Xenonics Announces Second Quarter Results

CARLSBAD, Calif.--(BUSINESS WIRE)--XENONICS HOLDINGS, INC. (NYSE AMEX:XNN) today announced a net loss for the second quarter ended March 31, 2010 of $951,000, or $0.04 per share, on revenue of $109,000. This compares to a net loss for the second quarter of fiscal 2009 of $261,000, or $0.01 per share, on revenue of $2,802,000.

“Our second quarter results are by no means indicative of the performance we expect going forward”

"Our second quarter results are by no means indicative of the performance we expect going forward," said Chairman Alan Magerman. "Monthly shipments of our NightHunter One high-intensity illumination devices to be included in non-lethal force protection kits for the U.S. Marine Corps under a $2.9 million purchase order from Aardvark Tactical will begin this month, and are scheduled to continue through the end of 2010. This is one of the reasons we expect the company to generate net profit from operations beginning in May. We also expect to participate in new non-lethal programs initiated by Aardvark, and to win a position for our products in other large, funded procurement programs for the U.S. military and several foreign governments that are expected to be awarded over the next few months. With the proceeds of our recent financing, we are building SuperVision and NightHunter inventory to meet demand for our products, and we are optimistic about our chances of winning significant new contracts," said Chairman Alan Magerman.

During April 2010 the Company completed the sale of common stock for gross proceeds of $2,000,000.

"Underscoring our commitment to strict control over operating costs, SG&A decreased by nearly 50%, to $696,000 for this year's second quarter from $1,371,000 for the same period last year. But at the same time, recognizing that new product development is crucial to our long-term success, R&D increased to $257,000 from $154,000 last year, a forceful signal of our confidence in Xenonics' future," Magerman said.

For the six months ended March 31, 2010, Xenonics reported a net loss of $1,356,000, or $0.06 per share, on revenue of $1,365,000. For the first six months of fiscal 2009, the net loss was $1,557,000, or $0.08 per share, on revenue of $3,156,000.

Conference Call

Xenonics has scheduled a conference call at 11:00 a.m. EDT this morning to discuss its results for the second quarter of fiscal 2010. The dial in number is [phone] and the passcode is #43277075. A simultaneous webcast of the conference call can be accessed from the Webcast Center of the Investor Relations link at www.xenonics.com. A replay will be available after 1:00 p.m. EDT at this same Internet address. For a telephone replay, dial [phone], passcode #26351685, after 2:00 p.m. EDT.

About Xenonics

Xenonics Holdings, Inc. (AMEX:XNN) develops and produces advanced, lightweight and compact ultra-high-intensity illumination and low-light vision products for military, law enforcement, public safety, and commercial and private sector applications. Xenonics' NightHunter line of illumination products is used by every branch of the U.S. Armed Forces as well as law enforcement and security agencies. Its SuperVision high-definition night vision is designed for commercial and military applications. Employing patented technologies, Xenonics provides innovative solutions for customers who must see farther so they can do their jobs better and safer. Xenonics' products represent the next generation in small, high intensity, high efficiency illumination and low-light vision systems. Visit Xenonics on the web at www.xenonics.com.

Forward-Looking Statements

Except for the historical statements, statements in this release may constitute forward-looking statements within the meaning of section 21E of the Securities Exchange Act of 1934. When used, the words "anticipates," "believes," "expects," "intends," "future," and other similar expressions identify forward-looking statements. These forward-looking statements reflect management's current views with respect to future events and financial performance and are subject to risks and uncertainties, and actual results may differ materially from the outcomes contained in any forward-looking statement. Factors that could cause these forward-looking statements to differ from actual results include delays in development, marketing or sales of new products, and other risks and uncertainties discussed in the company's periodic reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission. Xenonics Holdings undertakes no obligation to update or revise any forward-looking statements.

XENONICS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three months ended						Six months ended
		March 31,						March 31,
		2010			2009			2010			2009
Rounded in thousands, except per share amounts		(unaudited)						(unaudited)
Revenues		$	109,000		$	2,802,000		$	1,365,000		$	3,156,000
Cost of goods sold			69,000			1,582,000			740,000			1,776,000
Gross profit			40,000			1,220,000			625,000			1,380,000
Selling, general and administrative			696,000			1,371,000			1,490,000			2,580,000
Research and development			257,000			154,000			453,000			343,000
Loss from operations			(913,000	)		(305,000	)		(1,318,000	)		(1,543,000	)
Other income/(expense):
	Gain (loss) on derivative revaluation		--			44,000			38,000			(19,000	)
	Other income		--			4,000			--			4,000
	Interest income		--			1,000			2,000			10,000
	Interest (expense)		(38,000	)		(5,000	)		(76,000	)		(7,000	)
Loss before provision for income taxes			(951,000	)		(261,000	)		(1,354,000	)		(1,555,000	)
Income tax provision			--			--			2,000			2,000
Net loss		$	(951,000	)	$	(261,000	)	$	(1,356,000	)	$	(1,557,000	)
Net loss per share:
	Basic and fully-diluted	$	(0.04	)	$	(0.01	)	$	(0.06	)	$	(0.08	)
Weighted average shares outstanding:
	Basic and fully-diluted		21,189,000			20,246,000			20,998,000			20,405,000

XENONICS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
		March 31,			September 30,
		2010			2009
Rounded in thousands, except par value		(unaudited)
Assets
Current Assets:
	Cash	$	57,000		$	126,000
	Accounts receivable, net		245,000			1,634,000
	Inventories		2,315,000			2,069,000
	Other current assets		184,000			119,000
	Total Current Assets		2,801,000			3,948,000
	Equipment, furniture and fixtures at cost, net		103,000			130,000
	Goodwill		375,000			375,000
	Other assets		122,000			--
	Total Assets	$	3,401,000		$	4,453,000
Liabilities and Shareholders' Equity
Current Liabilities:
	Accounts payable	$	864,000		$	1,000,000
	Accrued expenses		102,000			157,000
	Accrued payroll and related taxes		145,000			156,000
	Accrued derivative liability		--			199,000
	Total Current Liabilities		1,111,000			1,512,000
Notes payable			334,000			292,000
Total Liabilities			1,445,000			1,804,000
Commitments and contingencies
Shareholders' Equity:
	Preferred shares, $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding		--			--
	Common shares, $0.001 par value, 50,000,000 shares
	authorized; 21,322,000 shares issued and 21,209,000
	shares outstanding at March 31, 2010; 20,571,000 shares
	issued and 20,459,000 outstanding at September 30, 2009		21,000			20,000
	Additional paid-in capital		25,140,000			24,478,000
	Accumulated deficit		(22,899,000	)		(21,543,000	)
			2,262,000			2,955,000
	Less treasury stock, at cost, 113,000 shares		(306,000	)		(306,000	)
	Total Shareholders' Equity		1,956,000			2,649,000
	Total Liabilities and Shareholders' Equity	$	3,401,000		$	4,453,000