HDX Announces 2008 Annual Results

TORONTO, Mar 30, 2009 (Canada NewsWire via COMTEX) -- HDX | Quote | Chart | News | PowerRating -- Hosted Data Transaction Solutions Inc. ("HDX") announced today its financial results for the fiscal year and three-month period ending December 31, 2008. HDX is listed on the TSX under the symbol HDX.

During the year ended December 31, 2008, HDX grew its company operations significantly and revenue increased to $8,010,106. This represents an increase of $5,360,841 from revenue of $2,649,265 for the previous year.

As the company expanded HDX was able to maintain a gross margin of $4,832,764 (60.3%) for the year representing an increase of $3,131,470 from a gross margin of $1,701,294 for the year ended December 31, 2007;

Cash flow from operations was positive at $4,669 versus a negative value of $1,124,209 in 2007.

During 2008 HDX completed the acquisition of Biz-Pro Ltd. (Biz-Pro) on Jan 17th and Sabrepoint Inc. (Sabrepoint) on Feb 19th. The Company consequently recognized revenue and earnings from Biz Pro and Sabrepoint during the period.

Throughout the year management focused on identifying new customer opportunities, completing the acquisitions and integrating the acquired entities, reducing operating expenses, and deploying common infrastructure to allow efficient and effective operations among HDX's four office locations. Sales and marketing teams, technical teams, accounting and administrative teams were combined and cross-trained.

The combined technical team has broadened the Company's geographical footprint and allowed HDX to offer industry leading service response which will lay the groundwork for further sales success.

The combined sales and marketing team is able to offer a complete suite of products to merchants coast to coast allowing HDX to incrementally increase the value proposition of each customer opportunity.

HDX continued significant software development and software deployment projects in 2008. These enhanced system capabilities lay the groundwork for further system sales and wider solution deployment in coming years.

In 2008 management continued to focus on reducing expenses and annual operating cost reductions of over $700,000 were accomplished at the Toronto office through wage reductions, elimination of redundant technology costs, and successfully sub-letting the Richmond Street office location.

The economic downturn in 2008 had a significant negative impact on HDX sales and service revenues in the tourism, hospitality, fine dining, and table service sectors. HDX's revenue in these sectors was 32.2% lower than projected.

Due to the economic downturn, uncertain credit markets, reduced HDX share value, and resulting Company market capitalization value, the company has incurred write-downs in goodwill and intangible assets of $5,488,537 resulting in a net loss and comprehensive loss of $7,506,192 for the year ended December 31, 2008.

As at December 31, 2007, the Company had cash, cash equivalents and short term investments of $1,377,144. In 2008 cash extracted from the company treasury was used strictly for acquisitions and investments and was not required for company operations. The number of shares outstanding as at December 31, 2008 was 27,887,693.

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    Annual Highlights and Summary

    -   Revenue was $8,010,106 for the year ended December 31, 2008, up
        202.4% from $2,649,265 for the year ended December 31, 2007;

    -   Gross margin was $4,832,764 for the year ended December 31, 2008, up
        184.1% from $1,701,294 for the year ended December 31, 2007;

    -   Due to write-downs in goodwill and intangible assets of $5,488,537
        the company incurred a net loss and comprehensive loss of $7,506,192
        for the year ended December 31, 2008, which is an increase of 737.0%
        from the net loss of $896,764 for the year ended December 31, 2007;
        and

    -   HDX's cash, cash equivalents and short term investments totaled
        $1,377,144 as at December 31, 2008 compared to $3,881,922 as at
        December 31, 2007.
    >>

About the Company

Hosted Data Transaction Solutions Inc. (HDX) is in the business of managing merchant transactions with consumers and facilitating payment. HDX develops and deploys touch screen POS system software and associated enterprise management tools and has developed and deployed numerous POS applications. HDX also provides system hardware integration services, merchant staff training, system installation services, and post sale software and hardware support services.

HDX leading edge technology also includes prepaid stored value payments solutions, customer self serve kiosks and "line buster" mobile point of sale terminals. These products have been designed to dramatically enhance customer throughput and drastically reduce customer queues. These technologies are especially effective in high foot traffic environments that have limited cash register counter space, limited retail square footage, and the absence of a drive through.

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 HDX'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 30st 2009 with the regulatory authorities. HDX 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.

SOURCE: Hosted Data Transaction Solutions Inc.

Paul Howell President and CEO, Hosted Data Transaction Solutions Inc. (HDX), 350 Bay
Street, Suite 700, Toronto, Ontario, M5H 2S6, Phone: (416) 703-6462, extension 2263,
Email: Paul.Howell@hdxsolutions.com

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