Posts Tagged ‘Orad’

Avid Q1 Growth of 20%, Offset by Bookings Shortfall

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
May 11 2016

Avid Technology announced Q1 2016 GAAP revenue of $143.5 million, an increase of 20% versus Q1 2015 revenue of $119.6 million. Avid Logo_ white background

Approximately 75% of the year-over-year growth is attributable to a change in the accounting treatment of revenue recognized for the release of the latest Pro Tools version 12.5 during the first quarter.  The ability to more quickly recognize revenue reflects Avid’s progress over the past two years of eliminating the practice of implied support for products and transitioning to explicit support and recurring revenue models.

Absent the revenue acceleration, management indicated Avid for the quarter would have been within the original guidance of $120 million to $125 million on a non-GAAP basis.

Avid’s public filings did not disclose the amount of the growth attributable to revenue contribution from Orad, purchased in the third quarter of 2016.  Orad had $10.4 million of revenue during Q1 2015.

Product revenue for the quarter was $84.5 million, an increase of 5.6% against year-earlier quarter.  Products represented 58.9% of overall revenue in the quarter, a decrease versus the 67% contribution during the first quarter of 2015.  Services revenue was $59.0 million, an increase of 49.2% versus the year-over-year period.  Services contributed 41.1% of total revenue for Q1 2016, an increase versus the 33% contribution from Q1 2015.

Q1 2016 net income was $20.9 million or $0.53 per share.  This compares to Q1 2015 net income of ($0.2) million, which was $0.00 per share.

Gross margins for the quarter were 69.7%, a substantial improvement over the 60.3% from Q1 2015.  Backing on the accelerated Pro Tools revenue recognition would have resulted in a gross margin of approximately 67%.  The remaining increase in gross margin was primarily due to lower non-variable costs of sales resulting from Avid’s ongoing efficiency programs.

Operating income for Q1 2016 was $25.7 million, a more than 20-fold increase over the operating income of $1.1 million in Q1 2015.

R&D expense for the quarter were $21.4 million, a 7.3% decline against Q1 2015 R&D levels.  As a percentage of revenue R&D expenses were 15.0% for the quarter, compared to 19.3% of total revenue in Q1 2015.

Sales and marketing costs for Q1 2016 were $31.6 million, representing a 12.8% rise versus Q1 2015 sales and marketing levels.  Sales and marketing expenses were 22.0% of Q1 2016 revenue, a decline versus 23.4% of total revenue from the first quarter of 2015.

G&A expense was $17.7 million for Q1 2016, a decline of 8.6% versus the year earlier quarter.  Expressed in terms of total revenue G&A expense was 12.3% of sales in Q1 2016 versus 16.2% in Q1 2015.

When considering the comparable period Q1 2015 figures do not include Orad’s operations (purchased in Q3 2015), the decline in R&D and G&A further illustrates the impact of Avid’s recent restructuring initiatives.

During the first quarter of 2016, Avid announced a $68 million (annualized) efficiency initiative.  The full $68 million savings are expected beginning in 2017.  During the earnings presentation for the quarter, management indicated $33 million of the goal has been completed through the first quarter activities.  $5 million was reflected in first quarter results.

There are many one-time expenses and non-cash items in Avid’s income statement results.  To provide a more normalized view of profitability Avid cites adjusted EBITDA, which is defined as operating income plus expense add backs for costs attributed to amortization, restructuring, restatements, stock-based compensation, acquisitions, integration activities, and efficiency program costs.  Adjusted EBITDA for the quarter was $38.5M, a substantial increase of 227% over Q1 2015.

Given the complexity of Avid’s financial statements, it is useful to review the impact on the Company’s cash balance.  Cash used in operations for the quarter was $11.2 million.  This compares to cash generated in operations of $4.6 million during the first quarter of 2016.

Cash generation in the quarter was negatively impacted by a build out of inventory for the recently announced Nexis storage platform.

Avid ended the quarter with $87.8 million of cash.  Avid had started the quarter with $17.9 million of cash.  The increase in the cash balance is attributable to the Company’s $100 million debt offering during the first quarter. 

Several factors have combined to make Avid’s financial disclosures difficult to comprehend, most notably the restatement in late 2014, which introduced a considerable amount of amortized revenue from prior financial periods.  Though this revenue is now recognized in Avid’s income statement, it does not represent any actual cash received from clients.  In other words, it is non-cash revenue with 100% gross margins.  In aggregate, changes in deferred revenue represented a negative cash adjustment (versus net income) of $40 million in Q1 2016 and $2.1 million in Q1 2015.

