CSI Update: HOLD XRSC

XRSC announced Q2 2014 earnings (quarter ended March 31, 2014) on May 8th. Revenues were $12.8 million down from $14.5 million last year. XRSC is a bit similar to BLIN as they are transitioning their legacy software business to a subscription based service and revenues take a hit as they don’t book a big software sale upfront, but rather record it monthly in smaller pieces. But subscription based revenues are generally worth more to a buyer than one-time sales. GAAP net loss was $.07 a share, compared to a gain of $.01 per share last year. Non-GAAP earnings were $1.2 million or $.04 per share compared to $2.2 million or $.08 a share last year. Our valuation rose to $5.60 up from $5.57 last quarter. XRSC is trading at about 50% of our valuation. We will continue to HOLD as results were not that exciting, but the valuation is still compelling.

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