Xplore Technologies Reports 191% Increase in Revenue for Q1’15

AUSTIN, Texas — (BUSINESS WIRE) — August 13, 2015 — Xplore Technologies Corp. (NASDAQ: XPLR), reported results for the first quarter of its fiscal year 2016. For the three months ended June 30, 2015, Xplore reported revenue of approximately $24,043,000, compared to approximately $8,267,000 for the three months ended June 30, 2014, an increase of $15,776,000, or approximately 191 percent. This increase in revenue was due to a 31 percent increase in revenue associated with Xplore’s historical product line. The remaining increase resulted from revenue associated with products acquired in the April 17, 2015 acquisition of Motion Computing, Inc. assets (the “Motion Acquisition”).

“This quarter represents a seismic shift in Xplore’s growth,” said Philip S. Sassower, chairman and chief executive officer for Xplore. “With the acquisition of the Motion product line, our team was able to deliver growth that could have taken years to achieve organically. We could not be more excited with both the record revenue attained and with our bottom line performance, which, but for certain one-time costs related to the Motion Acquisition, would have generated net income.”

“We are very pleased with the favorable results for the quarter,” said Mark Holleran, president and chief operating officer for Xplore. “Certain of our actions resulted in a better than expected first quarter including the Motion assets. Our integration efforts remain on track and we are very happy with our ability to drive improvement and to begin to leverage synergies from our expanded product line. We have received positive feedback from both distributors and end customers alike and are seeing solid demand for our products in the marketplace.”

Xplore reported gross profit of $8,150,000 for the quarter ended June 30, 2015, increased from $3,064,000 for the quarter ended June 30, 2014. The increase in gross profit was attributable to the abovementioned increase in revenue. Gross profit percentage was 34% for the quarter ended June 30, 2015, as compared to 37% for the quarter ended June 30, 2014. The decrease in gross profit percentage was primarily due to changes in product mix.

Xplore’s operating expenses for the quarters ended June 30, 2015 and 2014 were approximately $7,781,000 and $3,596,000, respectively, representing an increase of $4,185,000, or approximately 116 percent. The increase was predominately attributable to higher overhead needed to support Xplore’s expanded product lines.

Xplore had income from operations for the quarter ended June 30, 2015 of $369,000, compared to an operating loss of $532,000 for the prior year period. Xplore incurred a net loss for the quarter ended June 30, 2015 of $244,000, compared to net loss of $551,000 for the prior year period. The current period includes expenses of $670,000 related to nonrecurring costs incurred in the Motion Acquisition.

Conference Call

The company will conduct a conference call and webcast to review the results today at 4:30 p.m. ET. Interested parties in the United States can access the call by dialing 877-269-7756; interested parties outside the United States can access the call by dialing 201-689-7817; anyone can listen via a live Internet webcast at http://www.investorcalendar.com/IC/CEPage.asp?ID=174184. A replay of the conference call will be available until September 14, 2015, by calling 877-660-6853 from the United States or 201-612-7415 from outside the United States and entering conference ID number 13614404.

About Xplore Technologies

Established in 1996, Xplore Technologies Corp. is the number two provider of rugged tablet PCs worldwide. With its recent acquisition of the Motion Computing product portfolio, the company now delivers the broadest range of rugged Windows and Android tablets available on the market. The company’s award-winning tablet PCs are among the most powerful and longest lasting in their class – able to withstand nearly any hazardous condition or environmental extreme – and are purpose-built for the unique workflow demands of critical industries including oil & gas, utilities, telecommunications, government, military, public safety, manufacturing, distribution and healthcare. Xplore's products are sold and serviced on a global basis across the Americas, Europe, Middle East, Africa, and Asia Pacific regions. For more information, visit the Xplore Technologies websites at www.xploretech.com and www.motioncomputing.com.

Forward Looking Statements

This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect Xplore’s current views with respect to future events and are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the statements made including those factors listed from time to time in filings made by Xplore with securities regulatory authorities under the heading “Risk Factors”. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Xplore does not intend and does not assume any obligation to update these forward-looking statements.

Consolidated Balance Sheets
(in thousands)
      June 30,
    March 31,
ASSETS     (unaudited)      
CURRENT ASSETS:            
Cash and cash equivalents     $ 11,017       $ 19,455  
Accounts receivable, net       18,252         6,633  
Inventory, net       15,609         7,883  
Prepaid expenses and other current assets       275         315  
Total current assets       45,153         34,286  
Fixed assets, net       1,705         1,030  
Intangible assets, net       2,049          
Goodwill       16,690          
      $ 65,597       $ 35,316  
Short-term indebtedness with bank     $ 3,810       $  
Deferred revenue and warranty liabilities       4,797         414  
Accounts payable and accrued liabilities       22,219         4,594  
Total current liabilities       30,826         5,008  
Deferred revenue and non-current warranty liabilities       5,592         1,517  
Total liabilities       36,418         6,525  
Commitments and contingencies                
Preferred Stock, par value $0.001 per share; authorized 5,000; no shares issued                
Common Stock, par value $0.001 per share; authorized 15,000; shares issued 10,790 and 10,784, respectively       11         11  
Additional paid-in capital       169,012         168,379  
Accumulated deficit       (139,844 )       (139,599 )
        29,179         28,791  
      $ 65,597       $ 35,316  
Consolidated Statements of Loss—Unaudited
(in thousands of dollars, except share and per share amounts)
      Three Months Ended
      June 30,
    June 30,
Revenue     $ 24,043       $ 8,267  
Cost of revenue       15,893         5,203  
Gross profit       8,150         3,064  
Sales, marketing and support       3,620         1,598  
Product research, development and engineering       1,830         991  
General administration       2,331         1,007  
        7,781         3,596  
Income (loss) from operations       369         (532 )
Other income (expense):            
Other       63         (19 )
Cost of integration       (670 )        
Interest expense       (6 )        
        (613 )       (19 )
Net loss     $ (244 )     $ (551 )
Loss per common share     $ (0.02 )     $ (0.07 )
Weighted average number of common shares outstanding, basic and fully diluted       10,789,967         8,432,347  
Consolidated Statements of Cash Flows—Unaudited
(in thousands)
      Three Months Ended
June 30,
        2015         2014  
Cash (used in) provided by operations:            
Net loss     $ (244 )     $ (551 )
Items not affecting cash:            
Depreciation and amortization       358         172  
Provision for doubtful accounts       (84 )        
Stock-based compensation expense       607         159  
Equity issued in exchange for services               3  
Changes in operating assets and liabilities:            
Accounts receivable       (4,151 )       1,577  
Inventory       (1,932 )       (4,085 )
Prepaid expenses and other current assets       11         188  
Accounts payable and accrued liabilities       1,788         (160 )
Net cash used in operating activities       (3,647 )       (2,697 )
Net cash received in purchase transaction       653          
Additions to fixed assets       (237 )       (71 )
Net cash provided by (used in) investing activities       416         (71 )
Proceeds from short-term borrowings       5,000          
Repayment of short-term indebtedness       (10,233 )        
Net proceeds from issuance of Common Stock       26         10  
Net cash provided by (used in) financing activities       (5,207 )       10  
CHANGE IN CASH AND CASH EQUIVALENTS       (8,438 )       (2,758  
CASH AND CASH EQUIVALENTS, END OF PERIOD     $ 11,017       $ 2,642  



Net assets acquired with debt in purchase transaction     $ 9,079       $  


Payments for interest     $ 6       $  
Payments for income taxes     $       $ 9  


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