The negative deferred revenue dynamic also creates a revenue headwind for the future since this component of deferred revenue will decline with time. Management has indicated the impact is between $25 million and $30 million a quarter.

Adding to this complexity are the effects of recent restructuring initiatives, the impact of the Orad acquisition, and the ongoing transition to a subscription model.

In an effort to better communicate the results of Avid’s ongoing transformation, management references several new metrics.

Update on Transformation:

Below is a chart from Avid’s investor presentation for Q1 2016 illustrating several areas of progress on the market adoption of Avid’s Everywhere Platform.

investorslide

Commenting on the transformation progress, Avid CEO Louis Hernandez, Jr. stated, “Our work so far in 2016 demonstrates the continued momentum of the Avid Everywhere strategy, the increased adoption of the Avid MediaCentral Platform by our global base of customers and strong progress as we move steadily towards completing the transformation.”

Business Outlook:

Bookings for the quarter were $98 million on a constant currency basis, a decline of 18% versus Q1 2015.  The original guidance for Q1 2016 bookings was for $108 million to $118 million.

Management attributed the shortfall to market volatility created by the ongoing industry transition and delayed buying decisions related to the anticipated release of the Nexis storage platform, which will ship during Q2 2016.

The declining in bookings resulted in a lower end of quarter accounts receivable balance (approximately $15 million).  Management expects the lower accounts receivable balance to negatively impact Q2 2016 free cash flow.  Because of this management is anticipating a material use of adjusted free cash flow in the upcoming quarter of $27.5 million to $32.5 million.  Adjust free cash flow includes the impact of capital expenditures and excludes the cash impact of restructuring activities.

For Q2 2016, management provided guidance of bookings between $99 million and $115 million on a report basis (as opposed to constant currency).  Bookings for the second quarter of 2015 were $118 million.  The full backlog (post impact of restatement) was $480 at the end of first quarter, a 4% increase over the backlog at the end of the first quarter of 2015.

Avid is expecting to begin generating adjusted free cash flow in the second half of 2016.  As part of the earnings release, Avid reaffirmed earlier full year guidance for 2016.

During the earnings call, Louis Hernandez, Jr. added, “We’re probably most excited about the attractive financial model post transformation. We’ve a clear path to completion, the non-marketed products that we’re rolling off and are completed as expected, the efficiency gains are on track and then the accounting adjustments will end towards the end of this year early next year, leaving us with an adjusted EBITDA and free cash  flow, which are expected to increase dramatically post transformation.”

 

Related Content:

Press Release: Avid’s Q1 2016 Earnings Release

Presentation: Avid Q1 2016 Earnings Presentation

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

 

Avid 2015 Revenue and Profitability Decrease with Continued Transformation

Analysis, Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Mar 21 2016

Avid Technology announced full year 2015 results.  Management also provided long-term guidance for financial performance through 2018. Avid Logo_ white background

Total revenue for 2015 was $505.6 million, a decrease of 4.6% versus 2014 revenue.  Product revenue for the year was $336.4 million, a decline of 11.1% against 2014.  Products represented 66.5% of overall revenue in 2015.  Services revenue was $169.2 million, an increase of 11.6% versus the year prior.  Services contributed 33.5% of total revenue for the year.

Net income was $2.4 million or $0.06 per share.  This compares to 2014 net income of $14.7 million, which was $0.38 per share.

Gross margins for 2015 were 60.9%, a slight decline versus the 61.4% from 2014.

Operating income for 2015 was $6.9 million, a decrease of 64.6% versus 2014 operating income.  2015 Operating income included a restructuring cost of $6 million.

R&D expense for the year was $95.8 million, a 6.1% increase over 2014 R&D levels.  As a percentage of total revenue, R&D expenses were 18.9%, compared to 17% of total revenue in 2014.

Sales and marketing costs for 2015 were $122.5 million, representing a 7.8% decline versus 2014 sales and marketing levels.  Sales and marketing expenses were 24.2% of 2015 revenue, a slight decline versus 25.1% of total revenue in 2014.

G&A expense was $74.1 million for 2015, a decline of 8.7% versus the prior year.  Expressed in terms of total revenue, G&A expense was 14.6% of sales in 2015 versus 15.3% in 2014.

When considering the 2015 figures included six months of Orad’s operations, the decline in S&M and G&A illustrates the impact of anticipated cost synergies from the acquisition and Avid’s restructuring initiatives.

