Vizrt Ltd. : Vizrt Reports Q4 and 2012 Results - Growth in APAC and The Americas partially offsetting continued market softness

   Vizrt Ltd. : Vizrt Reports Q4 and 2012 Results - Growth in APAC and The
      Americas partially offsetting continued market softness in Europe

Continued margin growth

Bergen, Norway, February 14, 2013. Vizrt Ltd. (Oslo Main List: VIZ)

Revenues of MUSD 121.8 for 2012, flat  on a dollar neutral basis, compared  to 
MUSD 125.3 in  2011, despite  the challenging  market conditions  for most  of 
2012.  Gross margin and recurring EBIT^[1] improved compared to 2011. The  MAM 
product  line  continued   to  grow,  despite   the  economic   uncertainties. 
 Geographically, APAC  and  the  Americas posted  9%  growth  each,  partially 
offsetting slowdown in Europe. Vizrt posted a recurring EBIT of MUSD 19.3 (16%
margin) for FY 2012 and MUSD 7.0 (23% margin) in Q4 2012.

 
 

HIGHLIGHTS

  * Revenues for FY 2012 came in at MUSD 121.8, on a dollar neutral basis,
    compared to MUSD 125.3 in 2011. Revenues for Q4 2012 were MUSD 30.3, down
    9% compared to the same period LY.  
  * Recurring EBIT was MUSD 19.3 for FY 2012 and MUSD 7.0 for Q4 2012,
    corresponding to a 16% and 23% margin respectively, compared to MUSD 18.5
    (15%) and MUSD 7.2 (21%) for the same periods LY.
  * EBITDA^[2] reached MUSD 25.8 for FY 2012 and MUSD 8.9 for Q4 2012,
    corresponding to a 21% and 29% margin respectively, compared to MUSD 24.9
    (20%) and 8.9 (27%) for the same periods LY.
  * The Company posted a net profit of MUSD 4.7 (4%) for FY2012 and MUSD 3.9
    (13%) for Q4 2012, compared to MUSD 16.0 (13%) and MUSD 6.0 (18%) for the
    same periods LY. Net income was impacted by a MUSD 7.8 non-cash impairment
    charge recorded in Q2 2012 and MUSD 1.4 revaluation of contingent
    consideration related to the LiberoVision acquisition.
  * Backlog to date is MUSD 47.1, up 2% compared to the same period LY.
  * Cash flow from operating activities FY 2012 was MUSD 17.1, compared to
    MUSD 24.6 for FY 2011. Cash flow from operating activities in Q4 2012 was
    MUSD 3.8, compared to MUSD 12.4 for Q4 2011. As of December 31, 2012 the
    cash position amounted to MUSD 78.9, up from September 30, 2012 by MUSD
    3.6. 
  * Third and final closing for the acquisition of the remaining 20% of
    LiberoVision is to be concluded no later than February 28, 2013. The
    consideration, based on LiberoVision adjusted EBIT for 2012 is MCHF 2.2
    (app. MUSD 2.4), to be paid 80% in cash and 20% in Vizrt's shares. MUSD
    1.4 was recorded in Q4 2012 to adjust the contingent liability to the
    final consideration.
  * The 2012 annual impairment test for Escenic's intangible assets is
    currently being performed, and will be completed by the time the audited
    financial statements will be submitted. As of December 31, 2012, such
    intangible assets amounted to MUSD 3.0. If the Company determines that any
    portion of intangible assets is to be impaired, it will recognize a
    non-cash charge that would impact earnings and earnings per share for the
    fourth quarter of 2012, as well as for the full financial year ended
    December 31, 2012.
  * The board of directors is to resolve on dividend distribution in its next
    meeting, scheduled to be held April 18, 2013.  

Management summary and outlook

Martin Burkhalter, Vizrt CEO, commented on the results: "Despite tough  market 
conditions in Europe in 2012,  we were able to  conclude the year with  nearly 
flat revenues compared  to last year,  as well as  improving our margins.  The 
decline in revenues was due to the continued market weakness in Europe,  where 
macro-economic  related   uncertainties  resulted   in  substantially   longer 
investment decision  cycles,  especially  with regards  to  larger  projects.  
Although these effects weigh on the global business environment, we managed to
increase our sales in APAC and The Americas."

"Our margin  improvement  is the  direct  result of  a  strong focus  on  cost 
control, as well as an improvement of our gross margins. Despite our focus  on 
cost control,  we  have not  compromised  our capabilities  to  implement  our 
strategic objectives and further development  of the company, maintaining  our 
innovative edge, and offering prime products and services enabling our clients
in achieving  high quality  and workflow  efficient content  distribution  and 
channel differentiation."

