UK-based Vislink plc, which owns broadcast industry brands Advent, Link, MRC Gigawave, and Pebble Beach, announced full year 2015 results. 2015 revenue was £57.8 million, a decline of 6.7% versus 2014 revenue.
The revenue decline was attributable to Vislink’s surveillance business, which completed a large one-time order in the first half of 2015.
Net income for 2015 was (£0.9) or (0.7p) per share, compared to net income of £3.7 or 3.2p per share in 2014.
2015 operating income was (£0.8) versus operating income of £5.5 during 2014. It is important to note management capitalizes a portion of R&D expense, which is therefore not reflected in the current period’s operating expenses and instead amortized over future periods.
R&D expenses recognized in 2015 were £5.8, a 3.6% increase over 2014. As a percentage of revenue, R&D expense was 10%, a slight increase from the 9% in 2014. The increase was attributable to the addition of a full 12 months of Pebble Beach (acquired in March of 2014).
Sales and marketing (S&M) expenses were £9.4, a rise of 6.8% against 2014 S&M. On a percentage of revenue basis S&M was 16.3%, an increase over the 14.2% of revenue from 2014.
Administrative expenses were £6.1, a decrease of 10% versus 2014 levels. The decrease in administrative expenses was the result of a restructuring of the Vislink Communications Systems division.
Headcount for the Communications System division decreased from 250 at the end of 2014 to 185 at the end of 2015 – a 26% decline for the year. The Company incurred a charge of £2.5 related to the restructuring.
In contrast, the headcount of Vislink’s Pebble Beach increased from 63 at the start of the year to 75 at the end of the year.
Vislink ended 2015 with a cash balance of £3.3, down from £8.4 at the end of 2014.
Vislink’s broadcast revenue for the 2015 year was £50.2, a 9% increase versus broadcast revenue in 2014. The gain was primarily related to the inclusion a full 12 months of Pebble Beach.
Pebble Beach revenue for 2015 was £10.9 million. Vislink acquired Pebble Beach in March of the 2014, so year-over-year comparisons are not appropriate. During the earning release, management highlighted a $2.0 million (USD) order received from Scripps Group in 2015.
Broadcast revenue for Vislink’s Communications Systems division was £39.3 million for 2015, an increase of 4% over the prior year.
Broadcast Regional Performance:
The table below from Vislink’s earning release shows a complete breakdown of the Company’s broadcast revenue by geographic region.
In a December 8, 2015 press release Vislink had alluded to an upcoming acquisition, stating “the Company is in advanced discussions with a small bolt-on acquisition, which would provide software to broadcasters and be highly complementary to Pebble Beach Systems’ existing broadcast solutions.” There was no acquisition announcement as part of Vislink’s release.
Within the earnings release, management cited recent product releases positioning Vislink to benefit from technology transitions related to IP and virtualized software.
Executive Chairman of Vislink, John Hawkins said “We continue to transition to a software and services business represented by the evolving profit mix within the business. Pebble Beach Systems has had a strong financial performance in 2015 as it continues to expand its sales activities through its key partnerships and increasing geographic presence. In its core broadcast markets Vislink Communication Systems found market conditions in 2015 challenging and they are expected to remain variable in 2016. However, the significant restructuring of Vislink Communication Systems, coupled with the investment and launch of new products and an increasing order pipeline, provides an encouraging platform for improved results from Vislink Communication Systems.”
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