There are many one-time expenses and non-cash items in Avid’s income statement results.  To provide a more normalized view of profitability Avid cites adjusted EBITDA, which is defined as operating income plus add-backs for costs attributed to amortization, restructuring, restatements, stock-based compensation, acquisitions, integration activities, and efficiency program costs.  Adjusted EBITDA was 2015 $41.5M, a decline of 26% versus the same figure in 2014.

Cash used in operations for 2015 was $34 million.  The net effect of financing events, capital expenditures, and the Orad acquisition left Avid with $17.9 million of cash at the end of 2015.  The balance sheet does not account for the recent financing initiative announced by Avid in February.

Several factors have combined to complicate Avid’s financial disclosures. Most notable, the restatement in late 2014 introduced a considerable amount of amortized revenue from prior financial periods.  Though this revenue is now recognized in Avid’s income statement, it does not represent any actual cash received from clients.  In other words, it is non-cash revenue with 100% gross margins.  In aggregate, changes in deferred revenue represented a negative cash adjustment (versus net income) of $65 million in 2015 and $51.9 million in 2014.  Adding to this complexity are the effects of recent restructuring initiatives, the impact of the Orad acquisition, and the ongoing transition to a subscription model.

CEO Louis Hernandez, Jr. commented on these challenges during Avid’s earnings call, noting “…I know that it would be nicer if the financial expression were more clear and didn’t have the noise of a couple of the variables, the non-marketed products, the amortization, that pre-2010 revenue or that even the shift to recurring.”

Management is aware of this difficulty and has attempted to introduce new metrics to allow analysts to better understand the transition of the business.

Update on Transformation:

Highlighting the progress was bookings growth of 26% in Q4 2015 driven by the largest transaction in Avid history with Sinclair Broadcast Group and the positive impact of the Orad acquisition.  Bookings related to recurring revenue were approximately 38% of total 2015 bookings, a substantial increase over the 26% from 2014.

Below is a chart from Avid’s investor presentation illustrating the recent positive trend in Avid’s bookings in the context of the Company’s continued transformation.

Avid-transformation

Management also disclosed several metrics on the adoption of Avid’s MediaCentral platform.  At the end of 2015 MediaCentral had over 32,000 users, a 54% increase above 2014 levels.  More than 25,000 of the users are paying subscribers.  This represents an increase of 400% in paying subscribers since the beginning of 2015.

Business Outlook:

Contained in Avid’s earning release was full year guidance for 2016 along with longer term guidance for 2017 and 2018.  These figures are provided in the below tables taken from Avid’s earnings release.

Commenting on both 2015 performance and the business outlook, Louis Herandez, Jr added, “Avid is in the final stretches of its dramatic transformation and the benefits of Avid’s Platform approach to solving the media industry’s more pressing needs is reflected in both a solid close to 2015 and dramatically improved financial expectations for 2016 and beyond.  We are on track to complete the transformation and position Avid for long term sustainable and profitable growth with an improved financial model.”

Avid-tables

 

Related Content:

Press Release on Avid’s 2015 Financial Results

Presentation on Avid’s 2015 Financial Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

2015 Big Broadcast Survey (BBS) Reports Now Available

broadcast technology market research | Posted by Joe Zaller
Aug 04 2015

The 2015 Big Broadcast Survey (BBS) Reports have now been published and are available from Devoncroft Partners.

We have been publishing the BBS Reports since 2009.  Each new edition is created through several months of research, including interviews with technology end-users, global surveys of technology decision makers, analysis of the end-user responses, and visualization of the data collected.  Now in its seventh year of publication, the BBS remains the most comprehensive annual study of technology end-users in the global broadcast and media technology industry.  Nearly 10,000 technology professionals in 100+ countries participated in the 2015 BBS, making it once again the largest market study of the media technology industry.

Based on feedback from technology vendors, media companies, and investors, we have updated the vendors, product categories, and market trends profiled in the 2015 BBS to better align with recent market developments.

These updates help ensure the BBS reports remains a critical reference for industry executives to improve strategic decision-making, customer engagement, marketing strategy, product planning, and sales execution.  In addition to technology vendor and service provider strategic planning, BBS reports are also used frequently for M&A and investment activities by both buyers and sellers.

