Xplore Technologies Reports Fiscal 2015 Second Quarter

Xplore Technologies Corp. (NASDAQ: XPLR) reported its results for the second quarter of its fiscal year 2015. For the three months ended September 30, 2014, Xplore reported revenue of $7,522,000, compared to $7,403,000 for the three months ended September 30, 2013, an increase of $119,000, or approximately two percent. For the six months ended September 30, 2014, Xplore reported revenue of $15,789,000, compared to $13,259,000 for the six months ended September 30, 2013, an increase of $2,530,000, or approximately 19 percent. Increases in unit sales accounted for increases in revenue of approximately 60% and 62% for the three and six months ended September 30, 2014, respectively, compared to the same periods in the previous year. The increases in unit sales were offset by decreases in average sales prices of approximately 58% and 43% for the three and six months ended September 30, 2014, respectively, due to changes in the product mix sold, primarily arising from sales of the new RangerX Pro and Bobcat systems, which have a lower price point than Xplore’s iX104 systems.

“Our broader product line is gaining appeal as we experienced significant sales for each of our iX104, RangerX Pro and Bobcat rugged tablet families in three different market verticals,” said Philip S. Sassower, chairman and chief executive officer for Xplore. “While our revenue growth for the second quarter is modest, we believe our business has positive momentum based on our recent announcements of our receipt of several significant purchase orders aggregating approximately $14 million. We believe that these orders, which were for each of our rugged tablet families across three different market verticals, are an effective indication that our strategy to expand our product line is working.”

“We had some nice wins during our second quarter with the sale of our Bobcat to a regional retail super store and a follow-on order for our RangerX Pro from a major U.S. telecommunications provider,” said Mark Holleran, president and chief operating officer for Xplore Technologies. “We experienced some minor slowness during our second quarter as some recently announced orders were received later than anticipated. We are very pleased to see the market acceptance of our recently announced new products with these large orders.”

Xplore’s gross profit decreased to $2,267,000 (approximately 30 percent of revenue) for the quarter ended September 30, 2014 from $2,661,000 (approximately 36 percent of revenue) for the quarter ended September 30, 2013. This decrease was primarily due to the change in product mix with increased sales of the RangerX Pro and Bobcat systems. Gross profit increased to $5,331,000 (approximately 34 percent of revenue) for the six months ended September 30, 2014 from $4,902,000 (approximately 37 percent of revenue) for the six months ended September 30, 2013. The increase was attributable to the increase in unit sales, partially offset by a decrease in gross profit margin due to the changes in product mix.

Xplore’s operating expenses for the three months ended September 30, 2014 and 2013 were approximately $3,430,000 and $3,556,000, respectively, representing a decrease of $126,000, or approximately four percent. The decrease was primarily due to decline in product research and development expenses associated with a decline in activities, partially offset by an increase in sales and marketing expenses to generate more awareness of Xplore’s products through expanded initiatives. Operating expenses for the six months ended September 30, 2014 and 2013 were approximately $7,026,000 and $6,825,000, respectively, representing an increase of $201,000, or approximately three percent. The increase was due to the increase in sales in marketing expenses, partially offset by a decrease in product development expenses.

Xplore incurred a loss from operations for the three months ended September 30, 2014 of $1,163,000, compared to a loss of $895,000 for the prior year period. The increase was attributable to a decline in gross profit, partially offset by a decrease in operating expenses. Xplore incurred a loss from operations for the six months ended September 30, 2014 of $1,695,000, compared to a loss from operations of $1,923,000 for the prior year period. The decrease in the loss was attributable to an increase in gross profit, partially offset by a slight increase in operating expenses.

About Xplore Technologies

Xplore Technologies Corp. has been a leading global provider of ultra-rugged and fully-rugged tablets since 1998. Xplore tablets are among the most powerful and longest lasting in their class, withstand nearly any hazardous condition or environmental extreme, and feature competitive pricing and significant ROI. The company's products are sold on a global basis, with channel partners in the United States, Canada, Europe and Asia Pacific. Xplore Technologies’ tablets are deployed across a variety of industries and sectors, such as energy, military operations, manufacturing, distribution, public services, public safety, government, and other areas with hazardous work conditions. For more information, visit the Xplore Technologies website at www.xploretech.com.

Forward-Looking Statements

This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may,” “would,” “could,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect Xplore’s current views with respect to future events and are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the statements made including those factors listed from time to time in filings made by Xplore with securities regulatory authorities under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Xplore does not intend and does not assume any obligation to update these forward-looking statements.