Archive for the ‘Quarterly Results’ Category

Broadcast Vendor M&A: Kudelski Buys Rival Conditional Access Vendor Conax for $226 Million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 27 2014

Swiss-based Kudelski said it will pay $226m to acquire rival conditional access provider, Conax AS, from Telenor Broadcast Holding AS.

This deal values Conax at approximately 2.2X revenue and 5.6X EBITDA.

In 2013 Conax had revenue of $103.7m, and EBITDA of $40.2m. In 2012 Conax had revenue of $96.1m and net income of $22.8m.

Kudelski, through its subsidiary Nagra, is one of the industry’s leading conditional access providers.  The company also owns pay TV middleware provider OpenTV, which it acquired from Liberty Media.

Buying Conax gives Kudelski another 380 customers in 85 countries, who between them serve approximately 140 million pay-tv consumers through a product portfolio encompassing both traditional broadcast products and complete solutions for multi-screen TV distribution.

André Kudelski, CEO of the eponymous company, says the addition of Conax will enable Kudelski to “further expand our customer portfolio in Asia, Latin America, Eastern Europe and Scandinavia.”

The deal will also help bolster Kudeslski’s pay TV revenue, which has been in decline.

In 2013 Kudelski reported pay TV-related revenue of $695m, down 4.4% versus 2012, including a year-on-year decline of 7.7% in Europe. In its 2013 annual report, Kudelski said that it expects weak fundamentals in Europe to continue to affect volumes in its core digital TV market.   Thus the addition of Conax makes sense for Kudelski.

The deal also makes sense for Telenor, which says that despite “a strong track record of international growth and high profitability, achieving global scale and enhancing market share will be key determinants of future success” in the highly competitive conditional access business.  Therefore Telenor has decided “the best way forward for Conax is with a new owner.”

Telenor says selling Conax “marks an important step for Telenor Broadcast in pursuing its stated strategy of focusing on its core activities within the Telenor Group.” One of Telenor’s core businesses, Canal Digital, will remain a Conax/Kudelski customer after the transaction.

The transaction is expected to close within 10 days.

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Related Content:

Press Release: Kudelski Group to Acquire Conax

Press Release: Telenor Broadcast divests Conax to Kudelski Group for NOK 1.5 billion

Press Release: Kudelski Group 2013 Annual Results

Kudelski 2013 Annual Report

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 19 2014

Vislink announced that it has acquired playout automation specialist Pebble Beach Systems for $24.7m (£14.9m). Pebble Beach will operate as a stand-alone unit within Vislink, and will continue to be run by its management, including founder Peter Hajittofi.

Under the terms of the deal, Vislink will pay £12.9m in cash, and £2m in newly issued Vislink shares.  Pebble Beach management must hold the new shares for at least two years. Vislink says the “transaction will be immediately earnings enhancing.”

For the fiscal year ended June 20, 2013, Pebble Beach had revenue of £5.64m, EBITDA of £1.3m, and profit before tax of £1.3m.  Thus the deal values the company at approximately 2.5x revenue, and 11.4x EBITDA. After backing out the £5.9m in cash Pebble Beach had in the bank, the net price paid by Vislink was £9m, valuing the deal at approximately 1.6x revenue and  7x EBITDA.

The fact that Vislink has made an acquisition is not surprising.

The company, which had revenue of £28m for the first half of 2013, has told the market for the past several years that it intends to grow its revenue to £80m, with 10% return on sales, by the end of 2014.  

Vislink, which recently moved its listing to the UK AIM market, has long-telegraphed telegraphed its intention to buy companies to achieve its stated goals for revenue growth and profitability.

In its most recent half-yearly results, company management said “we remain on track to grow the business to achieve turnover of £80m and £8m adjusted operating profit by the end of FY2014, and we intend to support this by a number of bolt on acquisitions in addition to achieving organic growth.”

However, it is interesting to note that Vislink decided to buy a  company in a different part of the broadcast value chain to help it achieve its stated intentions.

Vislink, which owns the Advent, Gigawave, Link, MRC, and PMR brands, is best known for its RF, microwave, and satellite communication products that are used by broadcasters in live production environments such as news and sports.

Pebble Beach products are used in broadcast playout applications, which does not have the same emphasis on live events.

Having said that, Vislink says that the Pebble Beach team will “assist Vislink in expanding its software capability as a Group,” so the acquisition could be the first of several deals that mark the beginning of a new business focus at Vislink.

Vislink explained the rationale for the deal saying Pebble Beach’s technology is complementary to its own, and that “the acquisition of Pebble Beach will move Vislink into the provision of software solutions for playout with advanced software technology,” and that “Vislink will now be able to offer broadcasters a complete ‘scene to screen’ solution.”  Vislink also highlighted the fact that Pebble Beach “will gain from access to significantly increased sales channels through the global network of over 900 broadcasters that Vislink works with as well as its international network of offices.”

