SENSIO Presents its 2011-2012 Financial Results
SENSIO Presents its 2011-2012 Financial Results
A fiscal year marked by the achievement of significant milestones and higher revenues from the Consumer Electronics market
MONTREAL, CANADA -- (Marketwire) -- 09/28/12 -- SENSIO Technologies Inc. ("SENSIO"/ "the Company") (TSX VENTURE:SIO) today presented its financial results for the fiscal year ending May 31, 2012. During this period, Company revenues dipped slightly from $1.25M to $1.13M, while the losses decreased from $4.59M last year to $4.33M for this fiscal year end. While SENSIO's total income experienced a slight decrease, its revenues from the Consumer Electronics market rose significantly from $78,766 to $901,512, a new record for the company. This increase is attributable to the growth in product sales to existing clients as well as the addition of new clients such as Samsung for the patent agreement on our SENSIO(R) S2D Switch technology. The fiscal year was marked by the achievement of impressive milestones and the conclusion of major agreements that demonstrate the progress of SENSIO in achieving its goal of becoming the world leader in stereoscopic image-processing technologies.
"The 2011-2012 fiscal year saw a lot of media gloom and pessimism toward the future of 3D," said Nicholas Routhier SENSIO's President and CEO. "However, there were never so many movies in 3D made, never so many 3D televisions sold, never so many consumers experiencing 3D, as today. After an inevitable period of adjustment with the launch of a new technology, the industry is now ready for a new development of 3D at home. With our portfolio of technologies and patents, our integration strategy with chip manufacturers and our new service 3DGO! which will be available this fall, SENSIO is now in an exceptional strategic position that will enable us to take advantage of the anticipated continued growth. The signing of integration agreements with two major manufacturers for our SENSIO(R) Hi-Fi 3D technology and the confirmation of agreements for content for 3DGO! following the 2011-2012 fiscal year end are concrete examples of this strategic position. SENSIO currently enjoys significant momentum in the market and we are excited to increase this momentum throughout the next fiscal year."
Highlights of the Fiscal Year Ended May 31, 2012
- Significant increase in revenues, up 1,045% from the Consumer Electronics market compared to the previous year;
- First patent license agreement exclusively for SENSIO(R) S2D Switch technology with Samsung Electronics co Ltd ;
- Major success in China already underway with the planned integration of SENSIO(R) Hi-Fi 3D technology in TCL 3D TVs continued during the current fiscal year with the confirmation of integration of SENSIO(R) Hi-Fi 3D technology in TCL 3D TVs and an agreement with a second Chinese manufacturer, Hisense;
- Continuing of the integration on chip strategy: Marvell Technology Group Ltd. added to the list of manufacturers that have integrated SENSIO(R) Hi-Fi 3D technology in their products for 3D TVs;
- SENSIO announced the creation of a dedicated 3D video-on-demand service, 3DGO!, within the framework of its content strategy;
- Successful first live-3D distribution of the last three games of the NBA Finals in Europe, generating SENSIO's first revenues from its content-distribution activity in the Live 3D market;
- Alliance with Sequence SDP to present a series of live 3D concerts.
"Live 3D" Market - A change in strategy to focus on series of events
Activities in the Live 3D market generated total revenues of $142,514 for the 2011-2012 fiscal year, compared to $1,034,890 in 2010-2011, a decrease of $892,376. This significant decrease is mainly due to two factors: the decrease in the number of Live 3D events in theaters and changes in the methods of charging for access to the SENSIO(R) Hi-Fi 3D technology in theaters. Despite a good start with the success of the presentation of the NBA Finals in June 2011 (with a record occupancy rate of 86% for the last game), the rest of the year was marked by contingencies beyond the control of SENSIO such as the cancellation of live 3D broadcast of Rugby World Cup and the NBA lockout with whom SENSIO had presented the last two NBA All-Star weekends. Partly in response to these incidents and to meet the needs of its customers, SENSIO has developed a new strategy based on the presentation of series of cultural or sports events instead of focusing on single events. The signing of an agreement with Sequence SDP is the first concrete manifestation of this new focus, which will allow SENSIO to diversify its content and generate more recurring revenues.
