Archive for July, 2011

Harmonic Q2 Revenues Falls Short of Estimates

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 28 2011

Harmonic announced that its net revenue for the second quarter of 2011 was $134m, up from $95.5m in the second quarter of 2010. Including the contribution from Omenon, which was acquired in September 2011, the company’s revenue was up 5% versus the same period a year ago.

GAAP net income for the quarter was $400,000, compared to net income of $4.4m for the second quarter of 2010. Non-GAAP net income for the quarter was $10.5m, compared to non-GAAP income of $9.1m for the same period of 2010

The results were below both the consensus of equity analysts, who were expecting revenue of $139.4m, and Harmonic’s own previously issued earnings guidance of $137m-$141m.  The company attributed the revenue shortfall to lower than expected sales into the US cable TV segment, the timing of revenue on large encoding projects in the US market, revenue recognition, and an unfavorable margin mix.

On the company’s earnings conference call with equity analysts, Harmonic CEO Patrick Harshman directly addressed the revenue shortfall, saying: “I want to be clear that we’re not satisfied with the financial results of this quarter. Having said that though the delta between our previous guidance and the final result is modest, and while our near-term outlook has been affected by the marketplace issues, our strategic direction remains very much on track and our medium-to-longer-term growth outlook remains positive. I also want to be clear that once we confirmed we did not reach our revenue goals, we accelerated the process of determining and communicating to our revenue, earnings, and importantly updated outlook for the remainder of the year.”

On a GAAP basis, gross margins in the quarter were 46%, and GAAP operating margins were 1%, compared to 48% and 4%, respectively, for the same period of 2010. Non-GAAP gross margins were 51% and non-GAAP operating margins were 11% for the second quarter of 2011, compared to 51% and 13%, respectively, for the same period of 2010.

Revenue from Omneon product sales in the quarter were $25.5m, an increase of 15.6% versus the previous quarter, but down 4.3% when compared to the same period a year ago. Harmonic does not break out service revenue from the Omneon business, but CFO Carolyn Aver, in response to questions from analysts on the earnings conference call, indicated that Omneon’s service revenues were approximately 15% of product sales.

Harshman said that the Omneon integration has gone well overall, but he acknowledged progress has been slower expected with respect to both cross-training and cross-selling. Harshman said that the company has already realized some important sales synergies and that as a result the combined company’s revenue in the broadcast segment has increased significantly,  and that he expect to continue to additional progress in this area through the second half of the year.

International sales represented 59% of revenue during the quarter, up 26% year-over-year on a pro forma basis. However, sales in the domestic market business declined 15% versus the same period a year ago.

 

1H 2011 Performance:

For the first six months of 2011, net revenue was $266.8, up from $180.4 million in the same period of 2010. GAAP net income for the first half of 2011 was $0.9m, compared to $9.8m, for the same period of 2010. Non-GAAP netcome for the first half of 2011 was $20.7m, compared to $15mfor the same period of 2010.

 

Updated Guidance:

Aver provided update revenue guidance, saying that while Harmonic “is very positive on mid-to-long-term opportunities, the short-term domestic market issues cause us to be more cautious for the remainder of the year. At this time, we expect revenue for the full year to be in the $540m to $550m range. We expect gross margin to be in the 50% to 52% range with the product and geographic mix continuing again to influence whether we’re on the high or low end of the range for gross margins. We expect expense management as well as seasonality to deliver a sequentially lower operating expenses in Q4 by as much as a couple of million dollars. We do continue to target a 14% to 16% annual operating margin goal. Although, given the Q2 results, we won’t achieve that goal for 2011.”

 

Related Content:

Press Release: Harmonic Announces Second Quarter 2011 Results

Harmonic Q2 2011 Earnings Call Transcript

Harmonic Q2 2011 Earnings Call Transcript

Press Release: Harmonic Announces First Quarter 2011 Results

 

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Avid Announces Disappointing Q2 Results

broadcast technology market research, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 28 2011

Avid announced that its revenue for the first quarter of 2011 was $161.3m, a decrease of 1% versus the same period a year ago, and a decrease of 3% compared to the previous quarter.

The company posted a GAAP net loss of $11.9m for the quarter, versus a GAAP loss of $12.9m during the same period a year ago, and a GAAP net loss of $15.5m last quarter. On a non-GAAP basis, the net loss for the quarter was $3.9m, compared to a non-GAAP net loss of $2m during the same period a year ago.

The weak results, which the company attributed to softness in the European market, were below the $170.4m consensus expectation of equity analysts.  As a result, the stock sold off, dropping nearly 25% the day after the results were issued.

