European Slowdown Results in Lower Revenue and Profit for Orad in Q3 2012

Posted by Joe Zaller
Nov 19 2012

Graphics and media asset management (MAM) provider Orad reported that its revenue for the third quarter of 2012 was $8.8m, down 2.7% versus the same period a year ago, and down 14% versus the previous quarter.

Company CEO Avi Sharir said the company’s Q3 results were impacted by a slowdown in its markets, especially in Europe.

Net profit for the quarter was $122,000, down 85% versus last year, and down 81% versus last quarter.

Gross margins for the quarter were 67% versus 71% last year, and 69% last quarter.

Operating income for the third quarter was $11,000, down from $1.036m last year, and $919,000 last quarter.

Operating expenses for the quarter were $5.87m, up 9% versus last year.

R&D expense for the quarter was $1.4m, or 16% of total revenue, up 7% versus the same period a year ago, and flat versus the previous quarter.

Sales & marketing expenses were $3.57m, or 41% of total revenue in the quarter, up 17% versus the third quarter of 2011, and down 6% versus the previous quarter.

G&A expenses in the quarter were $897,000, or 10% of total revenue, down 12% from last year, and flat with the previous quarter.

The company ended the quarter with 261 employees, up from 251 last quarter; and $8.3m in cash, down from $13.1m last year, and $9.6m last quarter.

 

Year-to-date Revenue up 8.5 Percent

For the first nine months of 2012, Orad’s revenue was $27.9m, up 8.5% versus the first nine months of 2011. The company attributed the YTD revenue increase to new products and expansion into new geographic territories.

Net Profit for the first nine months of 2012 was $1.6m, down 30% versus the same period a year ago.

Gross Margins for the first nine months of 2012 were 68%, down from 70% for the same period a year ago.

Operating income for first nine months of 2012 was $1.621m, down 29% versus last year.

R&D expenses for the first nine months of 2012 was $4.22m, or 15% of total revenue, up 12% versus the same period a year ago.  Sales & marketing expenses for first nine months of 2012 were $10.487m, or 38% of total revenue, up 14% versus the same period last year. Year-to-date G&A expenses were $2.795m, or 10% of total revenue, essentially flat with last year.

 

Sharir said that the company’s revenue in the first nine months of 2012 grew by 8% versus the same period in 2011, but that revenue in the third quarter of 2012 was impacted by a slowdown in its main markets, especially in Europe.  This is a contrast to last quarter when the company said that weak macroeconomic environment in Europe, which accounts for approximately half of Orad’s revenue, had not impacted its results.

“We feel proud with the significant part that Orad took in the American elections, a project that demonstrates the company’s strength and status as a leading provider in its field. Orad was chosen to supply equipment and services to 4 leading broadcasting networks in the U.S. during and following the election period, and we are currently engaged in a number of processes for the purpose of selling equipment and services to leading media operators in the U.S.A., Europe and Asia,” said Sharir.

Sharir did not provide an update on the company’s continuing evaluation of registration its shares on the Tel Aviv Stock Exchange, which Orad disclosed earlier this year.

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Related Content:

Press Release: Orad Hi Tec Systems Ltd: Revenues in the first nine months of 2012

Previous Quarter: Revenue Up, Profit Down at Orad in Q2 2012

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