Avigilon Corporation Announces Third Quarter 2012 Results
VANCOUVER, Nov. 7, 2012 /CNW/ - Avigilon Corporation (TSX: AVO), a leader in high-definition (HD) surveillance systems, today announced its financial results for the three and nine months ended September 30, 2012. All figures are stated in Canadian dollars unless otherwise noted.
Third Quarter 2012 Highlights
-- Revenue was $25.5 million, an increase of 69% over Q3 2011
revenue of $15.1 million.
-- Gross margin was 51%, compared with 45% a year earlier.
-- EBITDA rose to $4.1 million, compared with Q3 2011 EBITDA of
$1.5 million. (See "Non-IFRS Measures" below.)
-- Net income was $2.2 million, compared with net income of $1.0
million in Q3 2011.
Year-to-Date 2012 Highlights
-- Revenue was $67.6 million in the first nine months of 2012, an
increase of 64% from $41.2 million in the same period last
year.
-- Gross margin was 49%, up from 44% in the prior year.
-- EBITDA was $7.4 million, an increase of 77% over $4.2 million
in the first nine months of 2011. (See "Non-IFRS Measures"
below.)
-- Net income was $4.1 million, an 87% increase compared to $2.2
million a year earlier.
"It was another strong quarter for Avigilon as we delivered record revenues and earnings in a traditionally slower third-quarter sales season," said Alexander Fernandes, president and chief executive officer at Avigilon. "The third quarter was also highlighted by a $26 million financing, which further strengthens our balance sheet to pursue the significant growth opportunities in global surveillance markets. To capitalize on these opportunities, we are highly focused on adding new talent to our sales team, continuing our track record of product innovation, and investing in marketing to make Avigilon a household name in our industry."
Financial Review
Avigilon reported revenue of $25.5 million in the three months ended September 30, 2012, an increase of 69% compared with revenue of $15.1 in the third quarter of 2011. Revenue growth continues to be driven by a strong rise in product sales volumes worldwide, reflecting sales of new product offerings, entry into new global markets, and greater customer adoption in existing markets. Avigilon experienced strong year-over-year sales growth in most regions, particularly in areas where the Company expanded sales staff over the past year.
Gross margin was $13.0 million in the third quarter (51% of revenue), compared with $6.9 million (45% of revenue) the previous year. The increased gross margin year over year reflects the sales mix as well as the impact of higher purchasing power and improved manufacturing efficiencies. Given the Company's near-term objective of rapid growth in revenue and market share, management is actively targeting a gross margin between 45% and 50%.
Selling and marketing expenses were $5.6 million in the third quarter of 2012, a $2.2 million, or 64% increase from a year earlier. The increase reflects planned growth spending to significantly expand the global sales team and marketing efforts, which the Company expects will drive future revenue growth.
Research and development (R&D) expenses, net of related income tax credits, were $1.2 million in the third quarter of 2012, a $0.4 million increase compared to $0.8 million in the prior year's third quarter. Gross R&D spend was $1.7 million in the third quarter of 2012, compared to $1.1 million in the prior year. The increase in spending is due to additional new hires, in line with the Company's plan to increase the product development team to enhance its product offering.
General and administrative expenses were $2.7 million in the third quarter, an increase of $1.3 million from a year earlier. The increase was primarily due to additional personnel and their related expenses to support Avigilon's growth and its status as a public company.
EBITDA was $4.1 million in the third quarter, an increase of 173% over the prior year, reflecting increased revenue and lower cost of sales. Net income in Q3 2012 was $2.2 million, compared with net income of $1.0 million in the same period last year. Earnings per share were $0.07 (basic) and $0.06 (diluted) for the third quarter of 2012, compared to $0.06 (basic) and $0.04 (diluted) a year earlier. At September 30, 2012, Avigilon had 36,174,099 basic and 41,863,699 diluted shares outstanding.
Financial statements can be downloaded from the Avigilon website at http://ir.avigilon.com or SEDAR at http://www.sedar.com/.