 

Highlights for the second quarter:

  • Video revenue in the quarter was $96.3m, an increase of 3% versus the same period a year ago, and an increase of 2% versus the previous quarter.  Video revenue accounted for 60% of the total revenue during the quarter, versus 57% last quarter.

 

  • Audio revenue in the quarter was $65.1m, down 5% versus the same period a year ago, and down 9% versus the previous quarter.

 

  • Revenue  from products was $129.2m, a decrease of 4% versus the same period a year  ago, and down 6% versus the previous quarter.  Product revenue accounted for 80% of the total revenue during the quarter, versus 82.5% last quarter.

 

  • Service revenue in the quarter was $32.2m, an increase of 15% versus last year, and down 10% versus the previous quarter.

 

For the first six months of 2011, Avid’s revenue was $327.7m, an increase of 3% versus the first six months of 2010.  The GAAP net loss for the first six months of 2011 was $17m, compared to a GAAP net loss of $26.4 million for the same period in 2010.  On a non-GAAP basis, the company’s net loss for the first half of 2011 was $4.8m, compared to a non-GAAP net loss of was $6.6m for the first half of 2010.

 

“While Q2 was difficult, I believe our business is sound,” said Gary Greenfield, chairman and CEO at Avid. “Our customer focus is unwavering and I believe we’ll succeed by continuing to listen to them and responding with innovative, open tools to help video and audio professionals and enthusiasts around the world create great content they can distribute anywhere, anytime.”

 

Related Content:

Press Release: Avid Announces Results for Second Quarter of 2011

Q1 2011 Results: Avid Reports 5th Consecutive Quarter of Year-on-Year Revenue Growth

Press Release: Avid Announces Results for Second Quarter of 2010

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More Broadcast Vendor M&A: Haivision Acquires KulaByte and MontiVision; Forms Internet Media Division

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Jul 21 2011

IP video distribution provider Haivision announced that it has acquired two companies –KulaByte Corporation of San Marcos, Texas, and MontiVision Imaging Technologies based in Germany.

Terms were not disclosed.

Haivision says that with the addition of KulaByte and MontiVision that it expects “to surpass revenues of $50 million next year.”

The technologies acquired in these transactions, which include encoding, transcoding, cloud computing, and workflow solutions, to form a new “Internet Media Division” within Haivision, which will be focused on developing technologies to deliver OTT media and to power enterprise social media networks.

Haivision named Chafye Nemri EVP of this new division and KulaByte’s CEO Peter Forman as Vice President of Internet Media,  responsible for developing the division’s cloud services.

KulaByte is a provider of live software-based encoding and transcoding technologies. Its cloud-based HyperStream product is designed to convert video sources into a variety of formats and data rates required to distribute live video via the Internet to multiple viewing platforms.

MontiVision, a partner in the creation development of KulaByte products, is a development company focused on delivering technologies for video acquisition, machine vision, surveillance, and medical imaging applications.

 

Related Content:

Press Release: Haivision Acquires KulaByte and MontiVision; Forms Internet Media Division

 

 

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More Broadcast Vendor M&A: Orad Buys 63 Percent of MAM Specialist IBIS for $2.11m

Broadcast Vendor M&A | Posted by Joe Zaller
Jul 20 2011

Graphics and virtual set specialist Orad announced that it will acquire 63.38% of Integrated Broadcast Information Systems Limited, (IBIS), a provider of Broadcast Media Asset Management (MAM) solutions, for $2.11m in cash.  Orad also has the option to increase its holdings to 100% within the next 54 months at a price dependent on the future revenues and net profits. Completion of the transaction is expected within the next 3 months.

IBIS, which specializes MAM for fast turn-around file based workflows in news and sports environments, has customers including ESPN Star Sports, the BBC and the Irish Parliament, Dublin.

Avi Sharir President and CEO of Orad commented “we are extremely happy with the acquisition of IBIS. We see many synergies between  IBIS’s portfolio and Orad’s graphics and video server range of solutions. The integrated solution between Orad and IBIS will further enhance Orad’s position in the sport and news market segments, offering our customers significant added value”

 

Related Content:

Press Release:  Orad enhances its sports solutions with an investment for 63% of the fast turnaround MAM vendor – IBIS

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Barco Revenue Jumps 33 Percent in 1H 2011, But Says Digital Cinema Growth Is Slowing

broadcast technology market research, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 20 2011

Barco said that its revenue for the first half of 2011 was 490.3 million euro, a 33.1% year-on-year increase. There was growth in all divisions except for the Defense & Aerospace division. The highest growth was realized by the Entertainment and the Control Rooms & Simulation divisions. The top line of the Healthcare division and the Ventures increased with high single digit figures compared to the same period the year before.

