecommunications customer and a number of expansion orders with another large US telecommunications customer
- Strengthened the board with the appointment of two new independent directors.
Xplore CEO Mark Holleran said: "Fiscal 2017 was a transformative year for Xplore, characterised by fully integrating and refining the acquired Motion product lines, working through industry-wide disruptions that affected our first and fourth fiscal quarters, rebuilding of our sales team and a 21% reduction in full-year operating expenses.
"We enter fiscal 2018 as a leaner, more cost-efficient business focused on expanding sales, producing profitable quarters and generating positive free cash flow.
"As anticipated, the previously announced supply chain disruptions impacting the fourth quarter created tighter market supplies and a lengthening of lead times on several key components, such as digitizers and SSDs, leading to deferral of multiple orders into the first quarter of 2018.
"While all of the affected components remain available and shipping, we have taken a number of actions to mitigate these disruptions, including lengthening our order forecasts, increasing component purchase commitments, adjusting our inventory practices and working closely with our ODMs to manage supplier relationships, including second sourcing options where appropriate.
"We are once again fulfilling customer orders largely on schedule. We remain focused on expanding sales in key markets, such as Europe, as well as working closely with a number of customer refresh opportunities that will occur in Fiscal 2018, and additional initiatives."
Fiscal 2017 Fourth Quarter Financial Results
Xplore reported revenue of $16.9m for the fiscal fourth quarter ended 31 March 2017, compared to revenue of $24.5m in the fiscal third quarter of 2017 and compared to $20.6m in the year-ago fourth quarter.
The change in revenue reflected typical seasonality combined with the previously disclosed short-term supply chain constraints that limited shipments during the March 2017 quarter.
Gross profit in the fourth quarter was $4.8m, or 28.1% of revenue, compared to $6.7m, or 27.4% of revenue, in the preceding quarter and $6.2m, or 30.3% of revenue, in the prior year fourth quarter. The change in gross margin was primarily attributable to product mix.
Operating expenses continued to decline to the lowest level of fiscal 2017, at $5.2m for the fiscal fourth quarter, down 16.3% sequentially from $6.3m in the preceding quarter and down 27.5% from $7.2m in the prior year fourth quarter.
The company believes the reduction in operating expenses reflects the company’s focus on operating efficiency to drive profitability as revenue grows.
A portion of the cost reduction benefit is being reinvested in sales, marketing and channel and distributor development to drive revenue growth into fiscal 2018 and beyond.
For the quarter, Xplore reported net loss of $488,000, or $0.04 per basic share, compared to net income of $219,000, or $0.02 per basic share, in the third quarter of fiscal 2017 and a net loss of $1m, or $0.09 per share, in the prior year fourth quarter.
The change in net loss reflects lower revenue, offset by the significantly reduced operating expenses.
EBITDA adjusted for non-cash compensation and historical integration costs was $30,000, compared to positive adjusted EBITDA of $822,000 in the fiscal third quarter 2017, and a negative $112,000 in the prior year fourth quarter.
Xplore CFO Tom Wilkinson said: "While topline was challenged by industry headwinds in fiscal 2017, we maintained our focus on operating efficiency and low operating expenses, which have significantly lowered our break-even point and improved our ability to generate free cash flow from operations."
"Looking ahead, we anticipate multiple profitable quarters in Fiscal 2018 on improving revenue, as well as solid free cash flow to fund operations and investment in planned platform refreshes."
Please contact Xplore via the enquiries form for more information.