Exhibit 99.1
For immediate release For more information, contact:
Investor Relations
(972) 699-4055
Email: investor@xanser.com
XANSER CORPORATION ANNOUNCES SECOND QUARTER RESULTS
Company Appoints Michael L. Rose President and Chief Operating Officer
and Max Elghandour Controller
DALLAS, TEXAS (August 15, 2005) - Xanser Corporation (NYSE: XNR) today reported
results for the second quarter ended June 30, 2005. Revenues for the quarter
were $43.5 million, compared with $35.2 in the first quarter 2005 and $35.7
million for the second quarter 2004. Xanser's pre-tax loss was $(596,000) for
the second quarter, compared with a pre-tax loss of $(2.2) million in the first
quarter 2005 and pre-tax income of $1.4 million in the second quarter 2004. The
Company reported a net loss of $(1.7) million, compared with a net loss of
$(2.3) million in the first quarter 2005 and net income of $869,000 for the
second quarter last year.
For the six month period ended June 30, 2005, Xanser reported revenues of $78.6
million, compared with $67.8 million for the same period last year. The Company
reported a net loss of $(4.0) million for the six month period, compared with
net income of $979,000 for the six month period in 2004.
"Overall, Xanser made progress in the second quarter. On a pre-tax basis, we
reduced our loss by 72 percent compared with the first quarter this year. Taxes
increased in the second quarter to $1.1 million, up from $155,000 in the first
quarter this year. About half of that number was deferred taxes and the
remainder was due to substantial increases in profits in our operations in
foreign countries," said John R. Barnes, chairman and CEO of Xanser Corporation.
"Heavier seasonal work combined with strong gains in revenues and operating
income resulted in an excellent second quarter in our industrial services group,
Furmanite. We continue our intensive efforts to resolve the issues in Xtria. We
still have a lot of work to do, but we have made significant progress toward
getting Xtria back on course."
Mr. Barnes continued, "Xanser's capacity to grow and perform is predicated on
our fundamental financial strength and the strength and excellence of our
people. I am very pleased to announce the addition of two outstanding people to
the Xanser management team. Michael L. Rose will serve as Xanser's president and
chief operating officer. Mike is without question the finest COO I have ever
worked with, and his strong and effective operational leadership will make
significant contributions to Xanser's growth. I am also very pleased to announce
that Max Elghandour has joined us as Xanser's controller. Max is an excellent
senior financial executive, with a great track record for performance. We are
very fortunate to have these two seasoned senior executives join our management
team, as we work toward our goal of building Xanser into a company of real
substance."
Michael L. Rose has more than 30 years of senior executive experience, with
demonstrated ability in general management, planning, marketing and finance,
negotiations and acquisitions. Max Elghandour is a CPA with a strong career in
senior financial management for complex public companies. Both Mr. Rose and Mr.
Elghandour have extensive expertise in multi-national businesses. Mr. Rose is
the former chief operating officer and Mr. Elghandour is the former controller
of the general partner of Kaneb Pipe Line Partners, L.P.
BUSINESS SEGMENT REVIEW
Technical Services - Furmanite
Revenues in the Company's technical services business, Furmanite, increased to
$34.9 million for the second quarter 2005, compared with $30.7 million for the
first quarter 2005 and $29.8 million for the second quarter 2004. For the second
quarter 2005, Furmanite's operating income increased to $2.9 million, compared
with $1.5 million for the first quarter 2005 and $2.1 million for the second
quarter 2004.
For the six month period ended June 30, 2005, Furmanite reported revenues of
$65.5 million, compared with $56.7 million for the same period last year.
Furmanite reported operating income of $4.4 million for the six month period,
compared with operating income of $3.3 million for the six month period in 2004.
"This was another strong quarter for Furmanite," Mr. Barnes said. "We saw
substantial growth in our business, with significant gains in the U.S., the
U.K., the Netherlands and Norway, as well as very strong increases in Hong Kong,
Singapore and Australia."
