XETA Reports 3Q Loss

Due to a continued decline in systems sales to commercial customers during the quarter, XETA Technologies reports a loss of $8.6 million, or 84 cents per diluted share, on revenue of $17.2 million for the third fiscal quarter ended July 31.
This compares to earnings of $591,000, or 6 cents per diluted share, on revenue of $23.2 million for the third fiscal quarter ended July 31, 2008.
XETA said uncertainty related to a pending change of ownership of a significant vendor — Nortel — and the sustained level of market capitalization below book value, contributed to the loss. XETA conducted impairment tests for goodwill and other long-lived assets, specifically its ERP system, in connection with the preparation of its third quarter financial report.
As a result, the company recorded non-cash impairment charges of $11 million and $3 million to goodwill and fixed assets, respectively.
The impairment charge to goodwill represents the company’s best estimate at the time of reporting third quarter results, and may be adjusted after completing the impairment test during the fourth fiscal quarter.



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