Posera-HDX Announces Financial Results for the Third Quarter 2010

TORONTO, Nov. 15 /CNW/ - Posera-HDX Inc. ("HDX") (the Company) announced today its financial results for the three-month period ending September 30th, 2010. HDX is listed on the TSX under the symbol "HDX".

Paul Howell, Chief Executive Officer, reports:

The acquisition of Posera Inc. ("Posera") was completed on May 5th 2010 and the Company operated as a combined entity for the entire 3rd quarter of 2010 and officially changed its name to Posera-HDX Inc.

Sales and service revenues for the three-month period ending September 30, 2010 were $4,288,316. This represents an increase of 85.5% from $2,311,340 for the quarter ending September 30, 2009. Q3 is the second slowest quarter for the Company as slower sales during the summer months are an annual trend in the point of sale solution industry.

Excluding one-time expenditures of $156,307 related to recent acquisitions, the finalization of the share and warrant issuance, the completion of two office build-outs and moving expenses, the Company achieved EBITDA profit for the three-months ended September 30, 2010 of $76,935, compared to a loss of $40,708 for the three-months ended September 30, 2009.

The company's broader product offering, wider geographical footprint, focused integration efforts, and complimentary business activities have resulted in new revenue opportunities. During the quarter, management reviewed company-wide costs in order to streamline operations and maximize efficiency. Restructuring efforts have resulted in combined annualized expense reductions of over $600,000.

In Q3 the Company performed government certified deployments of its Fingerprints quick service restaurant software and Maitre 'D table service software at restaurants in the province of Quebec. The Company's solutions are approved and fully integrated with the provincial government mandated SRM sales collection module. There are approximately 18,000 restaurants in Quebec that must register and deploy SRM over the next 24 months.

Exemplifying intercompany synergies that have increased the Company's earning potential per site, the 3rd quarter saw the integration between the Posera Maitre 'D table service software solution and HDX's digital video recording solution. This has eliminated the need for a 3rd party DVR solution for Maitre 'D table service installations and provides Posera- HDX with a new product that can be marketed to customers and resellers.

The company continues to pursue acquisitions within the point of sale and payments industries although none are specifically named at this time.

Highlights and Summary for the Quarter

• During the second quarter of 2010, HDX acquired A&A Point of Sale Solutions Inc. ("A&A") in April, 2010, Posera Inc. ("Posera") in May, 2010 and Century Cash Register Inc. ("Century") in June, 2010;
  
• Revenue for the combined entity for the three-month period ending September 30, 2010 includes three full months for each of A&A, Posera, and Century whom were acquired in the second quarter of 2010. Total revenue was $4,288,316, up 85.5% from $2,311,340 for the quarter ending September 30, 2009. Revenue for HDX not including the above-mentioned acquisitions was $2,209,715 for the three-months ended September 30, 2010, down 4.4% from $2,311,340 for the three-months ended September 30, 2009;
• Gross margin was $3,101,388 for the three-months ended September 30, 2010, up 127.5% from $1,363,235 for the three-months ended September 30, 2009. Gross margin for HDX not including the above-mentioned acquisitions was $1,322,297 for the three-months ended September 30, 2010, down 3.0% from $1,363,235 for the three-months ended September 30, 2009;
• Gross margin as a percentage of revenue was 72.3% for the three-months ended September 30, 2010, up 13.4% from 58.9% for the three-months ended September 30, 2009. Gross margin as percentage of revenue for HDX not including the above-mentioned acquisitions was 59.8% for the three-months ended September 30, 2010, up 0.9% from 58.9% for the three-months ended September 30, 2009;
• Operating expenses were $3,180,760 for the three-months ended September 30, 2010, up 126.6% from $1,403,943 for the three-months ended September 30, 2009. Operating expenses for HDX not including the above-mentioned acquisitions was $1,491,891 for the three-months ended September 30, 2010, up 6.3% from $1,403,943 for the three-months ended September 30, 2009;
• Included in the operating expenses for the three-months ended September 30, 2010 were certain one-time expenditures of $156,307 relating to the acquisitions of A&A, Posera and Century, the completion of two office moves, as well as the finalization of the share and warrant issuance;
• Eliminating these one-time expenditures, the operating expense for HDX, not including the above mentioned acquisitions for the three-months ended September 30, 2010 would have been $1,335,584 or a decrease of 4.9%, compared to operating expenses of $1,403,943 for the three-months ended September 30, 2009;
• EBITDA (earnings before interest, taxes, depreciation, and amortization) loss for the three-months ended September 30, 2010, was $79,372 compared to $40,708 for the three-months ended September 30, 2009. EBITDA loss for HDX not including the above-mentioned acquisitions was $169,595 for the three-months ended September 30, 2010, compared to $40,708 for the three-months ended September 30, 2009;
• Eliminating the one-time expenditures discussed previously relating to operating expenses, the EBITDA profit for the three-months ended September 30, 2010 was $76,935, compared to a loss of -$40,708 for the three-months ended September 30, 2009. EBITDA loss for HDX not including the above-mentioned acquisitions and the related expenditures was -$13,288 for the three-months ended September 30, 2010 compared to -$40,708 for the three-months ended September 30, 2009;
• Deferred revenue, which represents annual recurring revenues that have not yet been recognized as revenue, was $1,539,626 as at September 30, 2010 up 26.9% from $1,213,698 as at December 31, 2009. Deferred revenue for HDX not including the above-mentioned acquisitions was $1,252,298 as at September 30, 2010, up 3.2% from $1,213,698 as at December 31, 2009;
• HDX's cash, cash equivalents and short term investments totaled $1,068,072 as at September 30, 2010, compared to $1,105,685 as at December 31, 2009, while bank indebtedness was $131,278 as at September 30, 2010, compared to $nil as at December 31, 2009;
• Net loss, which includes non-cash expenses such as amortization and stock-based compensation charges of $291,130, was $343,146 for the three-months ended September 30, 2010, compared to a net loss of $131,656 for the three-months ended September 30, 2009.

Additional information on HDX third quarter 2010 financial results will be available in the financial reports filed by the Company with Sedar at www.sedar.com and posted to the Investor Relations section of the Company's website at www.dexit.com.

About the Company

Posera-HDX is in the business of managing merchant transactions with consumers and facilitating payment. The company develops and deploys touch screen POS system software and associated enterprise management tools and has developed and deployed numerous POS applications. Posera-HDX also provides system hardware integration services, merchant staff training, system installation services, and post sale software and hardware support services.

Posera-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.

Posera-HDX Inc. develops, deploys, and supports a restaurant point-of-sale software know as "Maitre'D" which has been deployed in over 20,000 locations worldwide in eight different languages. The Company sells and services its clients directly, as well as through a network of approximately 140 value added reseller partners in 25 countries with approximately 1,100 representatives selling, supporting & installing its software. Posera-HDX employs approximately 150 people in offices in Toronto, London, Brantford, Mississauga, Seattle, Montreal, Glasgow (U.K.) and Paris (France).

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 to be filed on March 31st 2010 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.

For further information:

Paul Howell
Chief Executive Officer
Posera-HDX Inc. (HDX)
350 Bay Street, Suite 700
Toronto, Ontario M5H 2S6
[phone] ext. 2263