For immediate release For more information, contact:
Investor Relations
(972) 699-4055
Email: investor@xanser.com
XANSER CORPORATION ANNOUNCES 2003 RESULTS
Highlights
|X| Company reports loss before non-cash cumulative effect of change in
accounting principle related to goodwill pursuant to FAS 142 of $(13.1)
million (which includes a $(12.1) million non-cash accounting adjustment in
the fourth quarter related to deferred taxes pursuant to FAS 109), compared
to $(2.2) million loss for 2002
|X| Company has shed all Xtria's non-profitable operations and recruited new
leader to drive growth in its strength of franchise in healthcare,
financial and insurance, and government businesses
|X| Furmanite, delivers outstanding performance for 2003, increasing revenues
by 11% and operating income by 77%
DALLAS, TEXAS (February 26, 2004) - Xanser Corporation (NYSE: XNR) today
reported results for the year ended December 31, 2003. Revenues for the year
were $135.7 million, compared with $131.4 million in 2002. The Company's
reported net loss was $(13.1) million for the year, compared with a net loss of
$(47.5) million for the prior year. The Company's loss before the non-cash
cumulative effect of change in accounting principle related to goodwill pursuant
to FAS 142 was $(13.1) million (which includes a $(12.1) million non-cash
accounting adjustment in the fourth quarter related to deferred taxes pursuant
to FAS 109) for 2003. This compares with $(2.2) million for 2002.
"Xanser is now well positioned for a profitable 2004," said John R. Barnes,
chairman, president and CEO of Xanser Corporation. "Our technical services
business, Furmanite, delivered outstanding performance in 2003, with a good top
line increase and a substantial increase to the bottom line. Furmanite is on
track for an equally strong 2004. In Xtria, our information technology services
business, we exited all non-performing operations in the fourth quarter --
operations that had taken a great deal of time, energy and resources and that
were causing our losses. Early in 2004, we brought in a new leader for Xtria,
Ian Littlewood, whose experience and expertise lies in the areas of Xtria's
concentration -- healthcare, financial and insurance, and government. We know
that each of these areas has significant opportunities for growth."
"We have a strong balance sheet with over $40 million in working capital,
including $21 million in cash, over $50 million in equity and only $20 million
in long-term debt. Our plan is to build Xanser into a company of significant
size and meaningful profits. You will see us move well ahead on that goal in the
coming year," Mr. Barnes concluded.
BUSINESS SEGMENT REVIEW
Technical Services - Furmanite
Revenues in the Company's technical services business, Furmanite, were up 11% to
$101.0 million for 2003, compared with $90.7 million in 2002. Furmanite's
operating income increased 77% to $6.3 million for 2003, compared with $3.6
million in the prior year.
"Furmanite's performance this year demonstrates the positive effect of a
coherent business model that was designed and implemented to expand our market,
our service offerings and our value to customers, while improving our margins
and operating income," said Jeff Chick, president of Furmanite Worldwide. "Our
strategy is working, and our delivery of top line growth and significant bottom
line improvement this year is solid evidence. We expect 2004 to be equally
strong."
The Company's focus in Furmanite's core operations is to maximize margins while
growing market share. At the same time, Furmanite is exploring new services,
based on new technologies, that can benefit its core customers and new market
segments. Furmanite's business is the protection and management of its
customers' critical assets, and the Company's technical and technological
capabilities help to assure that customers' critical assets are on line and
performing for maximum profit.
Furmanite is one of the world's largest specialty technical services companies.
For 65 years, Furmanite has achieved the most recognized and respected brand in
technical services worldwide. Today, with more than 40 offices on five
continents, Furmanite is a global provider of technology-based and technical
solutions to international industries. Furmanite's customers encompass every
element in the energy and power supply chain - from offshore and land-based
drilling operations, to pipelines, refineries and power generation facilities.
Its customers also include steel mills, automotive manufacturers, pulp and paper
mills, food and beverage processing plants, semi-conductor manufacturers and
pharmaceutical manufacturers. Across this diverse, global customer base,
Furmanite delivers a broad portfolio of engineering solutions that keep
facilities operating, minimizing downtime and maximizing profitability.
Furmanite, known as The Solutions Group, holds more than 200 international
patents and trademarks for its customized products and services, and is a
recognized market leader in technical services.
Information Technology Services - Xtria
Revenues in the Company's information technology services business, Xtria, were
$34.7 million for the year ended December 31, 2003, compared with $40.7 million
in 2002. Xtria's operating loss was $(6.5) million for 2003, which is
attributable to the non-performing operations that were closed in the fourth
quarter, compared with $(3.8) million in the prior year.
"Xtria's operations in healthcare, financial and insurance, and government are
robust and well capable of significant growth," said Ian Littlewood, president
of Xtria. "We enjoy tremendous strength of franchise in each of these segments
- -- long-term customers, unrivaled expertise and a superb industry reputation for
adding real value through our services and solutions. Having exited the
non-performing operations in the fourth quarter, Xtria is well-positioned to
take advantage of the opportunities for growth in each of our market segments,
and our performance and results will show that in 2004."