“The acquisition fits perfectly into our long term strategy of acquiring software and services capability that we hope to drive recurring revenues for the group,” said Vislink chairman John Hawkins.

UK-based Pebble Beach has 60 employees, and regional offices in Dubai, Singapore, and the USA.

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Related Content:

Press Release: Vislink Acquires Pebble Beach

Broadcast Vendor M&A: Vislink Buys Amplifier Technology for up to $6.2 Million

Vislink Revenue Declines 7 Percent in Q3 2012, Reaffirms Plan to Double Revenue By End of 2014

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Evertz Q3 FY 2014 Revenue Jumps 30 Percent on Big Deals in North America

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 11 2014

Evertz announced that its revenue for the third quarter of its 2014 fiscal year was C$93.2m, up 30% versus the same period a year ago, and up 14.6% versus the previous quarter.

Net earnings for the quarter were C$21.3m (C$0.29 per share), up 61.3% versus the same quarter last year, and up 38% versus the previous quarter. The company generated C$24.4m cash from operations in the quarter, up from C$22m, last year, and C$9.7m last quarter.

The results (which were the second highest sales quarter in the history of the company), were well above the consensus estimates of equity analysts who were looking for revenue of $C80m and earnings of C$0.21 per share.

Evertz EVP Brian Campbell attributed the higher than expected results to improvements in the US/Canada market, the ongoing worldwide transition to HDTV, and strong customer demand for its new products.

Revenue in the US/Canada region was C$55m, up 63% versus the same period a year ago, and up 44.3% versus the previous quarter. US/Canada sales were 59% of total revenue during the quarter, up from 47% of revenue during the same period a year ago, and 47% of revenue last quarter.

International revenue was C$38.2m, essentially flat with last year, and down 11.4% versus the previous quarter. International sales were 41% of total revenue, down from 53% last year and last quarter.

The top ten customers in the quarter accounted for 38% of revenue (C$27.8m), and the largest customer in the quarter accounted for 12% of revenue (C$11.2m). Altogether Evertz had 78 orders in the quarter that were greater than C$200,000 (up from 57 last year, and 68 last quarter).

Unusually for Evertz, which is notoriously tight-lipped about corporate activity and customer wins, Cambell disclosed that the company had shipped a total of C$15m worth of product to two separate customers in the quarter, and specifically mentioned that these orders included the company’s new EXE routing switcher platform and Dreamcatcher video replay system.  Campbell declined to identify the customers by name, saying only that Dreamcatcher had been adopted by a “major sports league” and that the EXE platform had been adopted by “a major sports network.” However, an Evertz executive speaking on the “Professional Networked Media” panel at last month’s HPA Tech Retreat in Indian Wells, California, told the audience that the EXE-VSR router has been deployed by ESPN as part of its new D2 project.

Gross margins in the quarter were 57.6%, up from 56.1% last year and up from 57.4% last quarter. Evertz executives said that the gross margin performance in the quarter were within the company’s target range of 56% to 60%.  This prompted equity analysts on the earnings call to ask, for the second quarter in a row, why the company’s gross margins were not increasing more rapidly given the large percentage increases in quarterly sales.

Campbell attributed the gross margin performance to two factors. Because the company’s top-line growth in the quarter was driven by to big deals, “gross margins were lower than what you may anticipate from increased volumes, because of the large size of the orders, often-times those customers require a volume discount.”   Campbell also said gross margins in the quarter were affected by the order mix.

R&D expenses in the second quarter were C$15.05m, an increase of 15% versus the same period last year, and up 3% versus the previous quarter.  R&D expenses were approximately 16.1% of revenue in the quarter, lower on a percentage basis than last year (18.2%) and last quarter (18%) due to higher revenue.

Selling and administrative expenses for the quarter were C$14.9m, an increase of 9.2% versus last year, and an increase of 9.1% versus the previous quarter. Selling and administrative expenses represented approximately 16.1% of revenue in the quarter versus 18.2% of revenue during the same period last year, and 16.8% of revenue last quarter.

The company said that its shipments in February 2014 were C$25m, and that its purchase order backlog at the end of the third quarter of fiscal 2014 was in excess of C$43m, unchanged from last quarter.

Campbell said that the backlog remained the same despite higher revenue in the quarter because of a large order, which the customer asked to be expedited. Thus it was received and turned into sales during in one quarter, rather than showing up in backlog.

The company ended the quarter with $118.8m of cash and short term investments down from C$208.2 at the end of last quarter, a difference of C$89.4m.  The primary reason for this was the payment of dividends of C$115.8, including a special dividend of $C104m.

Evertz said it expects its annual revenues will continue to outpace the industry growth, and that its gross margin percentages may vary depending on the mix of products sold, the company’s success in winning more complete projects, utilization of manufacturing capacity and the competitiveness of the pricing environment. R&D will continue to be a key focus as the Company invests in new product development.

