Archive for February, 2011

Digital Vision Announces Timetable for 100:1 Reverse Stock Split

Broadcast technology vendor financials | Posted by Joe Zaller
Feb 09 2011

Sweden-based post production tools vendor Digital Vision today announced the time timetable for a 100:1 reverse stock split.

The company said the decision to conduct the reverse stock split was taken at an extraordinary general meeting of shareholders on February 1, 2011. 

The reverse split means that 100 shares, each with par value of 0.025 SEK, will be consolidated into one share of par value of SEK 2.50. After the reverse split, the number of outstanding shares in Digital Vision will be reduced from 64,7723,000 shares to 6,477,230 shares.

According to the company’s timetable, February 11th, 2001 will be the last day of trading with the current number of shares; and February 14, 2011 will be the first day of trading for the consolidated shares.

Digital Vision has been making a number of changes since it reported a 36% drop in its Q3 2010 revenue, which it attributed to weakness in the US market and the impact of currency.

Last month, Digital Vision announced that it had acquired Image Systems, a specialist provider of image processing and motion analysis, in a cash and stock deal valued at approximately $7.2m.  As part of that deal, the company said it would make Mikael Jacobsson, the largest shareholder in Image Systems, the new CEO of Digital Vision, replacing current CEO Bengt Broman.

In a statement, Digital Vision said that planned reverse stock split is part of a previously announced financial restructuring program that was planned prior to the acquisition of Image Systems.

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Vitec Says it Will Beat Profit Expectations, Appoints New CFO

Broadcast technology vendor financials | Posted by Joe Zaller
Feb 08 2011

UK-based Vitec Plc, which owns a large number of brands in the broadcast industry, said recently that it has had strong trading results and that it expects to report underlying pre-tax profits that are ahead of analyst consensus estimates.

The company also announced that Richard Cotton, Group Finance Director, has left the company for personal reasons.  The company has appointed Nick Humby as Interim Chief Financial Officer to oversee the finance function pending the appointment of a permanent replacement; the search for this replacement has commenced.  Nick has extensive experience in the broadcast industry. He was also Group Finance Director of Manchester United plc from 2002 to 2007.

Vitec’s Videocom division is comprised of a dozen brands that serve various parts of the broadcast industry: Anton/Bauer, Autoscript, The Camera Store, Litepanels, Microwave Service Company, Nucomm, OConnor, Petrol Bags, RF Central, Sachtler, Vinten and Vinten Radamec.  The company also owns broadcast rental & services provider Bexel.

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Avid Announces Full Year Results, Nears Q4 Break Even as Revenue Increases 12 Percent

broadcast industry technology trends, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 04 2011

Avid announced that its revenue for the fourth quarter of 2010 was $195.3m, an increase of 12% versus the same period a year ago, and an increase of 18% versus the previous quarter.

The company came very close to breaking even in the quarter, posting a GAAP net loss of $571,000, compared to a GAAP net loss of $17.9m during the same period a year ago, and a GAAP net loss of $10m during the previous quarter.

On a non-GAAP basis (excluding various charges), the company said its net income for the fourth quarter of 2010 was $14.2m, compared to a non-GAAP net loss of $1.4m during Q4 2009, and a non-GAAP net income of $1.6m last quarter.

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Highlights for the fourth quarter:

  • Video revenue in the quarter was $117.8m, up 11% versus Q4 2009, and up 18% versus the previous quarter.  Video revenue accounted for 60% of the total revenue during the quarter.
  • Audio revenue in the quarter was $77.6m, up 13% versus Q4 2009, and up 20% versus the previous quarter.
  • Revenue from products was $162.9, up 16% versus Q4 of last year, and up 21% versus the previous quarter.  Product revenue accounted for 83% of the total revenue during the quarter.
  • Service revenue in the quarter declined 7% to $15.1m versus last year, and fell by more than 50% versus the $30.8m achieved last quarter.