Three types of 2015 BBS reports are available:

  • 2015 BBS Global Brand Reports: provides deep insight into how each more than 100 broadcast technology suppliers (see full list below) are perceived by market participants, along with comprehensive benchmarking of broadcast technology vendors on a wide variety of metrics

 

  • 2015 BBS Product Reports: provide detailed information from buyers, specifiers, and users of broadcast technology products in 30 separate categories (see full list below)

 

  • 2015 BBS Global Market Report: provides detailed information about industry trends, major projects being planned, products being evaluated for purchase, current and future plant infrastructure, broadcast technology budgets, and planned deployment of new technologies including 4K, HEVC compression, and IP-based technology infrastructure

 

For additional information on the 2015 BBS report, please email us.

As is Devoncroft’s custom, we will publish selected highlights from this year’s BBS reports on the Devoncroft website.  These articles are posted on a semi-regular basis, so please check back often.

To receive posts when published, please enter register with your email in the box in the upper right-hand corner of the page.

The tables below list the  technology vendor brands and product categories covered in the 2015 BBS.

 

All Brands Covered in 2015 Big Broadcast Survey (BBS)


Product Categories Covered in the 2015 Big Broadcast Survey

Technology Products & Vendor Brands Covered in the 2015 BBS, by Application Area

 

Acquisition & Production:

Camera Lenses

Angenieux, Canon, Fujinon

 

ENG Cameras

Canon, Hitachi, Ikegami, JVC, Panasonic, Sony

 

Large Format Single Sensor Cameras

ARRI, Blackmagic Design, Canon, Red Digital Cinema, Sony

 

Production Switchers

Blackmagic Design, Broadcast Pix, For-A, Grass Valley, NewTek, Panasonic, Ross Video, Snell, Sony

 

Studio/System Cameras

Grass Valley, Hitachi, Ikegami, JVC, Panasonic, Sony

 

 

Post Production:

 

Graphics & Branding

Adobe, Autodesk, Avid, ChyronHego, Evertz, Grass Valley, Imagine Communications, Orad, Pixel Power, Ross Video, Vizrt

 

Transcoding / Streaming

Dalet/AmberFin, Elemental Technologies, Envivio, Harmonic, Imagine Communications, Telestream

 

Video Editing

Adobe, Apple, Avid, EVS, Grass Valley, Imagine Communications, Sony

 

Infrastructure:

Bonded Cellular

Dejero, LiveU, Teradek, TVU, Vislink

 

Routing Switchers

Blackmagic Design, Evertz, Grass Valley, Imagine Communications, Nevion, Pesa, Ross Video, Snell, Utah Scientific

 

Signal Processing / Interfacing / Modular

Aja Video, Axon, Blackmagic Design, Evertz, For-A, Grass Valley, Imagine Communication, Ross Video, Snell

 

Video Transport

Arris, Aspera, Cisco, Ericsson, Evertz, Harmonic, Imagine Communications, Media Links, Net Insight, Nevion, Riedel, Signiant

 

 

Audio:

Audio Consoles

Avid, Calrec, Lawo, Salzbrenner Stagetec, Solid State Logic (SSL), Soundcraft, Studer, Wheatstone, Yamaha

 

Audio Processing & Monitoring

Adobe, Avid, Dolby, Linear Acoustic, RTW, TSL, Wohler

 

Intercom / Talkback

Clear-Com, Riedel, RTS Intercom Systems, Trilogy

 

Microphones

AKG, Audio-Technica, beyerdynamic, Electro Voice, Marshall Electronics, Neumann, Schoeps, Sennheiser, Shure, Sony

 

Monitors (speakers)

Adam, Avid, Focal, Genelec, JBL, KRK Systems, Mackie, Neumann, PMC,

 

 

Storage:

High Performance Shared Storage:

Avid, Harmonic, HP, IBM, Isilon Systems/EMC, NetApp, Quantum

 

Playout / Transmission Servers

Avid, EVS, Grass Valley, Harmonic, Imagine Communications, Ross Video

 

Production Servers

Avid, EVS, Grass Valley, Harmonic, Quantel

 

 

System Automation and Control:

Broadcast Business Management Systems

arvato/S4M, Imagine Communications, MediageniX, MSA Focus, SintecMedia/Pilat Media, VSN, Wide Orbit

 

Archive & Archive Management

ASG/Atempo, Masstech, Oracle/Front Porch Digital, Quantum, SGL, XenData

 

Playout Automation

Grass Valley, Imagine Communications, Pebble Beach, Playbox, Snell

 

Workflow / Asset Management

arvato/S4M, Avid, Dalet/Amberfin, EVS, Imagine Communications, Sony, Vizrt, VSN

 

 

Playout and Delivery:

Integrated Playout (Channel in a Box)

