Pilat Media Posts Loss in Q3 2012 as Revenues Decline 3 Percent, Says Q4 Will be “Strong and Profitable”

Posted by Joe Zaller
Dec 06 2012

Broadcast business management solutions provider Pilat Media announced that its revenue for the third quarter of 2012 was £5.32m, down 3.6% versus the same period a year ago, and down 2% versus the previous quarter. The company said the lower results were in line with its expectations and is due to the fact that much of its resources during the quarter we focused on upgrading clients to its newest generation system rather than generating new business.

Q3 revenue included £568,000 of licensing revenue for sales to both new and existing clients.  This is an increase of 14% versus the same period a year ago, and a decline of 18% versus the previous quarter.   Revenue from implementation services in Q3 was £3.4m, down 4% versus last year and essentially flat with the previous quarter.

On a geographic basis, the company’s revenue for the quarter was split out as follows:

UK:

13.4%

USA:

18.6%

Canada:

19.0%

Australia:

14.5%

Other:

34.5%

 

The net loss for the quarter was £59,000, compared to a net profit of £306,000 last year.  Operating profit in the quarter was £90,000, down from £240,000 last year.

Recurring maintenance and support fees from live clients was £1.35m down 9% versus last year. The company attributed the decline in maintenance income to the termination of its contract with FOX Television Stations Inc. In Q1 of this year, Pilat said it expects its maintenance revenues to increase in 2013, after the current projects it is implementing go live at customer sites.

Gross margins in the quarter were 48.9% versus 49.4% last year, and 49.2% last quarter.  The company attributed its declining margins to it ongoing upgrade projects at various customers, and said that its revenue mix will improve in Q4 driving higher margins in the quarter and helping the company’s margins for the full year 2012 to be on par with 2011.

R&D costs in the quarter were £1.01m, up 45% versus the same period a year ago, and up 30% versus last quarter.  The company said it is now spending “significantly: more on R&D as it invests in the development of its investment into the new IBMS:Rights and IBMS:Adapt modules.

General and administrative costs in the quarter were £1,06m down 38% versus last year and down 2% versus the previous quarter.  The company said the lower year-over-year G&A costs reflect its continuing efforts to reduce administrative overheads despite increasing the numbers of development and revenue generating staff.

Year-to-date Results:

Revenue for the first nine months of 2012 was £15.78m, down 4% versus the same period in 2012. There were two “material customers” during the period who accounted for more than 5% of revenue – one at 11.7% (£1.85m), and one at 5.3% (£836,000).

On a geographic basis, the company’s year-to-date revenue was split out as follows:

UK: 9.6%
USA: 22.2%
Canada: 19.3%
Australia: 16.6%
Other: 34.3%

 

The loss for the first nine months of 2012 was £133,000, and improvement on the loss of £1.325m for the first nine months of 2012.  The YTD operating profit was £680,000, down from an operating profit of £1.29m last year.

 

Outlook:

Pilat says that it expects to complete the license renewal negotiations with a number of its existing clients within “the next few weeks,” which it says will generate license fees in Q4 making it a strong and profitable quarter.

Company chairman Michael Rosenberg said: “The pipeline of new sales opportunities continues to include significant prospects that can convert in the next few months. The Board hopes the increased investment in expanding Pilat Media’s offering, with the Rights and Adapt modules, IBMS-Express and OTTilus will help in generating additional prospects and revenues in the Group’s existing market and in new ones the Company can now approach, leveraging its strong position. As the cash balance continues to increase the Company will intensify its search for ways to utilize cash to build value for the shareholders.”

 

 

Related Content

Press Release: Pilat Media — Results for the nine months ended 30 September 2012

Previous Quarter: Pilat Media Revenue Declines 7 Percent in Q2 2012

Previous Year: Pilat Media Announce Q3 2011 Results, Says Dispute With Fox Has Been Settled

Pilat Media and Fox Television Stations Settle Legal Dispute

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