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Related Content:

Press Release: Evertz Technologies Third Quarter Fiscal 2014 Revenue Up 30%

Previous Year: Evertz Q3 FY 2013 Revenue Flat With Last Year, Down 14 Percent Versus Last Quarter

Evertz Revenue Declines 33 Percent in Q1 Fiscal 2014

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Avid to be Delisted from NASDAQ on February 25, 2014

Broadcast technology vendor financials, Quarterly Results, SEC Filings | Posted by Joe Zaller
Feb 24 2014

Avid said in a regulatory filing that, as expected, the company has received a notification letter from NASDAQ indicating that the NASDAQ Listing Qualifications Hearings Panel has determined to delist Avid’s shares from The NASDAQ Stock Market.

This follows on from the company’s announcement in January 2014 that it was unlikely to regain compliance with its SEC filing requirements for continued listing of its common stock on the NASDAQ Stock Market by the previously reported March 14, 2014 deadline set by the NASDAQ Hearings Panel.

As a result, Avid will cease trading on the NASDAQ effective at the open of business on Tuesday, February 25, 2014.

It should be noted that Avid’s delisting by NASDAQ has nothing to do with the company’s current performance.

At issue is the historic accounting treatment the company applied for certain software upgrades, dating back to 2009, which were made available to certain of its customers at no-charge. Avid management said in August 2013 that it has now determined that these upgrades should have been accounted for as “implied post-contract customer support” under US GAAP accounting rules.

Because of this, the company has not filed financial results, made required regulatory filings (e.g. annual 10-K report), or held an annual meeting of shareholders, as required by the listing rules of the NASDAQ market.

To rectify this situation, Avid has, since February 2013, been conducting an internal forensic investigation into the way it historically accounted for these updates. Last year, the company said that, as a result of this review, it had determined that its financial statements from 2009 – 2011 are no longer reliable, and must be restated “because of errors in the application of US GAAP.”

The problem is that Avid has had a lot of transactions over the years, and each one must be reviewed. Last month, the company said it had made significant progress toward completion of the restatement, including evaluating transactions over an eight-and-a-half year period, encompassing a review of approximately 5 million transaction lines and 700 software releases.

Not only is this a time-consuming process, it’s also expensive. Last month, Avid said its cash expenditures in 2014 related to the ongoing accounting evaluation through completion of the evaluation will amount to approximately $25 million to $34 million.

When this process has been completed, Avid will restate its financial results the fiscal years ended December 31, 2011, 2010 and 2009 and for the quarterly periods ended March 31, 2012 and 2011, June 30, 2012 and 2011, and September 30, 2012 and 2011.

Avid says it intends to complete the restatement and regain compliance with its SEC filing requirements as soon as practical, and is targeting is “targeting mid 2014 for completion of the restatement.”

The company said that as soon as its accounting investigation has been completed and the restatement of its financials has been completed, that intends to “apply for prompt relisting on the NASDAQ Stock Market as early as possible after regaining compliance with the listing requirements.”

In the meanwhile, following its suspension from NASDAQ on February 25, 2014, Avid’s common stock will begin trading on the OTC Markets – OTC Pink Tier under the trading symbol AVID.

Last month, Avid appointed Deloitte & Touche LLP as its new auditor firm to succeed Ernst & Young LLP. According to the company “the decision to change auditors was not the result of any disagreement between the Company and Ernst & Young LLP on any matter of accounting principle or practice, financial statement disclosures, or auditing scope or procedure.”

Avid’s cash balance on December 31, 2013 was approximately $48 million and it had no debt or draw on the available line of credit with Wells Fargo.

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Related Content:

Avid Receives Anticipated NASDAQ Delist Letter

New Avid Rights Agreement Will Cause “Substantial Dilution” to Potential Acquirers

Avid Unlikely to Regain Compliance with NASDAQ Listing Requirements by March 2014 Deadline

Avid Technology and Computershare Trust Company as Rights Agent, Rights Agreement Dated as of January 6, 2014

Avid Receives Additional Notice of Potential NASDAQ Delisting

Avid Delays Filing of Q2 2013 Financial Results and Form 10-Q

New Avid Bonus Plan Contemplates “Reorganization Event”

Avid Says its 2009 – 2011 Financial Statements No Longer Reliable

Avid Delays Release of Q4 and Full Year 2012 Results, Shares Fall

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Dalet Revenue Grows 7 Percent in 2013 on Strong Sales of Newsroom Solutions

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 14 2014

Dalet, a provider of broadcast newsroom computer systems, asset management, and radio automation solutions, reported that its revenue for 2013 was 2012 revenue was €36.7m, an increase of 7% versus 2012.

Fourth quarter revenue was €12.3m, up 20% versus the same period a year ago.  The strong Q4 made the difference for Dalet, whose revenue had been flat for the first three quarters of 2013 when compared to the same period last year.

Goss margin for the full year 2013 were 87%, up from 86% in 2012, and up from 80% in 2011. The company attributed the margin expansion to a favorable sales mix during the year.