"As to our product lines, BG  has been relatively stable. Notwithstanding  the 
difficult market conditions we  recorded further growth in  MAM. We feel  that 
broadcasters and other content owners are recognizing the importance of a file
based workflow and the value of extending and expanding the economic life  and 
usability of media  assets. We expect  broadcasters to continue  to invest  in 
this area and we therefore see an  even stronger upside for this product  line 
once there is a more sustainable global economic recovery. Performance of  our 
Online business was below expectations. This product line is strongly affected
by the uncertainties in the macroeconomic environment."

"We see ourselves  returning to  our earlier communicated  13% target  revenue 
growth, mid- to long-term.  For 2013  we anticipate growth, though in the  mid 
to high single digit range.  Growth will come predominantly from The  Americas 
and APAC, with Europe expected to show a modest recovery in the second half of
the year.  For  2013 we will  maintain our  focus on cost  control, though  as 
said, without  compromising the  strength  of our  organization, and  we  will 
continue to invest in expanding our product and market leadership position." 

Vizrt product lines and geographical overview

Broadcast Graphics (BG)

BG revenues for FY 2012 of MUSD  94.3 showed a slight decrease of 3%  compared 
to FY 2011 and  a 12% decrease comparing  Q4 2012 to Q4  2011. Compared to  Q3 
2012, BG revenues were up 4%. BG revenues accounted for 77% of total revenues.

Media Asset Management (MAM)

MAM revenues FY  2012 came  in at MUSD  21.9, a  7% increase Y-o-Y  and a  12% 
increase comparing Q4 2012 to Q4 2011. Compared to Q3 2012, MAM revenues  were 
down by 7%. MAM revenues FY 2012 accounted for 18% of total revenues.

Online (ONL)

ONL revenues for FY 2012 came in at MUSD 5.7, compared to MUSD 8.3 for 2011, a
decrease of  32%. Comparing  Q4 2012  to Q4  2011 revenues  decreased by  29%. 
Compared to Q3  2012 ONL revenues  were up by  15%. ONL revenues  for FY  2012 
accounted for 5% of total revenues.

Geographical Overview

Both, The Americas and APAC posted 9% growth as compared to 2011. The Americas
revenues totaled MUSD 30.3, as compared to MUSD 27.8 in 2011, and APAC came in
with MUSD 31.1, as compared to MUSD 28.5 in 2011. Revenues in the EMEA  region 
were affected by the ongoing  weakness in the macro-economic environment,  and 
were down by 13% from MUSD 69.1 to MUSD 60.4.

FINANCIALS

Gross profit and gross margin

The gross margin for 2012 was 67%, as compared to 66% for the same period  LY. 
The increase is mainly due to improved delivery of MAM projects and  continued 
improved margins  for the  MAM product  line. The  gross profit  for 2012  was 
affected by a MUSD  2.6 amortization of  intangible assets from  acquisitions, 
compared to MUSD 2.8 for FY 2011. Adjusted for these amortization effects, the
gross margin was 69%, compared to 68% LY.

The gross margin for Q4 2012 was 70%,  as compared to 69% for the same  period 
LY.  The gross profit was  affected by MUSD 0.7 in  Q4 2012, compared to  MUSD 
0.7 in Q4 2011, in relation to the amortization of intangible assets resulting
from acquisitions. Adjusted for these  amortization effects, the gross  margin 
was 72%, compared to 71% for FY 2011.

Recurring operating expenses

Total recurring operating expenses for FY 2012 and Q4 2012 were MUSD 62.6  and 
MUSD 14.3, down 3% compared to FY 2011, and significantly lower as compared to
each of the first  three quarters of  2012. The decrease is  mainly due to  an 
annualized adjustment of the variable compensation component, included  mainly 
in OPEX, and based on annual target achievements as well as a lower  headcount 
resulting from  our  policy  not  immediately  to  fill  non-mission  critical 
vacancies. The quarterly average recurring  OPEX of MUSD 15.7 better  reflects 
the recurring OPEX cost base.

Currency effects

Adjusted on a dollar neutral basis, revenues for 2012 came in at the same
level as 2011. The effect of currency fluctuations in the second half of the
year, offset the effects as reported for the first half of 2012.  The net
currency effect, both on OPEX and revenues, was near to neutral and of no
material influence on a full-year basis.

Order backlog

The order backlog to date is MUSD 47.1,  up 2%, compared to LY MUSD 46.4,  and 
down 1% compared to the Q3 2012  results release date. BG backlog was at  MUSD 
25.3, MAM backlog at  MUSD 18.3 and ONL  backlog at MUSD 3.5.  For BG and  MAM 
backlog was  up 1%  and 9%,  respectively,  compared to  the same  period  LY, 
whereas for ONL the backlog was down 24% comparing to the same period LY.