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. 2004 marked 75 years of Furmanite serving industry worldwide. Today,
Furmanite is recognized as `the' worldwide expert in the field of on-site and
on-line plant and pipeline maintenance. Furmanite's single mission and business
goal is to maximize asset uptime for customers. Specifically, everything
Furmanite does directly relates to keeping an asset on-line, productive and
profitable; be it a pipeline, a plant, or personnel. Furmanite ensures asset
productivity and profitability for a variety of industries -- chemical and
petrochemical, oil and gas, power generation, pulp and paper, pharmaceutical,
and national defense. This commitment to excellence, coupled with Furmanite's
broad array of services and proprietary technology, is a critical component to
the operation and financial success of some of the world's largest process
manufacturers and energy producers and suppliers including Shell, ExxonMobil,
Sun Oil, Dominion, Exelon, Cinergy, Entergy and Reliant. Furmanite has more than
40 offices on five continents. Its website is www.furmanite.com
Information Technology Services - Xtria
Revenues in the Company's information technology services business, Xtria, were
$8.6 million for the second quarter, of which $4.0 million was IT services and
$4.6 million was equipment sales. This compares with revenues of $4.5 million
for the first quarter 2005 and $5.9 million for the second quarter in 2004.
Xtria's operating loss was $(2.8) million for the second quarter 2005, compared
with $(2.7) million for the first quarter 2005 and operating income of $294,000
for the second quarter 2004.
For the six month period ended June 30, 2005, Xtria reported revenues of $13.1
million, compared with $11.1 million for the same period last year. Xtria
reported an operating loss of $(5.5) million for the six month period, compared
with operating income of $296,000 for the six month period in 2004.
"As we discussed in the first quarter of this year, Xtria was taken off course
by prior management, and we have taken a number of important steps to get the
business back on track," Mr. Barnes said. "First, going forward we have
instituted changes to Xtria's equipment sales and installation contracts that
will both improve our margins and allow for recovery of costs associated with
changes required by the customer. Second, the nature of the business in
financial and insurance has changed. We determined that this business was no
longer key to our future, so we have divested ourselves of those operations.
Finally, we have substantially reduced the overall infrastructure and cost
structure of Xtria. These steps addressed specific issues in the business, which
caused a significant portion of the $(2.8) million loss for the quarter."
Xtria is an information technology services provider for the healthcare and
government markets through focused offerings of solutions, services and systems.
In the healthcare market, Xtria provides managed service solutions for the
implementation and management of Picture Archiving Communications Systems
(PACS). For agencies of the federal, state and local government, Xtria provides
information technology services. With established intellectual capital and
product knowledge, Xtria's market-focused operations have many years of
experience and a track record of success in the healthcare and government
markets. Its website is www.xtria.com.
ABOUT XANSER CORPORATION
Xanser Corporation (NYSE: XNR) provides technology-based and technical services
worldwide. Headquartered in Dallas, Texas, Xanser's operations consist of an
information technology services company, Xtria, and an international technical
services firm, Furmanite. Xtria provides a portfolio of innovative technology
solutions to the healthcare and government markets. Combining its deep market
expertise with specialized technology, Xtria partners with its clients to set
the standard for managing mission critical processes in information-intensive
environments. Xtria has a legacy of enabling organizations to power their
businesses, while mitigating the risks associated with change. 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 drilling operations, pipelines, refineries and power
generation facilities, chemical and petrochemical plants, 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 INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------- --------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
Services $ 38,842 $ 34,315 $ 73,233 $ 66,156
Products 4,627 1,341 5,407 1,664
-------- -------- -------- --------
Total revenues 43,469 35,656 78,640 67,820
-------- -------- -------- --------
Costs and expenses:
Operating costs 37,221 31,612 72,015 61,574
Cost of products sold 5,271 744 5,843 925
Depreciation and amortization 851 891 1,829 1,770
General and administrative 646 792 1,437 1,544
-------- -------- -------- --------
Total costs and expenses 43,989 34,039 81,124 65,813
-------- -------- -------- --------
Operating income (loss) (520) 1,617 (2,484) 2,007
Interest and other income, net 178 31 274 65
Interest expense (254) (238) (536) (477)
-------- -------- -------- --------
Income (loss) before income taxes (596) 1,410 (2,746) 1,595
Income tax expense (1,107) (541) (1,262) (616)
-------- -------- -------- --------
Net income (loss) $ (1,703) $ 869 $ (4,008) $ 979
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Earnings (loss) per common share - Basic and Diluted $ (0.05) $ 0.03 $ (0.12) $ 0.03
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XANSER CORPORATION
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------------- --------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
Technical services $ 34,849 $ 29,758 $ 65,508 $ 56,740
Information technology services 8,620 5,898 13,132 11,080
-------- -------- -------- --------
$ 43,469 $ 35,656 $ 78,640 $ 67,820
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Operating income (loss):
Technical services $ 2,913 $ 2,115 $ 4,444 $ 3,255
Information technology services (2,788) 294 (5,492) 296
General and administrative expenses (645) (792) (1,436) (1,544)
-------- -------- -------- --------
$ (520) $ 1,617 $ (2,484) $ 2,007
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