Sales to Europe, Middle East, Africa and Latin America (EMEALA) represented 43% of consolidated sales, while 34% of sales were realized in North America and 23% in Asia Pacific. Compared to 1H10 sales were up 30.4% in absolute numbers in the EMEALA region, while they grew respectively with 34.8% and 36.1% in North America and the APAC region.

Order intake in 1H11 was 560.4 million euro. Compared to the same period the year before this is an increase of 8.8%, carried by the  Entertainment and the Healthcare divisions.

In order intake the APAC region realized 29% of total, compared to 34% for North America and 37% for the EMEALA region. The latter region had a decline of 9.2% in orders, while orders in North America and in the APAC region increased with 12.4% and 38.9% respectively.

 

Outlook:

Commenting on the remainder of 2011, the company said: “Although Barco’s progress has recently been carried predominantly by the growth momentum in the Entertainment and Healthcare divisions, management believes that all other divisions are well on the way to realize their corporate objectives. Even though growth in digital cinema will begin to level off in coming quarters, Barco’s progress is sustainable.  Barring any unexpected macro-economic turmoil 2011 will be a good year for Barco.”

 

Related Content:

Press Release:  Barco announced results for the six month period ended 30 June, 2011

Barco 1H 2011 earnings conference call investor presentation

More Broadcast Vendor M&A: EVS Sells XDC CineStore Digital Cinema Technology to Barco

Information about Barco’s Q4 and full year 2010 results is here.

 

 

 

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Kit Digital Says it Expects Report Record Revenues for Q2 2011

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 19 2011

KIT announced that it expects to report record revenues when it announces it full Q2 2011 results on August 9th, 2011.

Based on preliminary unaudited information, the company says it had Q2 revenue of approximately $48m, an increase of 39% versus the previous quarter and an increase of 108% versus the same period a year ago. The company said the increase in revenue is attributed to both organic growth and the contribution of newly acquired companies.

The company says it expects to book a net loss for the quarter on a GAAP basis, and that it will take a charge of approximately $10m charge for restructuring and integration.

Operating EBITDA, a non-GAAP metric which management uses as a proxy for operating cash-flow, is expected to total approximately $9.5m, up 34% from the previous quarter and up 125% from the second quarter of 2010.

The company said it added more than 35 net new clients during the quarter, with an average revenue per month per customer (ARPU) of
more than $30,000, which is consistent with the company’s ongoing focus on higher-end opportunities in the market and large, multi-year contracts in emerging sectors and geographies. The company’s client base totaled more than 2,300 customers at June 30, 2011.

Company management reiterates its guidance of approximately $210m in reported revenues for the full year of 2011, which would represent an increase over 2010 of more than 95% overall and between 30% and 35% organically.

The reaffirmed  its expectation of a 23% EBITDA margin for the full year of 2011, with a medium-term goal of approaching a 30% EBITDA margin over the next two years. The company also reiterates it expects to be generating approximately $2.5m in monthly free cash-flow by the end of Q4 2011.

Company chairman and CEO Kaleil Isaza Tuzman said “We are seeing growth in our business accelerating going into the back half of
2011, despite the necessary distractions of M&A integration during the past quarter and our business being a ‘larger ship’ than before. We are confident we will achieve the financial targets and product release schedule that we have set out for ourselves this year, and we are poised for a strong 2012.”

 

Related Content:

Press Release:  KIT digital Expects Q2 2011 Revenue Up 39% to Record $48 Million; Op. EBITDA Up 34% to Record $9.5 Million

KIT digital Revenues Jump 98% in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says larger Acquisition is Coming

 

 

 

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Losses Continue at Wegener in Q3 2011

broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Jul 18 2011

Wegener Corporation announced final operating results for the third quarter of fiscal 2011, which ended June 3, 2011. The company posted a net loss of $503,000 on revenue of $2.2m for the quarter, compared to revenues of $2.1m and a net loss of $487,000 for the same period in fiscal 2010.

For the nine months ended June 3, 2011, Wegener lost $1.5m on revenue of $6.6m, compared to a lost of $2m on revenue of $6.3m for the same period last year.

The company said its 18 month order backlog at the end of the quarter was approximately $5.2m, down from $6.5m last year.

“Our bookings performance through the third quarter has been disappointing and we expect an operating loss for the fourth quarter of this fiscal year,” said company president and CEO Troy Woodbury. “Several key orders did not solidify in fiscal 2011, but we have continued to aggressively pursue them. We are optimistic that those orders will book in coming quarters. Our third quarter bookings, revenues, and operating results were a significant improvement over the second quarter of this year. That improvement, and the  continued progress we are making on the domestic and international opportunities before us, are very encouraging as we continue our efforts to improve Wegener’s performance.”

