Broadcast graphics MAM specialist Vizrt reported strong results for the fourth quarter and full year 2014.
The company also provided an update on the pending $374 million all-cash deal with Nordic Capital to take the company private.
For the fourth quarter of 2014 revenue was $36.2 million, an increase of 9% versus the fourth quarter in 2013, and an increase of 2.8% versus the preceding quarter, Q3 2014.
Gross margins for Q4 2014 were 71%, which compares favorably to the 69% margins recorded during Q4 2013 and is consistent with the 71% gross margins from the preceding quarter.
Operating expenses for the quarter were $17.9 million. This represents a 9% increase when compared to the fourth quarter of 2013 and is flat versus the preceding quarter.
- R&D expenses in the quarter were $5.5m (15.1% of revenue), down 1% versus the same period ago, and down 4% versus the previous quarter
- Sales and marketing expenses in the quarter were $8.5m (23.6% of revenue), up 7% against the year earlier period and down 5% versus the Q3 2014
- General and administrative expenses in the quarter were $3.8m (10.7% of revenue), up 31% versus the same period a year ago, and up 18% versus the preceding quarter
EBITDA was $7.8 million for the quarter, up 357% from $1.7 million during the fourth quarter of 2013, and up 9% from $7.2 million in the previous quarter. The EBITDA margin for the quarter was 22% versus an EBITDA margin of 5% during the comparable quarter last year and 21% during the third quarter of 2014.
Net profit for the quarter was $4.5 million, compared to a net loss of $3.4 million last year, and down slightly versus last quarter’s net profit of $5.2 million.
Product line results for the Quarter:
- Broadcast Graphics (BG) accounted for $30.8 million during the quarter (85% of total revenue versus 86.7% last quarter), an increase of 6% versus the same period ago, and an increase of 1% versus the previous quarter. The BG order backlog was $35.6 million, comparable to the size observed at the same time last year, and down 3.6% versus the previous quarter.
- Media Asset Management (MAM) revenue in the quarter was $5.66 million (18% of total revenue versus 16% last quarter), up 5% versus the same period a year ago, and up 35% versus last quarter. The MAM order backlog was $14.6 million, up 37% versus last year, and up 5% versus last quarter
Geographic Performance for the Quarter:
- Revenue from EMEA was $17.1 million (47.2% of total revenue versus 47.5% last quarter), up 25% versus the same period last year and up 2% versus last quarter
- Americas revenue was $8.9 million (24.8% of total revenue versus 27.6% last quarter), down 14% versus last year, and down 13% versus last quarter.
- APAC revenue was $10.1 million (27.9% of total revenue versus 23.2% last quarter), up 9% versus last year, and up 3% versus last quarter
Results for full year 2014:
The full year results were headlined by growth of 31% in EBITDA and 80% in cash flow from operations.
Vizrt’s 2014 revenue was $141.5 million, an increase of 16% versus the $122.4 million recorded during 2013.
Net profit for the 2014 was $15.5 million ($0.23 per share), which is considerably higher than the $3.6 million ($0.06 per share) net profit from 2013. The attributed its improved profitability to a change in product mix, consistent financial prudence, and the acquisition of Mosart MediaLabs
Gross margins for 2014 were 70%, which was a slight improvement from the 68% margins from 2013. EBITDA was $27.7m (20% operating margin) for the full year 2014, a significant year-over-year increase from the $15.5 million (13% operating margin) recorded during 2013.
Operating expenses for 2014 were $71.1 million, a 14% increase over the operating expense level of 2013.
- R&D expenses for the full year were $22.5 million (31.6% of revenue), an increase of 18% versus 2013
- Sales and marketing expenses for 2014 were $35.2 million (49.6% of revenue), up 9% against the sales and marketing expense from 2013
- General and administrative expenses were $13.3 million (18.8% of revenue), up 23% versus the 2013 calendar year
The geographic breakdown of 2014 sales consisted of 26% from Americas, 48% from EMEA, and 26% from APAC.
Vizrt ended 2014 with 584 employees compared to 542 at the end of Q4 2013. 24 employees were added following the Mosart acquisition in Q1 2014.
Update on Pending Acquisition by Nordic Capital
Company management provided an update on its previously announced acquisition by Nordic Capital. Final closing of the transaction remains subject to certain conditions including the decision of Israeli tax authorities regarding a tax withholding ruling. Vizrt believes the process will come to a positive conclusion in the next several weeks. The acquisition was first announced on November 10, 2014 and approved by a majority of shareholders on December 18, 2014.
Martin Burkhalter, Vizrt’s CEO, stated: “Our strong performance continued in Q4, despite the fact that we did not see the discretional spending towards the year-end that we normally have witnessed in previous years. Our strong performance is also reflected in our solid backlog going forward. I am particular pleased with the improvement of MAM results and the MAM backlog which increased by 37% compared to the same time last year.”
Press Release: Vizrt Reports Q4 and 2014 Results
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