HDX Announces EBITDA Positive Financial Results for the 3rd Quarter of 2008

TORONTO, Nov. 13, 2008 (Canada NewsWire via COMTEX) -- HDX | Quote | Chart | News | PowerRating -- Hosted Data Transaction Solutions Inc. ("HDX") announced today its financial results for the three-month period ending Sept 30th, 2008. HDX (formerly Dexit Inc.) is listed on the TSX under the symbol HDX.

Paul Howell, President and CEO reports:

HDX revenue continued to increase in the 3rd quarter of 2008. This was the second full quarter of combined operations for HDX's newly acquired businesses. Our financial results are indicative of our company's continued growth in a difficult economic climate that has seen consumer spending reductions in travel, tourism, and fine dining. The HDX team has installed POS, DVR, and payment solutions at over 300 locations in 2008, continued research and development activity for self serve and web-enabled business intelligence products, and developed payments integration interfaces for major customers. The growth potential of HDX is positive and the Company has adequate cash and cash equivalents to grow and operate efficiently.

3rd quarter revenue increased to $2,242,607 representing an increase of $1,628,898 over revenue of $613,709 for the three months ended Sept 30, 2007. Revenue increased $232,717 from 2nd quarter 2008 revenue of $2,009,890. HDX has posted an EBITDA profit of $7,976 for the 3rd quarter 2008 compared to an EBITDA loss of $400,099 for the three months ended Sept 30th, 2007.

Income including all cash operating expenses was $53,439 for Q3-2008 up $8,548 from $44,891 for Q2-2008. This does not include non-cash expenses realized for stock options granted and the depreciation of intangible assets and property, plant and equipment.

The company has accrued deferred revenue of $828,760 representing recurring contract revenue that was not realized as revenue in the quarter.

Management continues to focus on finding efficiencies and at the time of this press release, annualized cost reductions of over $550,000 have been achieved since January 1st 2008.

The company realized a non-cash expense of $185,733 for the quarter related to the depreciation of intangible assets acquired and $19,737 related to depreciation of PP&E (property, plant, and equipment). The total PP&E depreciation for Q3-2007 was $93,816.

The company also realized a non-cash expense of $46,180 for the quarter for stock-based compensation for stock options granted to the Board of Directors. This compensation is for services rendered during 2007 and the 1st, 2nd and 3rd quarters of 2008. Stock-based compensation expense realized in Q3-2007 was $2,333.

With the inclusion of the above noted non-cash expenses, the company posted a Net Loss of $198,211 for the quarter.

During the three months ended September 30, 2008 HDX completed an investment of $300,000 to acquire Common Shares in ECOM Financial Corp. (ECOM) Headquartered in Stuart, Florida with wholly owned Canadian subsidiary, EcomCard Canada Inc., ECOM is a developer and marketer of prepaid gift, payroll, travel, rebate, and incentive cards under the MasterCard(R) brand. HDX management previously identified a need to offer clients a ubiquitous, open loop, stored value payment solution that could be utilized world-wide without requiring a change to store technology. Through the investment in ECOM, HDX has secured the technological platform to fulfill this requirement.

On October 8, 2008, the Company entered into a five year agreement with ECOM Financial Corp. ("eCOM") and its subsidiary EcomCard Canada Inc. to market, sell and distribute prepaid eCOM Gift MasterCard and reloadable eCOM Prepaid MasterCard cards. The eCOM Gift Card MasterCard(R) and reloadable eCOM Prepaid MasterCard(R) cards can be customized for individual merchant brands offering merchants an excellent quality prepayment product that can be deployed easily and quickly.

HDX installs, services, and supports thousands of merchant point of sale solutions internationally and the eCOM prepaid MasterCard Gift Cards will allow our multi-site and international merchants to deploy stored value cards throughout their chain quickly and easily. Merchants and consumers around the world are familiar and comfortable with the MasterCard brand. This ubiquitous payment product complements and completes the HDX stored value payment suite which currently includes Dexit(R) contactless RFID, UPC barcode and traditional magnetic stripe gift and loyalty card products.

<< Quarterly Highlights and Summary - Revenue was $2,242,607 for the three months ended Sept 30, 2008, compared to $613,709 for the three months ended Sept 30, 2007; - Deferred revenue, which represents annual recurring revenues that have not yet been recognized as revenue, was $828,760 compared to $421,837 for the three months ended Sept 30, 2007; - Gross margin was $1,325,626 for the three months ended Sept 30, 2008, compared to $252,809 for the three months ended Sept 30, 2007; - EBITDA profit (Earnings before interest taxes depreciation and amortization) for the three months ended Sept 30, 2008, was $7,976 compared to a an EBITDA loss of $400,099 for the three months ended Sept 30, 2007; This includes expenses of $46,180 related to options expensed during the quarter. The Options Policy was approved at the June 2007 AGM and the options were granted on May 20th 2008 as payment for Directors fees for 2007 and Q1 and Q2 2008. - HDX's cash, cash equivalents and short term investments totaled $1,128,453 as at Sept 30, 2008; and - Net income (loss) which includes amortization charges of $205,470 for acquired assets was $198,211 compared to a net loss of $475,284 for the three months ended Sept 30, 2007. In other company news, HDX announces that Mr. Edwin Nordholm has resigned from the Board of Directors. We thank Mr. Nordholm for his valuable contribution over the past two years. On behalf of our Chairman, John McBride, the Board of Directors, and the dedicated team of professionals at HDX, I thank our shareholders for your continued support of our growing company. Sincerely, Paul Howell President and CEO Hosted Data Transaction Solutions Inc. (HDX) 416-703-6462, extension 263 Forward-Looking Statements >>

This discussion includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with our business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect Hosted Data Transaction Solution's (formerly Dexit's) current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Annual Information Form filed on March 31, 2008 with the regulatory authorities. Hosted Data Transaction Solutions Inc. (formerly Dexit) assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

<< (R) Registered trade-mark of Hosted Data Transaction Solutions Inc. (formerly Dexit Inc.) >>

SOURCE: Hosted Data Transaction Solutions Inc.

Paul Howell, President and CEO, HDX (Hosted Data Transaction Solutions Inc.), Tel: (416) 703-6462 ext 263, Email: paul.howell@hdxsolutions.com; Juergen Weber, President, COO, ECOM Financial Corp., Tel: (416) 989-6627, Email: jweber@ecomcards.com

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index