Evertz, Grass Valley, Harmonic, Imagine Communications, Pebble Beach, Playbox, Snell, Thomson Video Networks

 

On-line / Streaming Video Delivery Platforms

Brightcove, Kaltura, Ooyala, Piksel

 

Transmission Encoders

Arris, ATEME, Cisco, Elemental Technologies, Envivio, Ericsson, Harmonic, Imagine Communications, Thomson Video Networks

 

Transmitters

GatesAir, Hitachi, NEC, Plisch, Rohde & Schwarz, Screen Service, Toshiba

 

 

Test, Quality Control and Monitoring:

 

Multiviewers

Avitech, Axon, Evertz, For-A, Grass Valley, Imagine Communications

 

Test & Measurement

Imagine Communications, IneoQuest, Leader, Phabrix, Rohde & Schwarz, Tektronix

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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Strong Sales in Americas Drives Orad Revenue 27 Percent Higher in 2014

Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 10 2015

orad_Logo

Graphics and media asset management (MAM) provider Orad reported that its revenue for the fourth quarter of 2014 was $10.6m, an increase of 21.7% versus the same period a year ago, and up 1% versus the previous quarter.

Product revenue in Q4 2014 was $8.2m, or 78% of total revenue, an increase of 53.4% versus the 4th quarter of last year when product sales were $5.4m, or 61.9% of total revenue.

Service revenue in Q4 2014 was $2.3m, or 22% of total revenue, a decline of 29.7% versus the 4th quarter of last year when service revenues were $3.3m, or 38.1% of total revenue.

Net income for the quarter was $1.1m versus a net profit of $200,000 during the same period a year ago, and a net profit of $800,000 last quarter.

Gross margins for the quarter were 69.9%, versus 68.6% last year, and 71.1% last quarter.

Operating income for the quarter was $900,000, versus an operating loss of $1.5m during the second quarter of 2013, and operating income of $800,000 last quarter.

Cash, cash equivalents and restricted cash at the end of  December 2014 were $10.4m, compared to $9.1m at the end of September 2014, and compared to $5.7m at the end of December 2013.

 

Full Year 2014 Results

For the full year 2014, Orad’s revenue was $40.5m, up 27.3% versus 2013.

Revenue from Europe was $19.2m, up 38.2% versus 2013.  Europe accounted for 47.3% of total 2014 revenue.  In 2013, revenue from Europe was $13.86m, or 43.6% of total revenue.

Revenue from Asia was $6.5m, a decline of 5.7% versus 2013.  Asia accounted for 16% of total 2014 revenue.  In 2013, revenue from Asia was $6.9m, or 21.6% of total revenue.

Revenue from the Americas was $14.3m, an increase of 44.5% versus 2013. The Americas accounted for 35.3% of total 2014 revenue.  In 2013, revenue from the Americas was $9.9m, or 31.1% of total revenue.

Product sales for year were $31.3m, an increase of 31.5% versus 2013.  Product sales accounted for 77.2% of total revenue in 2014, up from 74.8% in 2013.

Service revenue for 2014 was $9.2m, up 14.9% versus 2013. Service revenue accounted for 22.8% of total revenue in 2014, compared to 25,2% in 2013.

Operating income for 2014 was $4.36m, compared to a loss of $1.6m in 2013.

Net income for 2014 was $3.4m, compared to a net loss of $1.9m in 2013.

Gross Margins for 2014 were 69.7% up from 66.6% in 2013.

Operating expenses for the year were up across the board.

R&D expenses for 2014 were $6.1m, up 3.5% versus 2013. R&D expenses accounted for 15.1% of total revenue in 2014, compared to 18.6% of total revenue in 2013

Sales & marketing expenses for 2014 were $13.8m, up 4.5% versus 2013. Sales & marketing &D expenses accounted for 34.2% of total revenue in 2014, compared to 41.6% of total revenue in 2013

G&A expenses for 2014 were $3.9m, up 9.7% versus 2013. G&A &D expenses accounted for 9.7% of total revenue in 2014, compared to 11.4% of total revenue in 2013

“We are pleased to announce that 2014 has been our most successful year in many aspects,” said Orad CEO Avi Sharir. “Profits have continued to increase, reaching the highest level in the company’s history. Our operating income for 2014 was 10.8% from revenues, far better than our outlook of 8%-10%. We have succeeded in meeting these impressive results thanks to our strong increase in revenues resulting from our wide range of products and solutions, our extensive geographic presence and as a result of our increased efficiency. Our strategy to offer customers comprehensive solutions was very successful with several very significant sales. Orad’s solutions’ offering brings added value to the customer by simplifying his workflow, while offering a one stop shop for the entire solution. Our servers took the forefront this year, penetrating new markets. We are seeing increased interest from existing and new customers, and given the size of the potential market, we are aiming to increase our market share. Our strategy to strengthen our presence in the North American market in 2014 proved successful, doubling our bookings compared to 2013.