 

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For the full year, the company’s revenue was $678.5m, up 8% over 2009, and above the previously issued full year guidance of $655m – $665m.

On a GAAP basis, Avid lost $37m in 2010 versus a loss of $68.4m in 2009. Excluding charges, the company said its non-GAAP net income for 2010 was $9.2m, compared to a non-GAAP net loss of $12.7m in 2009.

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Highlights for the full year:

  • Video revenue in 2010 was $395.9, up 6% versus 2009.  Video revenue accounted for 58% of the company’s total revenue in 2010, down slightly from 60% of revenue in 2009
  • Audio revenue in 2010 was $282.7m, up 11% versus 2009.
  • Revenue from products in 2010 was $560m, up 10% versus 2009. Product revenue accounted for 83% of the company’s total revenue in 2010, up slightly from 81% in 2009
  • Service for 2010  was $118.6m, down about 1% versus 2009.

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According to company chairman and CEO Gary Greenfield the company’s return to non-GAAP net income for 2010 is a significant milestone in the transformation of the business. “We feel well positioned from a product and financial standpoint as we move into 2011,” said Greenfield.

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You can read the full Avid full Q4 and full year earnings release here.

Information about Avid’s Q3 2010 performance is here.

Information on Avid’s previously issued financial guidance is here.

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More Broadcast Vendor M&A: Cisco to Buy Inlet Technologies for $95m

broadcast industry technology trends, Broadcast Vendor M&A | Posted by Joe Zaller
Feb 04 2011

Cisco Systems announced today that it intends to pay $95m to acquire Inlet Technologies, a provider of video ingest, transcoding and streaming products. 

Cisco says the deal will strengthen the capabilities of its Videoscape TV platform, which has been designed to allowing service and content providers to deliver video content across multiple IP networks.

Under the terms of the agreement, Cisco will pay approximately $95 million in cash and retention-based incentives in exchange for all shares of Inlet. The acquisition is subject to various standard closing conditions and is expected to be complete in the first half of calendar year 2011. 

Inlet, which was founded in 2003, has achieved impressive growth recently as the demand for multi-platform content distribution has taken off globally.  Last month Inlet issued a press release stating that its 2010 revenue had doubled versus the company’s 2009 revenue, and that it had expanded its customer base by 70%.

While that press release did not reveal Inlet’s actual revenue, the company did disclose its 2009 revenue to Inc. Magazine, which ranked Inlet at #647 in its 500|5000 in 2010 and named it the 45th fastest growing software company in America.

According to the profile in Inc Magazine, Inlet’s revenue in 2009 was $7.6m, so its 2010 revenues must have been in the region of $15m.

If this is the case, then Inlet’s investors appear to have achieved a pretty health valuation multiple of more than 6x revenue.

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Update:

This post from Rick Smith confirms that Cisco paid 6X revenue for Inlet.

Capitol Broadcasting, the parent of WRAL Tech Wire, is among the investors that are being handsomely rewarded for backing Inlet Technologies with a nice “exit.” On Friday, Cisco said it would pay $95 million for the Raleigh video technology firm. That’s at least six times Inlet’s estimated annual revenues for 2010 and nearly five times the amount of venture capital Inlet raised over the years.

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You can read the full Cisco announcement about the Inlet deal here.

Inlet’s recent press release about doubling its revenues in 2010 is here.

The Inc. Magazine profile of Inlet Technologies is here

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Ross Video Says Orders Jumped 44 Percent in Q1

broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Feb 04 2011

Ross Video CEO (and majority shareholder) David Ross announced that his company’s orders jumped 44% during the first quarter of 2011.

