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| XNN > SEC Filings for XNN > Form 10QSB on 13-Aug-2008 | All Recent SEC Filings |
13-Aug-2008
Quarterly Report
Engineering, Research & Development: Engineering, research and development
expenses were $289,000 for the quarter ended June 30, 2008 compared to $175,000
for the quarter ended June 30, 2007. The increase is attributed to spending for
the development of new products, including our new NightHunter 3 ultra high
intensity illumination system.
Net Income (Loss): Significantly higher sales and lower selling, general and
administrative expenses in the current quarter accounted for the lower net loss
of $783,000 when compared to a net loss of $1,952,000 for the prior year
quarter.
Nine months ended June 30, 2008 compared to the nine months ended June 30, 2007
Revenues: Revenues for the nine months ended June 30, 2008 were $9,074,000
compared to revenues of $3,585,000 for the nine months ended June 30, 2007. In
the nine months ended June 30, 2008, 87% of revenue was from sales of our
NightHunter products to the military (U.S. Army, U.S. Marines and military
distributors). This compares to 80% of revenue to the military market in the
same nine month period of the prior year.
Cost of Goods and Gross Profit: Cost of goods consist of the cost of
manufacturing our NightHunter One and SuperVision products and the price that we
pay to PerkinElmer for NightHunter II products that PerkinElmer manufactures for
us under a manufacturing agreement.
The gross profit percentage was 45% and 66% for the nine months ended
June 30, 2008 and 2007, respectively. The gross profit percentage was positively
impacted during the nine months ended June 30, 2007 by sales of the NightHunter
II product from inventory that was identified as excess inventory in fiscal year
2005. The reduction in the 2007 nine month period of the excess inventory
reserve related to the sale of NightHunter II product was $1,158,000. As of
June 30, 2007 all of the excess inventory of the NightHunter II products had
been shipped to customers.
Selling, General and Administrative: Selling, general and administrative
expenses decreased by $748,000 to $3,735,000 for the nine months ended June 30,
2008 as compared to $4,483,000 for the nine months ended June 30, 2007. The
decrease is primarily attributed to lower non-cash compensation expenses for
stock options and warrants of $792,000 and legal expenses of $319,000 offset by
increases in trade show, advertising, marketing and travel expenses of $269,000
and consulting and commission expenses of $93,000.
Engineering, Research & Development: Engineering, research and development
expenses were $630,000 for the nine months ended June 30, 2008 compared to
$486,000 for the nine months ended June 30, 2007. The increase is attributed to
spending for the development of new products, including our new NightHunter 3
ultra high intensity illumination system.
Net Income (Loss): Significantly higher sales and lower selling, general and
administrative expenses in the current nine month period accounted for the lower
net loss of $249,000 when compared to a net loss of $2,534,000 for the prior
year nine month period.
Liquidity and Capital Resources
As of June 30, 2008, the Company had working capital of $4,615,000 and a
current ratio of 8.0 to 1 as compared to working capital of $4,527,000 and a
current ratio of 4.9 to 1 as of September 30, 2007.
Higher sales for the nine months ended June 30, 2008 positively impacted
cash. These sales also increased accounts receivable by $931,000 and decreased
inventories by $866,000. The majority of the receivables were collected after
June 30, 2008. Non-cash compensation expense for options to employees and
issuance of warrants to consultants during the first nine months of the current
fiscal year were $227,000. Cash used by operating activities totaled $598,000
for the nine months ended June 30, 2008. Cash flows from investing activities
during the current nine month period were $1,000,000 as the result of purchases
of marketable securities and from financing activities were $70,000 as the
result of exercises of warrants.
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