XNR Xanser Corp

Xanser Corporation (NYSE: XNR) today reported results for the third quarter ended September 30, 2005. Revenues for the quarter were $40.4 million, compared with $35.8 million for the third quarter 2004. Xanser's pre-tax income was $1.3 million for the third quarter 2005, compared with $1.0 million for the third quarter 2004. The Company reported third quarter net income of $41,000, compared with $205,000 for the third quarter last year. For the nine month period ended September 30, 2005, Xanser reported revenues of $119.0 million, compared with $103.6 million for the same period last year. The Company reported a net loss of $(4.0) million for the nine month period, compared with net income of $1.2 million for the nine month period in 2004. "Xanser continued to make progress in the third quarter. Our industrial services group, Furmanite, delivered excellent performance for the quarter, with a $5.6 million revenue improvement and close to a million dollar increase in operating income. In Furmanite's business, the second and third quarters are traditionally the stronger, with seasonality affecting the first and fourth quarters, but this year Furmanite's second and third quarter performance has been particularly outstanding," said John R. Barnes, chairman and CEO of Xanser Corporation. "Concerning Xtria, we are continuing our efforts to get that business back on course. Our progress cut the previous quarter's loss of $(2.8) million in half, to $(1.3) million. We intend to continue reducing that loss as we go forward. While we have resolved many issues in Xtria, we have not resolved them all, and we still have a lot of work ahead of us. We believe strongly that Xtria's healthcare and government operations have the capacity - through market potential as well as our people's skills and reputation - to be important contributors to Xanser, and we are confident that we will get Xtria back on track and contributing to the bottom line." BUSINESS SEGMENT REVIEW Technical Services - Furmanite Revenues in the Company's technical services business, Furmanite, increased to $35.4 million for the third quarter 2005, compared with $29.8 million for the third quarter 2004. For the third quarter 2005, Furmanite's operating income increased to $3.5 million, compared with $2.6 million for the third quarter 2004. For the nine month period ended September 30, 2005, Furmanite reported revenues of $100.9 million, compared with $86.5 million for the same period last year. Furmanite reported operating income of $8.0 million for the nine month period, compared with operating income of $5.8 million for the nine month period in 2004. "Furmanite had a strong third quarter with a 19 percent increase at the top line and a 37 percent increase in operating income. Revenue growth was achieved in all our worldwide operations, and that growth translated into substantial gains, particularly in our UK, Norway and Australia operations," said Michael L. Rose, president and chief operating officer of Xanser. 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 $5.0 million for the third quarter, compared with revenues of $6.0 million for the third quarter in 2004. Xtria's operating loss was $(1.3) million for the third quarter 2005, compared with $(590,000) for the third quarter 2004. For the nine month period ended September 30, 2005, Xtria reported revenues of $18.1 million, compared with $17.1 million for the same period last year. Xtria reported an operating loss of $(6.8) million for the nine month period, compared with an operating loss of $(294,000) for the nine month period in 2004. "We have continued to address the issues in Xtria, including the resolution of several contracts signed by prior management that were deleterious to the business," said Mr. Rose. "This is a year of fixing problems, and after we put those behind us, we will be able to get back to a focus on growing Xtria." Xtria is an information technology services provider for the healthcare markets through focused offerings of solutions, services and systems including those for the implementation and management of Picture Archiving Communications Systems (PACS). Xtria's government solutions group provides a full range of services to governmental departments and agencies that include research, data analysis, training, IT grants management and other program support 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. -0- *T XANSER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, --------------------- --------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues: Services $ 39,883 $ 35,385 $ 113,116 $ 101,541 Products 518 379 5,925 2,043 ---------- ---------- ---------- ---------- Total revenues 40,401 35,764 119,041 103,584 ---------- ---------- ---------- ---------- Costs and expenses: Operating costs 37,474 32,634 109,490 94,208 Cost of products sold 526 294 6,369 1,219 Depreciation and amortization 900 842 2,729 2,612 General and administrative 891 733 2,327 2,277 Other (769) - (769) - ---------- ---------- ---------- ---------- Total costs and expenses 39,022 34,503 120,146 100,316 ---------- ---------- ---------- ---------- Operating income (loss) 1,379 1,261 (1,105) 3,268 Interest and other income, net 213 32 487 97 Interest expense (256) (266) (792) (743) ---------- ---------- ---------- ---------- Income (loss) before income taxes 1,336 1,027 (1,410) 2,622 Income tax expense (1,295) (822) (2,557) (1,438) ---------- ---------- ---------- ---------- Net income (loss) $ 41 $ 205 $ (3,967) $ 1,184 ========== ========== ========== ========== Earnings (loss) per common share - Basic and Diluted $ - $ 0.01 $ (0.12) $ 0.04 ========== ========== ========== ========== XANSER CORPORATION SUPPLEMENTAL INFORMATION (In thousands) (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, --------------------- --------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues: Technical services $ 35,403 $ 29,781 $ 100,911 $ 86,521 Information technology services 4,998 5,983 18,130 17,063 ---------- ---------- ---------- ---------- $ 40,401 $ 35,764 $ 119,041 $ 103,584 ========== ========== ========== ========== Operating income (loss): Technical services $ 3,542 $ 2,584 $ 7,986 $ 5,839 Information technology services (1,272) (590) (6,764) (294) General and administrative expenses (891) (733) (2,327) (2,277) ---------- ---------- ---------- ---------- $ 1,379 $ 1,261 $ (1,105) $ 3,268 ========== ========== ========== ========== *T