Third Quarter 2011 Highlights
• Revenue was $15.1 million, an increase of 82% over Q3 2010 revenue of $8.3 million.
• Gross margin was 45.7%, compared to 45.5% in Q3 2010.
• Adjusted EBITDA was $1.5 million, an increase of 10% from $1.4 million in Q3 2010. (See “Non-IFRS Measures” below.)
• Net income was $1.0 million, up 34.9% from $0.7 million in Q3 2010.
• Subsequent to the end of the quarter Avigilon completed a $25 million financing transaction, raising gross proceeds of $20 million in an Initial Public Offering and proceeds of $5 million in a Secondary Offering, and listed its shares on the Toronto Stock Exchange.
Year-to-Date 2011 Highlights
• Revenue was $41.2 million in the first nine months of 2011, an increase of 86% over $22.1 million in the comparable period of 2010.
• Gross margin was 43.8%, compared to 44.9% the prior year.
• Adjusted EBITDA was $4.3 million, up 77% from $2.4 million a year earlier.
• Net income was $2.2 million, an increase of 111% from $1.0 million in the 2010 period.
“We are very pleased to report a very strong third quarter, in which we achieved 82% revenue growth while remaining solidly profitable,” said Alexander Fernandes, President and Chief Executive Officer, Avigilon. “We believe that there are significant opportunities available to us in the global video surveillance market. Our recent IPO provides us with the resources to expand our sales and marketing efforts and accelerate our product roadmap so that we are well positioned to capitalize on these opportunities.”
Avigilon’s revenue was $15.1 million for the three months ended September 30, 2011, an increase of $6.8 million or 82% compared to $8.3 million for the third quarter of 2010. The increase in revenue was due to higher product sales volumes worldwide, as a result of new product offerings, penetration into new markets, and greater customer acceptance in existing markets.
Gross margins were $6.9 million in the third quarter, an increase of $3.1 million or 83% from $3.8 million a year earlier. As a percentage of revenue, gross margins were 45.7% in Q3 2011 compared to 45.5% in Q3 2010.
Selling and marketing expenses were $3.2 million in the third quarter, a $1.9 million increase from $1.4 million the previous year. The increase was primarily due to increased sales volumes, additional personnel and their related expenses.
Research and development expenses were $0.8 million in the third quarter, a $0.3 million or 70% increase from $0.5 million in the prior year’s third quarter.
General and administrative expenses were $1.5 million in Q3 2011, compared to $0.7 million in Q3 2010. The increase was primarily due to additional personnel and their related expenses to support Avigilon’s growth.
Adjusted EBITDA was $1.5 million in the third quarter, an increase of $0.1 million or 10% compared to $1.4 million in the prior year’s third quarter.
Net income was $1.0 million in the third quarter of 2011, an increase of $0.3 million or 34.9% compared to a net income of $0.7 million in Q3 2010. Earnings per share were $0.06 (basic) or $0.04 (diluted) in Q3 2011, compared to $0.04 (basic) or $0.03 (diluted) a year earlier.
Avigilon’s weighted average share count in the third quarter of 2011 was 17,248, 202 (basic), or 30,165, 566 (diluted). As of November 14, 2011, after giving effect to the issuance of 4,444, 446 shares in the Company’s IPO and the associated conversion of 9,148, 639 preferred shares into common shares, the share count stood at 30,841, 287 (basic) or 34,610, 012 (diluted).
Avigilon has scheduled a conference call to discuss these results on Monday, November 14, 2011, beginning at 4:30 pm. EST (1:30 pm. PST). To access the call, dial 647- 427-7450 or 1-888-231-8191, or view the webcast at ir.avigilon.com. A replay will be available for one year on the Company’s website, and for one week by dialing 416-849-0833 or 1-855-859-2056, reference number 26887022.
The term "adjusted EBITDA" refers to earnings before deducting interest, taxes, depreciation, amortization, foreign exchange gain or loss, and stock-based compensation. Management believes that adjusted 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. Adjusted 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 adjusted 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.
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 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.