Conference Call
Avigilon has scheduled a conference call to discuss these results on Wednesday, November 7, 2012, beginning at 5:00 p.m. EDT (2:00 p.m. PDT). To access the live call, dial 647-427-7450 or 1-888-231-8191, or view the webcast at http://ir.avigilon.com. A replay will be available for one year on the Company's website, and for one week by dialing 778-371-8506, 416-849-0833 or 1-855-859-2056, reference number 45260871.
Non-IFRS Measures
The term "EBITDA" refers to earnings before deducting interest, taxes, depreciation, amortization, foreign exchange gain or loss, and stock-based compensation. Management believes that EBITDA is a useful measure as it provides an indication of the operational results of the business prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset amortization. EBITDA does not have a standardized meaning prescribed by International Financial Reporting Standards (IFRS) and is not necessarily comparable to similar measures provided by other companies. Accordingly, investors are cautioned that EBITDA should not be construed as an alternative to operating income or net income determined in accordance with IFRS as an indicator of the Company's financial performance or as a measure of its liquidity and cash flows.
About Avigilon
Avigilon (TSX: AVO) is defining the future of protection through innovative high-definition surveillance solutions. Delivering the world's best image quality, our industry-leading HD network video management software and megapixel cameras are reinventing surveillance. Information about Avigilon can be found at www.avigilon.com.
Forward Looking Statements
Certain statements contained in this news release, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things those risks identified in Avigilon's prospectus filed on SEDAR at www.sedar.com.
Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of Avigilon. Accordingly, readers should not place undue reliance on forward-looking statements or information. Avigilon undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.
Avigilon Corporation
Consolidated Statements of Comprehensive Income
for the three and nine months ended September 30, 2012 and 2011
(Expressed in thousands of Canadian dollars, except number of shares
and per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
$ $ $ $
Sales 25,508 15,109 67,612 41,180
Cost of sales (12,542) (8,252) (34,493) (23,242)
12,966 6,857 33,119 17,938
Operating expenses
Selling and marketing 5,596 3,406 16,488 8,724
Research and development 1,247 805 3,516 1,981
General and administrative 2,649 1,368 6,993 3,626
9,492 5,579 26,997 14,331
Operating income 3,474 1,278 6,122 3,607
Other income (expense)
Accretion expense - (138) - (413)
Interest and other, net 16 (55) 65 (101)
Foreign exchange gain (498) 479 (542) 323
(loss)
(482) 286 (477) (191)
Income before taxes 2,992 1,564 5,645 3,416
Current tax expense (60) (76) (130) (135)
Deferred tax expense (768) (481) (1,392) (1,076)
Net income and total 2,164 1,007 4,123 2,205
comprehensive income
Earnings per share
Basic 0.07 0.06 0.13 0.13
Diluted 0.06 0.04 0.12 0.09
Weighted average number of
shares outstanding (000s)
Basic 32,710 17,248 31,713 17,248
Diluted 36,436 30,166 34,754 29,817
Avigilon Corporation
Consolidated Statements of Financial Position
as at September 30, 2012 and December 31, 2011
(Expressed in thousands of Canadian dollars except number of shares and
per share data)
(Unaudited)
September 30, December 31,
2012 2011
$ $
Assets
Current assets
Cash and cash equivalents 45,552 12,418
Trade and other receivables 14,552 13,291
Inventories 9,515 11,254
Other financial assets - 88
Prepaid expenses 1,056 605
Research tax credits - 973
70,675 38,629
Non-current assets
Property and equipment 3,453 2,304
Intangible assets 52 46
Deposits 409 272
Deferred tax assets 1,749 1,703
Total assets 76,338 42,954
Liabilities