Rather than issuing a press release, Ross made the announcement through the website LinkedIn, where he posted the following update:

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Ross Video is a private company.  They don’t disclose any financial data, so it’s not clear what level of orders and sales revenue the company actually achieved during the quarter.  Also undisclosed is how much of this growth is organic, and how much was derived through the acquisitions the company made during the past year, including Dutch graphic firm Media Refinery and Australian routing switcher vendor Codan Broadcast. Nevertheless, Ross Video is a substantial and significant company in the broadcast industry, so it stands to reason that the numbers are good. 

Interestingly, Ross Video is one of the few companies in the broadcast industry that has consistently said that they have been making money (and growing) over the past several years. 

As the company has grown (both organically and through acquisitions) it has positioned itself as a major player in the broadcast industry.  It will be interesting to see if the company can keep the momentum going throughout the rest of 2011.

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Harmonic Announces Q4 and Full Year 2010 Results

broadcast technology market research, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 03 2011

Harmonic reported that its net revenue for the fourth quarter of 2010 was $138.2m. This includes a full quarters’ revenue from Omneon, which contributed $30.9m, but excluded $0.8 million of certain deferred revenue that would otherwise have been recognized by Omneon had the acquisition not occurred.

Excluding Omneon, Harmonic’s Q4 stand-alone net revenue was $107.3m, up 8% from the previous quarter and up 24% from the fourth quarter of 2009.  International sales represented 54% of the company’s revenue for the quarter. 

In order to help understand the impact of the Omneon acquisition on its performance, Harmonic CFO Carolyn Aver provided the following slide in the company’s presentation to equity analysts:

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On a GAAP basis the company reported a net loss of $13.7 million in the fourth quarter, compared to net income of $47 thousand, for the fourth quarter of 2009. GAAP gross margins in the quarter were 44%.

For the full year 2010, Harmonic’s stand-alone net revenue was $386.8m, up 21% from 2009.   The company attributed its growth to the continued global move to HDTV operations as well as year-end spending by some customers. GAAP net loss was for the full year was $4.3m, compared to a GAAP net loss of $24.1m in 2009.

The company provided forward looking guidance, saying that it expects revenue for the first quarter of 2011 to be in the range of $129m to $132m, with GAAP gross margins in the range of 45% to 47%. Analysts had been expecting revenue of about $128.4m.

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Strategic Imperatives for Future Growth

On the company’s earnings conference call with equity analysts, Harmonic president and CEO Patrick Harshman said that the with the acquisition of Omneon, the company was now positioned as a leading infrastructure company for video, and that it now has unique opportunities to grow.

Harshman went on to say that the company had identified four strategic imperatives for the future:

“First, we intend to leverage our increased scale, solution breadth and competitive strength to expand our brand and deepen our customer relationships in both developed markets, while also continuing to work aggressively to capture greater market share in emerging economy markets.

“Second, we intend to extend our leadership position in new applications in new customer verticals; namely, multi-screen, new internet media services and video production.

“Third, our objective is to continue to lead the market in technology innovation and deliver on the exciting pipeline of new products and solutions we have scheduled for release over the course of the year.

And finally, we intend to continue to enhance our operational execution.”

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Omneon Integration:

Company CFO Carolyn Aver said that the integration of Omneon was going well and that company had taken the following actions during the fourth quarter:

  • Integration of the Omneon operations organization
  • Moved the Omneon manufacturing lines to Harmonic’s contract manufacturer in Malaysia
  • Integrated the Omneon G&A team with Harmonic’s
  • Migrated Omneon’s ERP process to Harmonic’s Oracle system
  • Physically relocated Omneon staff into Harmonic’s offices in San Jose California and the UK

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Aver said that these actions would likely result in synergy savings of around $10m during 2011.

Harshman provide an upbeat statement, saying “Moving into 2011, we expect broadcasters, media companies and video service providers around the globe to continue to invest in producing and delivering high value video programming and services. You can expect us to continue to introduce innovative new technologies that enable this dynamic video marketplace to proceed. We’re excited about our expanding opportunities for growth in 2011 and beyond.”

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You can read the full Harmonic Q4 and full year 2011 earnings release here.