On a geographic basis:

  • Revenue in Europe was €17.6m in 2013, down 6% versus the full year 2012.  Nevertheless, Europe represented 48% of total revenue for the year.

 

  • Revenues grew 11% in the Americas to €12.8m, or 35% of total revenue for the year.

 

  • 2013 revenue from APAC and MEA grew 43% and 64%, respectively, and accounted for 9% and 7% of total revenue, respectively.

 

 

On a segment basis:

  • Asset management revenue was €13.6m, down 11.7% versus the previous year.  Asset management revenue represented 37.1% of total revenue in 2013, compared to 44.9% of total revenue in 2012

 

  • TV Newsroom systems was €12.9m, up 48.3% versus the previous year. TV newsroom systems represented 35.1% of total revenue, compared to 25.4% of total revenue in 2012

 

  • Sport solutions revenue was €3.8m, up 8.6% versus the previous year. Sports solutions revenue was 10% of total revenue in both 2013 and 2012

 

  • Radio solutions revenue was €5m, flat with 2012. Radio solutions represented 13.6% of total revenue, compared to 14.6% of total revenue in 2012

 

  • Integration revenue was €1.4m, down 26.3% versus the previous year.  Integration revenue represented 3.8% of total revenue, compared to 5.5% of total revenue in 2012

 

Dalet said its “financial position remains robust and the operating profit before non-recurring items for the year should be similar to the 2012 results,” but did not provide any further details.  The company had approximately €6m cash on hand at the end of 2012, but did not disclose its cash position at the end of 2013.  It also did not disclose its order backlog, which stood at €22m at the beginning of 2013.

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Related Content:

Press Release: Dalet Revenues 2013: €36.7 Million, +7%

Previous Year: Dalet Reports 10 Percent Revenue Growth in 2012 Thanks to Strong MAM Sales

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© Devoncroft Partners 2009-2014. All Rights Reserved.

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Broadcast Vendor M&A: SintecMedia to Acquire Pilat Media for £63.3 million

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Jan 17 2014

In a move that further would concentrate the broadcast business management (aka traffic & billing) market, SintecMedia and Pilat Media have announced the terms of a recommended proposal whereby SintecMedia will acquire Pilat.

Under the terms of the proposed deal, SintecMedia plans to acquire the shares of Pilat that it does not already own in an all cash deal that values Pilat at £63.3 million ($103.5m).

PE firm Riverwood Capital Management, which owns SintecMedia, will provide 49% of the financing, with the remainder funded from the existing resources of the SintecMedia Group, including (to the extent required) pursuant to a pre-existing debt facility made available to SintecMedia by Bank Leumi.

SintecMedia says its strategic plan for the Pilat business is “to gradually integrate certain functions where appropriate to realize synergies and economies of scale; but as both companies face growing demand for their products and services and, given their backlogs of work, this is unlikely to affect the vast majority of positions and staff across the two companies.”

 

Second Attempt at Merger Between SintecMedia and Pilat Media

This is not the first time that Sintec and Pilat have flirted with combining the companies.

In 2009, SintecMedia mounted a similar bid to takeover of Pilat Media, but was unable to gain the required approval of 75% of Pilat’s shareholders.

The 2009 deal valued Pilat Media at £16.3m, or about 25% of the offer currently on the table.

Once again, the newly announced deal must achieve approval from 75% of Pilat Media’s shareholders.

However, this time around the companies should have an easier time gaining this approval than they did during the time of the attempted 2009 merger.

The proposed deal already has the buy-in from Shaul Elovitch whose Eurocom Group owns 23.9% of Pilat Media, and SintecMedia already owns a further 22.7% of Pilat as a result of the attempted 2009 merger and through continued accumulation of the company’s shares.

Remaining Pilat Media shareholders with a 400% reward for their patience since rejecting SintecMedia’s 2009 overtures.  They will also be paid in cash, something pointed out by SintecMedia CEO, Amotz Yarden, who said the proposed deal represents a “substantial premium” to Pilat’s recent share value, and “the boards of SintecMedia and SMS believe that, given the economic uncertainty and market pressures facing the industry, this represents a very good opportunity for Pilat Shareholders to realize their investment in cash today.”

 

 

Third M&A Deal for SintecMedia Since Riverwood-backed Management Buyout

If the deal gains shareholder approval, it will be the third acquisition by SintecMedia since it was purchased in 2011 by PE firm Riverwood Capital Management for approximately $110m.

Sintec acquired StorerTV in January 2013, and then acquired Argo Systems a few weeks later, in an effort to bolster Sintec’s presence in the North America Market.

Whereas StoreTV and Argo Systems were relatively small deals, the tie-up with Pilat Media is a much larger and arguably transformative deal for the company, and potentially has wider ramifications in the broadcast industry as well.

By acquiring Pilat Media, Sintec will likely become one of the largest players in the broadcast business management software market, and will almost certainly be the biggest traffic & billing vendor outside of the United States where Harris Broadcast and WideOrbit are the two leading vendors.