Current liabilities
Trade and other payables 10,338 7,765
Other financial liabilities 3 -
Leasehold incentive 59 59
10,400 7,824
Non-current liabilities
Leasehold incentive 235 279
10,635 8,103
Shareholders' equity
Capital stock 64,064 37,251
Equity compensation reserve 4,015 4,099
Deficit (2,376) (6,499)
65,703 34,851
Total liabilities and shareholders' equity 76,338 42,954
Avigilon Corporation
Consolidated Statements of Changes in Equity
for the nine months ended September 30, 2012 and 2011
(Expressed in thousands of Canadian dollars except number of shares and per share data) (Unaudited)
Equity Total
Capital stock compensation shareholders'
Shares Amount reserve Deficit equity
$ $ $ $
Balance, January 17,248,202 9,559 3,753 (10,328) 2,984
1, 2011
Net income and - - - 2,205 2,205
total
comprehensive
income
Share issue - (421) - - (421)
costs
Stock-based - - 232 - 232
compensation
Balance, 17,248,202 9,138 3,985 (8,123) 5,000
September 30,
2011
Balance, January 31,021,287 37,251 4,099 (6,499) 34,851
1, 2012
Net income and - - - 4,123 4,123
total
comprehensive
income
Share issue - (1,732) - - (1,732)
costs
Stock-based - - 557 - 557
compensation
Issuance of 5,152,812 27,471 - - 27,471
common stock
(Note 8)
Transfer to - 641 (641) - -
capital stock on
exercise of
options
Deferred income - 433 - - 433
tax effect on
share issue
costs
Balance, 36,174,099 64,064 4,015 (2,376) 65,703
September 30,
2012
Avigilon Corporation
Consolidated Statements of Cash Flows
for the three and nine months ended September 30, 2012 and 2011
(Expressed in thousands of Canadian dollars except number of shares and
per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
$ $ $ $
Cash flows from operating
activities
Net income for the period 2,164 1,007 4,123 2,205
Adjustments for non-cash items
Amortization 219 66 577 283
Write off of property and 20 77 20 79
equipment
Stock-based compensation 333 136 557 232
Accretion expense - 138 - 413
Deferred tax expense 768 481 1,392 1,076
Deferred tax credits (426) - (1,006) -
Unrealized foreign exchange 240 (411) 237 (388)
loss (gain)
Interest expense (income) (16) 55 (65) 101
3,302 1,549 5,835 4,001
Changes in working capital
Decrease (increase) in 327 3,735 (1,243) (1,963)
trade & other receivables
Decrease (increase) in (124) (3) (136) (444)
deposits
Decrease (increase) in 238 (944) 1,739 (4,692)
inventories
Decrease (increase) in 28 (45) (456) (127)
prepaid expenses and
deposits
Decrease (increase) in 973 255 973 (46)
research tax credits
Increase (decrease) in 4,173 (2,902) 3,096 63
trade and other payables
Net changes in working capital 5,615 96 3,973 (7,209)
Interest (paid) received 16 (55) 65 (101)
Income taxes paid (130) - (526) -
Net cash provided by (used in) 8,803 1,590 9,347 (3,309)
operating activities
Cash flows from investing
activities
Purchase of property and (851) (68) (1,758) (289)
equipment
Purchase of intangible assets (1) - (37) (7)
Net cash used in investing (852) (68) (1,795) (296)
activities
Cash flows from financing
activities
Proceeds from bank loan - (1,014) - 2,125
Issuance of common stock 27,041 - 27,471 -
Share issuance costs (1,704) (125) (1,732) (421)
Net cash provided by financing 25,337 (1,139) 25,739 1,704
activities
Effect of foreign exchange rate (139) 43 (157) (3)
changes on cash and cash
equivalents
Increase (decrease) in cash and 33,149 426 33,134 (1,904)
cash equivalents
Cash, beginning of period 12,403 - 12,418 2,330
Cash, end of period 45,552 426 45,552 426
Investor relations: Craig Armitage, TMX Equicom T: (416)
815-0700 ext. 278 carmitage@tmxequicom.com
Media relations: Angela St-Amour, Avigilon Corporation T: (604) 630-3410
angela.stamour@avigilon.com
SOURCE: Avigilon Corporation
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CO: Avigilon Corporation
ST: Ontario
NI: CPR ELE ERN CONF
-0- Nov/07/2012 21:00 GMT
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