The Company's focus in Xtria is to lead the technology services sector for the
healthcare, financial/insurance and government markets, delivering solutions
that leverage technology to solve industry-specific business problems.
Xtria is a provider of information technology solutions and services. Xtria
serves organizations in the healthcare, finance and insurance industries, and
agencies of the U.S. government. Xtria's solutions improve information access
and point-of-service performance in complex regulatory environments. Solutions
are built on Xtria's deep experience in vertical business segments, application
integration and high-end infrastructure design.
ABOUT XANSER CORPORATION
Xanser Corporation (NYSE: XNR) provides technology-based and technical services
worldwide. Xanser's operations deliver business knowledge and solutions to
customers. Headquartered in Dallas, Texas, Xanser Corporation's operations
consist of an information technology services company and an international
technical services firm. Xtria is a provider of information technology solutions
and services. Xtria serves organizations in the healthcare, finance and
insurance industries, and agencies of the U.S. government. Xtria's solutions
improve information access and point-of-service performance in complex
regulatory environments. Solutions are built on Xtria's deep experience in
vertical business segments, application integration and high-end infrastructure
design. Furmanite, one of the world's largest specialty technical services
companies, delivers a broad portfolio of engineering solutions that keep
facilities operating, minimizing downtime and maximizing profitability.
Furmanite's diverse, global customer base includes offshore and land-based
drilling operations, pipelines, refineries and power generation facilities,
steel mills, automotive manufacturers, pulp and paper mills, food and beverage
processing plants, semi-conductor manufacturers and pharmaceutical
manufacturers. Furmanite operates more than 40 offices on five continents. For
more information, visit www.xanser.com.
Certain of the Company's statements in this press release are not purely
historical, and as such are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These include statements
regarding management's intentions, plans, beliefs, expectations or projections
of the future. Forward-looking statements involve risks and uncertainties,
including without limitation, the various risks inherent in the Company's
business, and other risks and uncertainties detailed from time to time in the
Company's periodic reports filed with the Securities and Exchange Commission.
One or more of these factors have affected, and could in the future affect, the
Company's business and financial results in future periods, and could cause
actual results to differ materially from plans and projections. There can be no
assurance that the forward-looking statements made in this document will prove
to be accurate, and issuance of such forward-looking statements should not be
regarded as a representation by the Company, or any other person, that the
objectives and plans of the Company will be achieved. All forward-looking
statements made in this press release are based on information presently
available to management, and the Company assumes no obligation to update any
forward-looking statements.
XANSER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Year
Ended December 31, Ended December 31,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues:
Services $ 31,266 $ 31,411 $ 120,790 $ 114,659
Products 1,255 7,560 14,930 16,777
--------- --------- --------- ---------
Total revenues 32,521 38,971 135,720 131,436
--------- --------- --------- ---------
Costs and expenses:
Operating costs 32,501 30,438 116,503 112,159
Cost of products sold 1,114 6,846 13,538 15,828
Depreciation and amortization 2,742 958 5,860 3,665
General and administrative 684 1,141 3,186 3,991
--------- --------- --------- ---------
Total costs and expenses 37,041 39,383 139,087 135,643
--------- --------- --------- ---------
Operating income (loss) (4,520) (412) (3,367) (4,207)
Interest and other income, net 72 108 260 460
Interest expense (260) (411) (1,273) (1,764)
--------- --------- --------- ---------
Income (loss) before income taxes and cumulative effect of
change in accounting principle (4,708) (715) (4,380) (5,511)
Income tax benefit (expense) (9,327) 391 (8,725) 3,269
--------- --------- --------- ---------
Income (loss) before cumulative effect of change in
accounting principle (14,035) (324) (13,105) (2,242)
Cumulative effect of change in accounting principle - adoption of
new accounting standard for goodwill, net of income taxes -- -- -- (45,269)
--------- --------- --------- ---------
Net income (loss) $ (14,035) $ (324) $ (13,105) $ (47,511)
========= ========= ========= =========
Earnings (loss) per common share - Basic and diluted:
Before cumulative effect of change in accounting principle $ (0.44) $ (0.01) $ (0.41) $ (0.07)
Cumulative effect of change in accounting principle -- -- -- (1.38)
--------- --------- --------- ---------
$ (0.44) $ (0.01) $ (0.41) $ (1.45)
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XANSER CORPORATION
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
Three Months Year
Ended December 31, Ended December 31,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues:
Technical services $ 27,136 $ 25,531 $ 101,018 $ 90,747
Information technology services 5,385 13,440 34,702 40,689
--------- --------- --------- ---------
$ 32,521 $ 38,971 $ 135,720 $ 131,436
========= ========= ========= =========
Operating income (loss):
Technical services $ 1,204 $ 1,331 $ 6,337 $ 3,580
Information technology services (5,040) (602) (6,518) (3,796)
General and administrative expenses (684) (1,141) (3,186) (3,991)
--------- --------- --------- ---------
$ (4,520) $ (412) $ (3,367) $ (4,207)
========= ========= ========= =========