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Xenonics Reports Fiscal 2007 First Quarter Results

Xenonics Holdings, Inc. Press Release

FlashlightNews.org - 2/15/2007

NightHunter maker reports higher profit and reduced loss compared to a year ago

Xenonics' NightHunter<sup>ext</sup>

Xenonics' NightHunterext

CARLSBAD, Ca. - XENONICS HOLDINGS, INC. (AMEX:XNN), a leader in advanced illumination and low light viewing technologies, today announced financial results for the first quarter of fiscal 2007 ended December 31, 2006.

"We generated cash and significantly improved our working capital position in the first quarter, despite the impact of the previously announced delay in a $1 million order for our NightHunterII high-intensity illumination devices that shipped in early January instead of in December as we had originally anticipated. Our recent private equity placement further increased our working capital, which currently exceeds $5 million, providing the resources we need to aggressively pursue our growth opportunities.

"Based on the increasing momentum we now are seeing in our NightHunter business, as well as the market's enthusiastic response to the launch of our new SuperVision™ night vision device, we expect to return to the path of revenue and profit growth beginning in the current quarter. We remain committed to our goal to build Xenonics into a significant growth company," said Chairman Alan Magerman.

"SuperVision™ is now in production and initial commercial shipments are expected to begin later this quarter. We recently announced the award of U.S. patents on our SuperVision technology, and international patents are pending. We have also established an innovative marketing program for SuperVison with the National Rifle Association that launches this spring, and announced a $1.7 million order from our first Authorized Dealer in the shooting sports market. We are rapidly developing additional potentially significant distribution channels, and we are increasingly confident that SuperVision will become a important driver of Xenonics' growth.

"Our persistent efforts over the past several years to establish our patented NightHunter family of illumination products as standard equipment in the military armamentarium now is beginning to pay dividends. Last month we announced follow-on NightHunter orders from the Defense Logistics Agency and the U.S. Army 1st Cavalry Division valued at $1.5 million, and we anticipate additional NightHunter orders from the DLA and other government agencies in the months to come. As previously announced, we have authorized production of 1,200 NightHunterII's for delivery between January 2007 and March 31, 2007 to meet our second quarter forecast," Magerman added.

First Quarter Results

For the three months ended December 31, 2006, revenue was $916,000 compared to $920,000 for the first quarter of fiscal 2006.

Gross profit for the first quarter of fiscal 2007 was of $714,000, which included $358,000 related to the sale of excess inventory of the NightHunter II product during the period. For the first quarter of fiscal 2006, gross profit was $376,000, which primarily related to sale of the NightHunter product.

Selling, general and administrative expenses for the three months ended December 31, 2006 decreased to $974,000, which included $280,000 of non-cash stock-based compensation expense and other non-cash adjustments related to warrants and stock. This compares to selling, general and administrative expenses for the first quarter of fiscal 2006 of $1,145,000, which included $513,000 of employee stock-based compensation expense and other non-cash adjustments related to warrants and stock.

The net loss for the three months ended December 31, 2006 was $406,000 or $0.02 per share. This compares to a net loss for the three months ended December 31, 2005 of $926,000, or $0.06 per share. Net cash provided by operations was $966,000 for this year's first quarter. This compares to net cash used by operations of $242,000 for the first quarter of fiscal 2006.

At December 31, 2006, Xenonics reported working capital of $3,020,000, and a current ratio of 6.2. This compares to working capital of $2,329,000 and a current ratio of 4.5 at September 30, 2006. Xenonics has no debt.

Conference Call

A simultaneous webcast of the conference call can be accessed from the Investor Relations link at www.xenonics.com or from www.earnings.com/company.asp?client=cb&ticker=xnn. A replay will be available after 1:00 p.m. EST at these same Internet addresses. For a telephone replay, dial (800) 633 8284, reservation #21328741, after 1:00 p.m. EST.

About Xenonics

Xenonics 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 are used by every branch of the U.S. Armed Forces as well as law enforcement and security agencies. Its SuperVision night vision device 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.


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