Not only will the Pilat acquisition make SintecMedia a major player in traffic & billing, it will also transform the company into one of the larger pure-play software vendors in the broadcast space.  Both companies have more than 300 employees and a broad range of blue chip customers around the world.

 

Deal Recommended by Both Sides

Acceptance of the proposed transaction has been recommended by the boards of both companies, who said in a statement that “the management of SintecMedia and Pilat have together agreed the approach for organizing and managing the enlarged group harmoniously, leveraging the relative strengths of each organization.”

For its part, Sintec says it “attaches great importance to the skills, experience and knowledge of the existing employees of the Pilat Group, who have contributed to the success of the business to date and believes that they will benefit from enhanced career and business opportunities within the Enlarged Group,” and that “in conducting any rationalization, SintecMedia intends that the employees of the Pilat and SintecMedia groups will have equal opportunity.”

Sintec has also given assurances to the Pilat Directors that the existing employment rights (including pension and severance rights) of all Pilat Group employees will be fully safeguarded, there will be no changes in the conditions of their employment, and that SintecMedia has no any intention to change the locations of Pilat’s places of business or to re-deploy its fixed assets.

 

Management of Enlarged Company

When/if the deal closes, the board of the enlarged group will be comprised solely of existing SintecMedia directors, and the directors of Pilat Media will resign from the Pilat Board.

At that time, Pilat Media’s CEO and CFO, Avi Engel and Martin Blair, will also resign as employees of Pilat Media. Both Engel Blair will provide handover support as part of their notice period for up to one month following their resignation, and will then be released from their employment, and paid in lieu of the balance of their contractual notice period. Engel and Blair have each agreed to provide up to 15 days of additional handover assistance within the first 12 month period after the deal closes, and Engle will also enter into a consultancy agreement with SintecMedia on terms yet to be agreed.

Pilat’s Remuneration Committee has agreed to pay Engel £300,000 and Blair £40,000 respectively in recognition of their roles in effecting the acquisition. Pilat Media chairman, Michael Rosenberg, will receive £60,000 for his role in the deal.

The companies said that they expect the deal to close towards the end of Q1 2014.

When the deal closes Pilat will then be wholly owned by Sintec, and Pilat shares, which are currently traded on the AIM and TASE exchanges, will be cancelled.

 

Pilat Media’s had revenue of £23.48m for the full year 2012.  Revenue through the third quarter of 2013 was £18.69m, up 18.4% versus the same period in 2012.

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Related Content:

Proposed acquisition of Pilat Media Global plc (“Pilat”) by SintecMedia Ltd.

SintecMedia Limited 2009 Offer for Pilat Media Global

Broadcast Vendor M&A: SintecMedia Acquires Argo Systems

Broadcast Vendor M&A: SintecMedia Acquires StorerTV

Press Release: Taldan Capital Leads $110 million the Buyout of SintecMedia

Riverwood Capital Portfolio Companies – SintecMedia

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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Evertz Revenue Declines 33 Percent in Q1 Fiscal 2014

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 12 2013

Evertz announced that its revenue for the first quarter of its 2014 fiscal year was C$63.85m, down 33% versus the same period a year ago, and down 2% versus the previous quarter.

Net earnings for the quarter were C$11.8m (C$0.16 per share, or C$0.13 excluding For-x), down 52% versus the same quarter last year, and up C$3.7m or 12% versus the previous quarter.

The results were below the consensus expectations of equity analysts who were expecting revenue of C$67.9m and EPS of C$0.14. Analysts called the results “a hair light” but noted that the company’s backlog and shipments for August were very strong.

Revenue in the US/Canada region was C$35.9m, down 40% from C$59.4m last year, and up 8% from C$33.3m last quarter.

US/Canada sales were 56% of total revenue during the quarter, down from 62% % of revenue during the same period a year ago, and up from 41% of revenue last quarter.

The international region had revenues of C$27.9m or 44% of total revenue, down 24% from C$36.6m (38% of total), and up down 13% versus last quarter when international revenue was $31.1m or 49% of total revenue.

For the quarter ended July 31, 2013 gross margin was $36.7 million compared to $55.7 million in the same quarter last year. Gross margin percentage was approximately 57.5% compared to 58.0% in the same quarter last year.

Gross margins for the first quarter of FY 2014  were 57.5, down from 58% during the same period a year ago, and up from 56.7% last quarter.

R&D expenses in the quarter were C$13.5m, an increase of 14% versus the same period last year, and down 12% versus last quarter.   R&D expenses were approximately 21% of revenue in the quarter, versus 12% last year, and 23.5% last quarter.

Selling and administrative expenses for the quarter were C$11.6m, down 6% versus last year, and down 17% versus last quarter.   Selling and administrative expenses represented approximately 18% of revenue in the quarter versus 13% of revenue during the same period last year, and 21% of revenue last quarter.

Purchase order backlog at the end of August 2013 was in excess of $53 million and shipments during the month of August 2013 were $25 million.