On the technology side, SENSIO has changed its business model by modifying its pricing method, shifting from a single payment (at the license activation) to gradual payments per event presented. This change was made in order to encourage the continued deployment of its technology in movie theaters while SENSIO proceeds with its efforts to develop series of events. . With this strategy, the network of theaters enabled to present events in SENSIO(R) Hi-Fi 3D rose from 842 to 1048 theaters, a growth of 19.6%. SENSIO still considers increasing the number of cinemas in the SENSIO(R) Live 3D network in the United States and Asia a priority which it will consistently pursue.
"Although we were not able to get the desired results during the past year, we are more determined than ever to leverage our leading position in this market," said Richard LaBerge, Executive Vice-President and Chief Marketing Officer. "We are continuing our work with suppliers to increase the presence of our technologies in the digital cinema network, as demonstrated by our agreement with Christie Digital for the integration of the SENSIO(R) Hi-Fi 3D technology in their new digital processor, SKA-3D. In addition to the agreement with Sequence announced during the 2011-2012 fiscal year, the agreement concluded with Front Row Networks at the beginning of the current fiscal year confirms our desire to focus on series of events of a cultural nature. With the experience gained in recent years and the introduction of our new event strategy, we are confident of repeating the many successes that we have seen in the past year on this market."
The market for Consumer Electronics - Revenue growth and significant accomplishments
For the fiscal year ending May 31, 2012, activities in the Consumer Electronics market generated revenues of $901,512 compared to $78,766 a year earlier, an increase of $822,746 or 1,045%. During this fiscal year, the Company continued its expansion strategy in this market, reaching several milestones. First, SENSIO signed a letter of intent with Chinese manufacturer TCL to integrate SENSIO(R) Hi-Fi 3D technology in their 3DTVs. Shortly after the end of the fiscal year, this letter evolved into a licence agreement, and TCL became the second major manufacturer to adopt SENSIO(R) Hi-Fi 3D after Vizio. SENSIO also continued to develop its integration-on-chip strategy, adding Marvell to its list of manufacturers, and continued its efforts to promote SENSIO(R) Autodetect with manufacturers. SENSIO(R) Autodetect is designed to automatically detect, with superior reliability and without the need for end-user intervention, all the most commonly-used frame-compatible stereo 3D video formats (HDMI 1.4a): SENSIO(R) Hi-Fi 3D, side-by-side, top-and-bottom, or a 2D signal.
In addition, SENSIO has signed one of the most important agreements in its history by completing a patent license on the SENSIO(R) S2D Switch with the world leader Samsung Electronics, an agreement which demonstrates the Company's ability to generate income on the basis of its patents. As of May 31, 2012, SENSIO's patent portfolio had 8 active patents and 39 patents pending in over 15 different patent families. Similarly, in order to enhance and increase the demand for its SENSIO(R) Hi-Fi 3D, the Company continued the development of its video-on-demand service, 3DGO!, announced at CES in January and whose launch is planned this fall.
"Once again during the past fiscal year, our strategy to integrate SENSIO(R) Hi-Fi 3D on chips for the Consumer Electronics market has demonstrated its effectiveness in drastically reducing the length of the sales cycle and facilitating the conclusion of agreements with TCL and Hisense at the beginning of this fiscal year," said Nicholas Routhier. "With the conclusion of these two agreements, we have reached a crucial stage in our development strategy in China, one of SENSIO's two priority territories along with the United States. In addition, our content strategy, which will materialize shortly with the launch of 3DGO!, also played an incentivizing role in the conclusion of these agreements. Our content offerings address a real market need and are more substantial, as demonstrated by our agreements with three movie studios: Starz Digital Media, National Geographic, and Big Picture Digital Productions. Finally, we strongly believe in the intrinsic value of our patents. Protecting them is very important to us and we put a lot of effort into doing so. The agreement with Samsung for SENSIO(R) S2D Switch is an extraordinary achievement and confirms the relevance of our patent licensing strategy on which we have been working for several years now. "
Summary of Financial Results
For the fiscal year ending May 31, 2012, SENSIO's revenues amounted to $1,130,541, compared to $1,253,267 in 2011, a decrease of $122,726, or 9.8%. The year to year decrease is primary due to the lack of major live 3D event broadcasts.