A copy of the Harmonic Q4 investor presentation is here.

A transcript of the company’s equity analyst conference call is here.

A write up of Harmonic’s Q3 2010 results are here.

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Dolby Reports Increase Revenue and Profit in Q1, But Cuts Guidance Due to Slowdown in PC Market

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 03 2011

Dolby Labs reported that revenue for the first quarter or its fiscal year was $242.7m, an increase of 10% versus the same period a year ago, and an increase of 6% versus the previous quarter.

Net income in the quarter was $86.4m, an 25% increase compared to the first quarter of last year, and an increase of 33% versus the previous quarter.   The company said that its net income figure for the quarter was helped by various discrete tax items, primarily a one-time tax benefit resulting from the release of a deferred tax liability of $11m related to the amortization of an intangible from a prior acquisition.

Licensing revenue during the quarter was $188.2m, a 14% increase versus the first quarter of last year, and a 5% increase versus the previous quarter.  Product revenue in the quarter was $46m, down slightly from $47.7m a year ago, but up 14% versus the previous quarter.  The overall gross margin for the quarter was 88%. 

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2011 Forecast Lowered

Dolby revised its guidance for the year saying it is now targeting fiscal 2011 revenue in the range of $930m to $970m.  Last quarter the company said it expected fiscal 2011 revenue to be in the range of $950m to $990m with total gross margin of approximately 88 percent on a GAAP basis. Company president and CEO Kevin Yeaman attributed the lowered forecast to a slowdown in the PC market.

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You can read the full Dolby Q1 earnings release here.

A write-up of Dolby’s results from the previous quarter is here.

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RealD Losses Widen to $16.6m as Q3 Revenue Jumps 91%

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 03 2011

RealD, a global licensor of 3D technologies, announced that its revenue for the third quarter of its fiscal year was $57.8m, an increase of 91% versus the same period a year ago, but down 11% from the previous quarter.

The company posted a net loss $16.6m during the quarter on a GAAP basis, compared to a GAAP net loss of $15.1m during the same period a year ago, and a GAAP net loss of $5.1m during the previous quarter.  However, the company said that on a non-GAAP basis, it achieved adjusted EBITDA of $16.9 million, an increase of 213% versus the same period a year ago, and up slightly from the adjusted EBITDA of $16.5m posted last quarter.

Along with the jump in revenue, RealD’s costs increased significantly during the quarter.  The company’s cost of revenue increased 63% to $51.6m, and its operating expenses more than doubled to $20.8m.

RealD continues to post impressive expansion numbers. During the quarter it deployed approximately 2,000 3D-enabled screens, bringing its total 3-D screen deployment to 11,300.  On a geographic basis, the company said it has deployed 6,900 domestic (United States and Canada) screens and 4,400 international screens. 

These updated screen deployment numbers represent an increase of 163% versus last year, and an increase of 22% versus the previous quarter.

Year to date, the company’s net revenue was $187.6 million, an increase of 99% versus the first nine months of the last fiscal year.   The company’s years to date operating expenses were $51.2m, an increase of 81% versus the first nine months of last year.

On a GAAP basis, RealD lost $16.8m during the first nine months of its fiscal year.  However the company said that on a non-GAAP basis (which excludes the impact of motion picture exhibitor option expense) it achieved net income of $17.3m, compared to a non-GAAP net loss $12.4m for the first nine months of its last fiscal year.  The company also said that its adjusted EBITDA (a non-GAAP measure) was $44.4m, compared to $11.5m for the first nine months of last year.

RealD said it ended the quarter with cash and cash equivalents of $35.5m.  During the quarter the company successfully completed a $200m secondary stock offering, but all proceeds went to company investors and insiders rather than the company itself. 

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You can read the full RealD Q3 earnings release here.

You can read information on RealD’s previous quarter (Q2) results here.

Information on the company’s $200m secondary stock offering is here.

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