The company’s purchase order backlog at the end of the first quarter of fiscal 2014 was in excess of C$53m, up sharply from C$35m, last quarter, and shipments during the month of August 2013 were C$25 million.

 

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Related Content:

Press Release: Evertz Technologies Reports Results for the First Quarter Ended July 31, 2013.

Evertz Announces 5 Percent Share Buy Back Program

Evertz Announces $9 Million Order From Unnamed International Customer

Previous Quarter:  Evertz Misses Expectations as Revenue Dip 14 Percent in Q4 FY 2013, Still Delivers Record Full-Year Performance

Previous Year: Evertz Beats Expectations in Q1 Fiscal 2013 as Profits Jump 41 Percent

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© Devoncroft Partners. All Rights Reserved.

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Vitec Group 1H 2013 Results: Videocom Revenue Down 5.1 Percent, Bexel Flat

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Sep 04 2013

The Vitec Group said that its total revenue for the first six months of 2013 was £157.6m, a decrease of 10.7% versus the first six months of 2012.

Vitec said that on an organic basis at constant currency, its revenue was down 9% versus the first half of 2012, and that after adjusting for the London Olympics and the disposal of the Staging business the underlying sales run rate was similar to the second half of 2012.

Despite the lower revenue, on an overall basis the company posted an increase in operating profit and profit before tax of 4.8% and 0.6% respectively.

 

Vitec Videocom Division

The company said broadcast-focused Videocomm division performed well in a challenging Broadcast & Video market.

Vitec’s broadcast-focused Videocomm division is made up of more than dozen brands that serve various parts of the broadcast industry: Anton/Bauer, Autoscript, Camera Corps, The Camera Store, Haigh-Farr, Litepanels, Microwave Service Company, Nucomm, OConnor, Petrol Bags, RF Central, Sachtler, Vinten and Vinten Radamec.

For the first six months of 2013 revenue from the Videocom division was £70.2m, down 5.1% versus the first six months of 2012, and down 3% versus the previous six month period (July to December 2012).

Videocomm order intake was only modestly behind prior year with sales reflecting the timing of shipments.

Videocom operating profit for the first half of 2013 was £8.7m, an increase of 3.6% versus last year.  The operating margin for the period was 12.4%, up from 11.4% last year.

The company attributed the increased operating margin to cost control measures and the initial benefit of restructuring activities, which it said was progressing well. Restructuring within the Videocom division includes the relocation of certain manufacturing activities to Costa Rica and the streamlining of broadcast and MAG operations in the United States.

The company highlighted the performance of several its brands, saying:

  • Our camera supports brands (Vinten, Sachtler and O’Connor) continued to trade well. We have grown our sales of robotic products following increased project activity in EMEA and Asia and our Sachtler range of supports continues to show good growth.

 

  • Our Litepanels LED lighting products benefited from growth in the Asian market. We are in the process of broadening the product range to enable us to maintain our leading position in the market.

 

  • Our Anton/Bauer mobile power products experienced a challenging video market but continued to make progress in supplying batteries and chargers to power medical carts in hospitals.

 

  • Camera Corps, acquired in April 2012, is trading in line with expectations although the lack of significant sporting events this year means that we expect a lower level of sales activity. This is in comparison to 2012 where the business benefited from the UEFA Euro 2012 football championships in the first half and the London Olympics in the second half of the year.

 

  • Our MAG sales grew during the first half benefiting from a $5.8 million US Department of Justice award for transmitters and receivers. We continue to bid for significant opportunities, whilst recognizing that the timing of major awards from US Government agencies is difficult to predict.

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Vitec Services Division (Bexel)

For the first half of 2012, revenue from Vitec’s Services Division, which primarily comes from Bexel, was £13.8m, essentially flat with the first six months of 2012.  On an organic and constant currency basis, Bexel revenue declined 3.5% versus the first six months of 2012.

The company said that these results were in line with expectations and that Bexel had made good progress on its strategy of working closely with key customers and supporting projects where the business can add most value.  As the result of this focus, as well as a rationalization of the business structure, the operating profit at Bexel doubled to £200,000 for the first six months of 2012. Bexel’s operating and margins were up by 70 bps to 1.4%.

 

“Vitec CEO Stephen Bird said that the company’s Videocom Division had” performed well in a challenging market and the Division’s MAG results benefited from a $5.8 million contract with the U.S. Department of Justice. The Imaging Division made good progress despite the continuation of the more challenging market that started to impact us in the second half of last year. The Imaging Division continues to grow its market share and this will be supported by new product launches planned for later this year.”

Bird said that Vitec is on target to deliver the significant cost reductions outlined in its 2012 full year results announcement, and that the company will supplement these savings with specific rationalization actions within our Imaging and Services Divisions I order to deliver further attractive returns.

“Our longer-term growth prospects continue to be positive and we are well positioned to benefit from any upturn in our markets,” said Bird. “Our order visibility remains limited but our first half year performance was consistent with our normal phasing and we are on track to meet our full year expectations.”