For the fiscal year ending May 31, 2012, SENSIO's gross profit margin was $1,016,547 (89.9% of revenues), compared to $1,225,538 (97.8% of revenues) for 2011.
For the fiscal year ending May 31, 2012, sales and marketing expenses amounted to $2,833,000, compared to $3,118,057 the previous year, a decrease of $285,057 or 9.1%. The decrease is primarily due to the Company's completion in the current year of non-recurring marketing initiatives (new company image, promotional material and trade shows, for example) started in the previous year to support Live 3D event distribution. This offsets the increased expenses related to the addition of staff, product development efforts, and the hiring of external consultants specializing in business development in the U.S and Asia.
For the fiscal year ending May 31, 2012, research and development expenses totalled $803,863 compared to $1,010,089 for the previous year. This decrease of $206,226 or 20.4% essentially comes from non-recurring expenses related to research and development projects.
Administration expenses amounted to $1,620,062 for the fiscal year ending May, 31, 2012 compared to $1,750,151 the previous year, a decrease of $130,089 or 7.4%. This variance is mainly attributable to an increase of $82,961 related to depreciation of assets, a $62,500 impairment of the Advances on royalties, a decrease in salary and share based compensation and a decrease in legal fees.
Selected Financial information As at and for the year ended May 31, May 31, May 31, 2012 2011 2010(1) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Statements of Comprehensive Loss $ $ $ ---------------------------------- Revenues 1,130,541 1,253,267 693,368 Gross profit 1,016,547 1,225,538 535,967 Net loss and comprehensive loss (4,334,874) (4,590,830) (3,174,454) Basic and diluted loss per share (0.08) (0.09) (0.07) ---------------------------------------------------------------------------- Statements of Financial Position ---------------------------------- Total assets 4,610,672 8,582,177 11,931,358 Non-current financial liabilities(2) Nil Nil Nil Dividends declared Nil Nil Nil ---------------------------------------------------------------------------- (1) Prepared in accordance with Canadian GAAP. (2) Non-current financial liabilities exclude deferred revenue and lease inducement of $505,965 in 2012 ($73,240 in 2011 and $48,440 in 2010)
For more details, please see the Management Discussion and Analysis and the Financial Statements for the reference quarter on the SENSIO Website: www.sensio.tv.
About SENSIO Technologies Inc. (SENSIO):
Founded in 1999, SENSIO Technologies Inc. (www.sensio.tv) is a pioneer in the 3D industry. Its vision, expertise and state-of-the-art solutions, based on diversified stereoscopic image-processing technologies, have been trusted by some of the biggest names in the broadcasting and consumer electronics sectors, as well as for live 3D events in cinemas, to power numerous industry firsts, initiate new business models and generate immediate revenue with a distinctive 3D offering.
SENSIO enables its clients to deliver the best possible 3D experience for the end-user through a broad portfolio of licensed products, based on quality, content, usability and compatibility. These include its flagship, award-winning technology, SENSIO(R) Hi-Fi 3D, the premium-quality frame-compatible format.
SENSIO's technologies are the object of patents and intellectual property protection proceedings worldwide. SENSIO is listed on the Toronto TSX Venture Exchange (SIO).
SENSIO(R) is a registered trademark of SENSIO Technologies Inc.
This news release contains forward-looking statements that reflect the company's expectations with regard to future events. Actual events could differ significantly from those anticipated in this document.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: Investor relations Advent Management Inc. Sylvain Archambault Strategic Advisor, Capital Markets +1 866 703-4887 firstname.lastname@example.org
SENSIO Technologies Eric Choquette Chief Financial Officer +1 514 846-2022 x17 email@example.com