 

Related Content:

Wegener Press Release: Wegener Corporation Reports Final Results For Third Quarter Fiscal Year 2011

Wegener Q3 2011 earnings conference call transcript

Q2 Results: Wegener Losses Widen, CEO Disappointed

Previous Year Results

 

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Ranking Broadcast Technology Vendors Part 1 – the 2011 BBS Overall Brand Opinion League Table

broadcast technology market research, Broadcast Vendor Brand Research, market research, Top Broadcast Vendor Brands | Posted by Joe Zaller
Jul 14 2011

This is the fourth in a series of articles about some of the findings from the 2011 Big Broadcast Survey (BBS), a global study of broadcast industry trends, technology purchasing plans, and benchmarking of broadcast technology vendor brands.  More than 8,000 people in 100+ countries took part in the 2011 BBS, making it the largest and most comprehensive market study ever done in the broadcast industry.

 

Each year, as part of the Big Broadcast Survey (BBS), we ask a global sample of  broadcast professionals to rank a variety of technology vendor brands on a wide range of metrics.  We use this information to create a series of reports, which through benchmarking and industry “league tables” enable each vendors to understand its position in the market relative to their the industry as a whole as well as their direct competitors.

This post looks at how our global sample of broadcast professionals ranked 118 different broadcast technology vendors in terms of their overall opinion of these vendors (to see a list of the brands covered in this study, please click here).

Respondents were asked to rank their opinion of broadcast technology vendor brands on a scale of 1-10 — with 10 being best in the market, and 1 being worst in the market.

The top 30 ranked brands for overall opinion are shown below for both the global sample of all respondents as well as for all respondents in each of the geographic regions.

Results are shown in two ways:

  • An overall industry “league table” that shows the 30 highest ranked vendors for the metric “overall opinion.”  The data in this chart is broken out globally and regionally.

 

  • An analysis of the “frequency” of appearance in the “overall opinion league table”

 

The top 30 ranked brands for overall opinion are shown below for both the global sample of all respondents as well as for all respondents in each of the geographic regions.

Please note that in all cases, these results are shown in alphabetical order, NOT in the order in which they were ranked by respondents to the survey.      

 

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2011 BBS Overall Brand Opinion League Table

 

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A total of 43 broadcast technology vendor brands are included in this table, illustrating the geographic variation of opinion.

In terms of frequency of appearance in this table:

 

  • 19 brands appear four times, meaning they were ranked in the top 30 globally and in each geographic region

 

  • 9 brands appear three times

 

  • 2 brands appear two times

 

  • 13 brands appear one time which demonstrates that some brands are strongest in one geographic area

 

 

Analysis of the data shows that are some clear market leaders on a global basis, while others are strong on a regional basis.

A breakdown of how many times each company appears in the ranking shows how many times each brand appears in the chart above.

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Brands appearing four times in the 2011 BBS Overall Brand Opinion League Table: 

  • Adobe, AKG, Apple, beyerdynamic, Canon, Cisco, Dolby, Fujinon, Genelec, Grass Valley, Neumann, Panasonic, Schoeps, Sennheiser, Shure, Solid State Logic (SSL), Sony, Tektronix, Yamaha

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Brands appearing three times in the 2011 BBS Overall Brand Opinion League Table: 

  • Aja Video, Avid, Blackmagic Design, Clear-Com, JBL, Rohde & Schwarz, Snell, Studer, Wohler

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Brands appearing two times in the 2011 BBS Overall Brand Opinion League Table:

  • Audio-Technica, RTS Intercom Systems

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Brands appearing once in the 2011 BBS Overall Brand Opinion League Table:

  • Electro Voice, Evertz, EVS, Harris, Ikegami, Lawo, Mackie, Omneon, Quantel, Riedel, RTW, Telex, Barco

 

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Frequency Analysis of the Brands in the in the 2011 BBS Overall Brand Opinion League Table:  

In order to provide a better understanding of which brands were most highly ranked in each geography, the data has been provided in  the table below, which shows the global and regional performance for each brand in the top 30 ranking of overall opinion.

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Frequency Analysis of Brands in the 2011 BBS Overall Brand Opinion League Table

The frequency chart shows some interesting geographic variation in the data.

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Appearing in the top 30 “overall opinion” ranking globally + one region

Two brands managed to achieve a top 30 ranking in the global overall opinion league table, despite being in the top 30 of only one of the
three geographic regions.