 

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Related Content:

Press Release: The Vitec Group plc Half Year Results to 30 June 2013

Vitec Group 1H 2013 Earnings Presentation

Broadcast Vendor M&A: Vitec Buys Teradeck for $15 Million

Vitec Group Says 2013 Trading In-line with Expectations, Videocom Markets Remain Challenging

Vitec Group 2012 Annual Report (published March 2013)

Previous Year: Vitec Group 1H 2012 Results: Videocom Revenue Up 12.3 Percent, Bexel Down 2.1 Percent

Vitec 2012 Results: Videocom Revenue Up 7.3 Percent, Bexel Doubles Operating Profit as Revenue Increases 4.4 Percent

Previous Interim Statement: Vitec Group Says Trading In-line with Expectations Despite Challenging Macroeconomic Environment

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Orad Revenue Declines 29% in Q2 2013, Announces 10% Workforce Reduction

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 20 2013

Graphics and media asset management (MAM) provider Orad reported that its revenue for the second quarter of 2013 was $7.2m, down 29% versus the same period a year ago, and up 1% versus the previous quarter.

 “The lower level of activity which started in Q3 2012, mostly due to the economic situation in Europe, continued through the second quarter of 2013, as reflected in the disappointing results for the second quarter and also for the first half of the year,” said Orad CEO Avi Sharir.

Orad has been struggling since the third quarter of last year, particularly in Europe, which is the company’s largest market. In February 2013, the Orad issued a profit warning for the full year 2012, saying at that time that it expected its profit to fall by about 34 percent.

The company’s results in Q2 2013 show that the company continues to struggle in the European market. However, the company also reported a bright spot in an otherwise disappointing quarter, saying that its order intake increased during the quarter. “We are happy to announce that during Q2 2013 we booked the highest volume of orders ever in Orad’s history, setting a new record,” said Sharir.

Orad’s product revenue in the quarter was $5.6m (78% of total revenue), down 33% versus the same period last year, and up 7% versus the previous quarter.  Service revenue in the quarter was $1.6m, down 11% versus last year, and down 14% versus the previous quarter.

The net loss for the second quarter of 2013 was $1.3m, or -$0.11 per share, compared to a net profit of $732,000 or $0.06per share last year, and a net loss of $944,000, or $0.08 per share last quarter. 

Including additional charges in the quarter, the total comprehensive loss for the second quarter of 2013 was $1.375m, compared to total comprehensive income of $507,000 last year, and a total comprehensive loss of $1m last quarter.

Gross margins for the quarter were 63% versus 69% last year, and 65% last quarter.

The operating loss for the quarter was $1.46m, compared to an operating profit of $1m last year, and and operating loss of $657,000 last quarter.

Operating expenses for the quarter were $6m (83% of total revenue), down slightly from last year, and up 14% versus the previous quarter.

R&D costs for the second quarter of 2013 were $1.45m, up 5% versus the same period last year, and down 5% compared to last quarter.  R&D costs were 20% of total revenue in the quarter, compared to 14% of total revenue last year, and 21% of total revenue last quarter.

Sales and marketing expenses in the quarter were $3.7m, down 2% versus the same period last year, and up 29% compared to last quarter.  Sales and marketing costs accounted for 51% of total revenue in the quarter, compared to 37% of total revenue last year, and 40% of total revenue last quarter.

Following the company’s sharp rise in sales and marketing costs this quarter, Sharir says that Orad will continue to spend in this area.  “We also continue to invest in our sales and marketing infrastructure and in particular have put emphasis on strengthening our North America office with the addition of a few senior people,” he said.

General and administrative expenses in the quarter were $853,000, down 4% versus the same period last year, and down 4% compared to last quarter.  G&A costs accounted for 12% of total revenue in the quarter, compared to 9% of total revenue last year, and 12% of total revenue last quarter.

The company ended the quarter with $5.6m in cash equivalents and restricted cash, compared to $9.6m last year, and $7.2m last quarter.

 

Announcement of 10 Percent Workforce Reduction

Although the company says it had strong order intake during the second quarter of 2013, Sharir says it’s “too early to tell if we reached a turning point in the level of activity, but it is certainly a very encouraging sign.”

“As a measure of caution, we have decided to align our operating expenses with our current financial results, and have decided to reorganize some departments, reducing our overall headcount by 10% and trim other operational costs as well. The result of these measures will be seen in the lower cost of operating expenses expected as of the fourth quarter of 2013. The decrease in our operational expenses will not affect our continuous focus on strategic initiatives.”

 

First Half 2013 Results

For the first six months of 2013, Orad’s revenue was $14.4m, down 24.7% versus the first half of 2012.

The net loss for the first six months of 2013 was $2.2m, compared to net income of $1.7m for the first half of 2012.

Gross Margins for the first half of 2013 were 64%, down from 69% for the first six months of 2012.