Balance sheet, cash flow and liquidity

Cash flow generation from operating activities in 2012 was MUSD 17.1, compared
to MUSD 24.6  in 2011. Cash  flow generation from  operating activities in  Q4 
2012 was MUSD 3.8, compared to MUSD 12.4  in Q4 2011. A cash dividend of  MUSD 
10.0 was paid in Q1 2012.

Vizrt has a strong financial position with no interest-bearing debt and a  net 
cash position  of  MUSD 78.9  as  of  December 31,  2012  (including  MUSD 0.6 
restricted cash), compared  to MUSD 73.1  as of December  31, 2011  (including 
MUSD 0.6 restricted cash).  Furthermore, shareholders' equity  as of  December 
31, 2012 was MUSD 122.5, which is equivalent to an equity ratio^[3] of 76%.

Taxes 
As communicated in  2011, Vizrt Ltd.  is undergoing a  tax assessment for  the 
years 2006 through 2008. A tax order and a tax assessment have been issued for
the year 2006  and 2007  respectively, both appealed  by the  Company. No  tax 
assessment  has  so  far  been  issued  for  2008.  Currently,  the  Company's 
management is unable to  predict the final outcome  of the deliberations  with 
the tax authorities on its consolidated financial results, however the company
has provisions for the amounts currently deemed likely.

Organization

As of December 31, 2012, the Company had 575 employees, compared to 585 as  of 
December 31, 2011. This decrease in  headcount is due to the company's  strict 
recruitment policy in 2012 limiting both replacements and new recruitments.

Please use the links  at the end of  this message to download  a full Q4  2012 
report including tables and the management presentation.

-------------------------

1' Excluding  MUSD 7.8 non cash goodwill and other assets impairments  related 
to Escenic  recorded  in  Q2  2012 and  MUSD  1.4  revaluation  of  contingent 
liability related to Liberovision acquisition recorded in Q4 2012.

2' EBITDA: Earnings before interest, tax, depreciation and amortization.

3' Equity divided into Total liabilities and Equity

-------------------------

 

Analyst conference

An Analyst Conference will be held on February 14, 2013 at 09:30 a.m. (CET) at
DNB Head Offices, Dronning Eufemias Gate 30, BJØRVIKA in Oslo.

Management will furthermore discuss the FY  2012 results in a conference  call 
at 1.15 p.m. (CET) Call details are as follows:

+47 24 159584 (Norway)

+44 203 3679216 (UK)

+49 69 247501895 (Germany)

A replay of the call will be available until February 21, 2013. Please use the
following dial-in-numbers:

+49 30 868757040 (Germany); +44 203 024 54 07 (UK), +1 408 9160685 (US)

passcode:  9418547

Investors and media contacts:

 

Martin Burkhalter
President & CEO
+41 22 365 75 01
mbu@vizrt.com

Ofra Brown
CFO
+47 5351 8040
ofra@vizrt.com

SCHWARZ Financial Communication
Frank Schwarz
+49 611 1745 398 11
schwarz@schwarzfinancial.com

About Vizrt:
Vizrt provides real-time 3D graphics and asset management tools for the
broadcast industry - from award-winning animations & maps to online publishing
tools. Vizrt's products are used by the world's leading broadcasters and
publishing houses, including: CNN, CBS, Fox, the BBC, BSkyB, ITN, ZDF, Star
TV, Network 18, TV Today, CCTV, NHK, The Globe and Mail, Times Online, The
Telegraph, and Welt Online.  Furthermore, many world-class production houses
and corporate institutions such as the Stock Exchanges in New York and London
use Vizrt systems.

Vizrt is a public company traded on the Oslo Main List: VIZ, ISIN:
IL0010838154. For further information please refer to www.vizrt.com
 
This press release contains forward-looking statements with respect to the
business, financial condition and results of operations of Vizrt and its
affiliates. These statements are based on the current expectations or beliefs
of Vizrt's management and are subject to a number of risks and uncertainties
that could cause actual results or performance of the Company to differ
materially from those contemplated in such forward-looking statements. These
risks and uncertainties relate to changes in technology and market
requirements, the company's concentration on one industry, decline in demand
for the company's products and those of its affiliates, inability to timely
develop and introduce new technologies, products and applications, and loss of
market share and pressure on pricing resulting from competition, which could
cause the actual results or performance of the company to differ materially
from those contemplated in such forward-looking statements. Vizrt undertakes
no obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Management Presentation
Report of Q4 2012

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Source: Vizrt Ltd. via Thomson Reuters ONE
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