  • Audio-Technica (Asia Pacific), RTS Intercom Systems (Americas)

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Appearing in the top 30 “overall opinion” ranking in one region

The following 13 brands did not make the top 30 in the global league table of overall opinion, but they did appear in the top 30 overall opinion ranking in one of the geographic regions:

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Appearing in the top 30 “overall opinion” ranking only in EMEA

  • Barco, EVS, Lawo, Quantel, Riedel, RTW

 

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Appearing in the top 30 “overall opinion” ranking  only in Asia-Pacific

  • Omneon

 

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Appearing in the top 30 “overall opinion” ranking  only in the Americas

  • Electro-Voice, Evertz, Harris, Ikegami, Mackie, Telex

 

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Please keep in mind when reviewing this information that all data these charts are presented in alphabetical order, not in the order brands were ranked by respondents to the 2011 BBS.  Also, the charts in this posting measure the responses of all non-vendor participants in the 2011 BBS respondents, regardless of their company type, company size, geographic location, job title and budget for broadcast technology products.

In order to get full value from this data, it is necessary to evaluate these results on a granular basis.  If you would like more  information, please contact Devoncroft Partners.

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This article is based on the findings from the 2011 Big Broadcast Survey (BBS), a global study of industry trends, technology purchasing behavior and the opinion of vendor brands.  With more than 8,000 people in 100+ countries participating, the 2011 BBS is the largest and most comprehensive market study ever done in the broadcast industry.

Devoncroft Partners has published a variety of reports from 2011 BBS data.  For more information, please get in touch.

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Pilat Media Sued by Fox Television Stations, Files Counter Claim for Breach of Contract

Uncategorized | Posted by Joe Zaller
Jul 13 2011

Pilat Media said that it was informed last month by Fox Television Stations Inc (“FTS”) that FTS wishes to discontinue use of Pilat Media’s IBMS system from 30 September 2011.

Pilat also said at that time that FTS had issued proceedings against Pilat Media claiming damages of an unspecified amount in connection with alleged breaches of contract by Pilat Media.

At the time, Pilat said that FTS’s notification came with no prior warning, and that its board of directors regards FTS’ claims as being wholly without merit.

Today, Pilat announced that in response to the legal actions taken last month by FTS, it has as brought a removal action and counterclaim for breach of contract against FTS in the U.S. Federal Court in New York seeking an injunction and damages to be determined by that Court.

Pilat Media said that for the year ended 31 December 2010 Fox TV Stations represented approximately 3%, or just over $1m, of Pilat Media’s total revenue of $35m (£21.9m).  Pilat also said that FTS-related balances for accrued income (revenues recognized but not yet paid) on Pilat Media’s balance sheet amount to approximately US$4.6 million.

Pilat, which has more than 60 customers worldwide, said it has never before experienced a purported termination of an IBMS implementation project.

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Related Content:

Press Release: Pilat Media Couter Claim against Fox Television Stations

Press Release: Pilat Media Informed by Fox Television Stations of Breach of Contract Suit

Pilat Media Posts Small Loss for First Quarter of 2011

Press Release: Pilat Media Announces Results for the 12 Months Ended December 31 2010

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ViewCast Replaces CEO

Broadcast technology vendor financials | Posted by Joe Zaller
Jul 13 2011

n a move the company said will “better prepare it for a new era of commercial focus, execution and growth in its various markets,” Viewcast announced that Dave Stoner, the company’s CEO, has resigned from the company effective July 12, 2011 in order to pursue other interests.

Stoner will be replaced by John Hammock, who was promoted to president and COO; and George Platt, who was named executive chairman.

Hammock, who joined ViewCast in 2010 as vice president of sales, worked previously for Kasenna, Voxpath, and Corvis in a variety of sales-related roles.

Platt has been a director of the company since September 1999 and currently serves as Chairman of the Board. He  joined ViewCast as Chief Executive Officer and President in September 1999, retiring from the CEO position July 2008. Prior to ViewCast, from 1991 through 1999, Platt was president and CEO of by Intecom, Inc., a Dallas-based provider of multimedia telecommunications products and
services.

“We are grateful for Dave Stoner’s many years of service to ViewCast and its shareholders,” said Platt. “His contributions to operations, product development and management have all been cornerstones of the Company’s success and its survival though a variety of economic and marketplace challenges. We wish him only the best in his future endeavors.”

 

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Related Content:

Press Release: ViewCast Announces Key Management Changes

You can learn more about ViewCast’s business and strategy here: ViewCast Corporate Presentation

ViewCast Reports Higher Losses in First Quarter of 2011

ViewCast Revenue Jumps 25 Percent in 2010, Posts Net Profit in Q4

ViewCast Reports 2010 First Quarter Results

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