The operating loss for the first six months of 2013 was $2.1m compared to operating income of $1.8m for the first six months of 2012.

Operating expenses in the first six months of 2013 were $11.3m, or 78% of total revenue, down 1% versus last year when total operating expenses accounted for 60% of overall revenue.

R&D expenses for the first half of 2013 was $3m, or 20% of total revenue, up 9% versus the same period a year ago when R&D accounted for 15% of revenue,

Sales & marketing expenses for the first six months of 2013 $6.6m, or 45% of total revenue, down 3% % versus the first half of 2012 when sales and marketing accounted for 45% of revenue.

General and administrative expenses for the first six months of 2013 were $1.7m, or 12% of total revenue, down 9% versus the first half of 2012 when G&A expenses were or 10% of total revenue.

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Related Content:

Press Release: Orad Results for the second quarter and for six months of 2013

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

Previous Quarter: Orad: Results for the First Quarter

Orad Warns of Lower Revenue, Net Loss in Q4 2012 of 2013

 

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DTS Posts Q2 2013 Loss, Lowers Full Year Outlook

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 19 2013

Audio processing specialist DTS announced that its revenue for the first quarter of 2013 was $27.2m, an increase of 25% versus the same period a year ago, and a decline of 17% versus the previous quarter.

The company said its network-connected business, which includes connected TVs, PCs and mobile devices, doubled versus last year.  However, the company saw revenue decline 19% versus last year in its Home AV business, and decline 10% in its Blu-Ray business.

Network connected revenue accounted for about 50% of total sales in the quarter. Blu-Ray and home AV represented just under 20% and just under 15% of total revenue respectively.

Broadcast revenue in the quarter was up slightly, while automotive remained relatively flat on a year-over-year basis. Broadcast and automotive represented less than 5% and 15%, respectively, of total revenue for the second quarter.

The GAAP net loss for the first quarter of 2013 was $2m, or $0.11 per share, compared to a GAAP net loss of $775,000, or $0.05 per share, in the second quarter of 2012, and a GAAP net loss of $1.5m, or $0.08 per share last quarter.

Non-GAAP net income in the quarter was $2.1m, or $0.11 per share, compared to non-GAAP net income of $3.5m, or $0.21 per share, last year, and non-GAAP net income of $4m, or $0.22 per share last quarter.

Operating expenses for the quarter were $26.6m, or 98% of total revenue.  This is an increase of 24% versus the previous year.

SG&A expenses for the quarter were $18,75m, up 12% versus the previous year. Research and development costs in the quarter were $7.8m, up 64% versus last year.

The non-GAAP operating margin in the second quarter of 2013 were 21%, down from 38% in the first quarter of 2012.

The non-GAAP operating margin in the second quarter of 2013 was 13%, down from 26% last year, and down from 21% last quarter.

The Company closed the quarter with cash and investments totaling $76.7m, flat with last quarter.

“DTS delivered attractive revenue growth in the second quarter in line with our expectations,” said DTS chairman and CEO Jon Kirchner. “The growth was driven by strong performance in our network-connected business. Our strategy remains squarely focused on the large network-connected opportunity, and as expected, this segment of our business contributed nearly half of total revenue during the quarter. As we enter the important autumn and holiday season, we are closely monitoring CE market headwinds and the timing of certain customer network-connected product rollouts. Importantly, we are very encouraged by the growing interest in our new Headphone:X and Play-Fi technologies and expect those products to see increasing design wins as we get into 2014. With growing content support and increasing device penetration, we are pleased with our strategic progress and remain focused on execution in the coming quarters.”

 

Business Outlook

The company lowered its forward guidance due to “uncertainties around the timing of certain mobile and Play-Fi product shipments, which are now expected to push into 2014; and a modestly weakening near-term CE business environment, which has impacted the Company’s expectations for home theater in a box systems, Blu-ray players and automotive unit volumes; and lower expected royalty recoveries.”

The Company now expects 2013 revenue in the range of $130 to $136 million, down from previously issued guidance of $140 to $146 million.

Management says it will offset any revenue weakness through active cost management, and therefore says its GAAP EPS expectations are unchanged.  On a GAAP basis, DTS continues to expect an operating margin of approximately 3% to 6% and expects EPS in the range of $(0.05) to $0.00 per diluted share.

Non-GAAP earnings for the year are now expected to be in the range of $0.98 to $1.12 per diluted share, down from previously issued guidance of non-GAAP EPS in the range of $1.05 to $1.20 per diluted share.

Stock-based compensation expense is now expected to be in the range of $0.38 to $0.41 per diluted share, down from previously issued guidance of $0.44 to $0.47 per diluted share.

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Related Content:

Press Release: DTS Reports Second Quarter 2013 Financial Results

Previous Quarter: DTS Q1 2013 Revenue Rises 22 Percent

Previous Year: DTS Posts Loss in Q2 2012 Due to Weak Consumer Demand for Blu-Ray

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