 

Outlook:

“I am confident that Orad will continue in 2015 in the same direction as we continue to invest in cutting edge new technologies and increase our presence in existing and new markets,” said Sharir.

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Related Links:

Press Release: Orad Reports Financial Results for the Fourth Quarter and for the for the Full Year of 2014

Orad’s Revenue Jumps 40.7 Percent in Q2 2014

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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Orad’s Revenue Jumps 40.7 Percent in Q2 2014

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 18 2014

Graphics and media asset management (MAM) provider Orad reported that its revenue for the second quarter of 2014 was $10.2m, an increase of 40.7% versus the same period a year ago, and up 9.7% versus the previous quarter.

Product sales in Q2 2014 were $7.5m, or 73.7% of total revenue, an increase of 33.4% versus the 2nd quarter of last year when product sales were $5.6m, or 77.7% of total revenue.

Service revenue in the quarter was $2.68m, or 26.3% of total revenue, an increase of 65.9% versus the 2nd quarter of last year when service revenue was $1.62m, or 22.3% of total revenue.

Net profit for the quarter was $800,000, versus a loss of $1.3m during the same period a year ago, and up 14.2% versus last quarter.

Gross margins for the quarter were 69.3% versus 62.5% last year, and 67.8% last quarter.

Operating income for the quarter was $900,000, versus an operating loss of $1.5m during the second quarter of 2013, and operating income of $800,000 last quarter.

Operating expenses were up across the board.

R&D expense for the quarter was $1.54m, or 15.1% of total revenue, up 5.8% versus the same period a year ago.

Sales & marketing expenses were $3.7m, or 36.4% of total revenue in the quarter, up effectively flat versus the third quarter of 2013, when sales and marketing costs were 51% of total revenue.

G&A expenses in the quarter were $899,000, or 8.8%% of total revenue, up 5.4% from last year.

Cash, cash equivalents and restricted cash at the end of June 2014 amounted to $7.6m compared to $6.4m at the end of March 2014.

 

First Half 2014 Results

For the first six months of 2012, Orad’s revenue was $19.5m, up 35.2% versus the first half of 2013.

Product sales for the first six months of 2014 were $14.8m, or 76.1% of total revenue, an increase of 36.2% versus the same period a year ago, when product sales were $10.9m, or 75.6% of total revenue.

Service revenue for the first six months of 2014 was $4.65m, or 23.9% of total revenue, an increase of 36.2% versus the same period a year ago, when product sales were $10.9m, or 75.6% of total revenue.

Net Profit for the 1H 2012 was $1.5m, versus a loss of $2.2m for the first six months of 2013.  Gross Margins for the first half of 2012 were 68.6%, up from 63.5% for the first six months of 2013.

Operating income for 1H 2012 was $1.7m, compared to a loss of $2.2m for the first half of 2013.

R&D expenses for the first half of 2014 were $3m, or 15.5% of total revenue, up just under 1% versus the first six months of last year when R&D expenses represented 20.7% of total revenue.

Sales & marketing expenses for 1H 2014 were $6.7m, or 34.7% of total revenue, up 3.2%% versus the first half of 2013 when S&M expenses represented 45.5% of total revenue.

G&A expenses in the 1H 2014 were $1.9m, or 9.8% of total revenue, up 9.9% versus the first half of 2013 when G&A expenses represented 12.1% of total revenue.

 

 

Outlook

Orad says that it is expecting its revenue for the full year 2014 to be between $39m and $40m, in line with previous projections. If the company achieves the projected top-line results, it would represent an increase of 22% to 26% compared to 2013.

Full year operating profits for 2014 are expected to be approximately 6% to 8% of revenues, compared to the operating loss of 5% in 2013.

 

“We are pleased to announce the results of this quarter which show the highest level of quarterly revenues in the Company’s history,” said Orad CEO Avi Sharir. “Revenues for the first half of 2014 show an increase of 35% compared to the same period in 2013. This substantial increase in revenues is attributed to the return of our traditional markets and the higher penetration in new markets such as North America. We have recently announced several important sales in North and South America to major American and Brazilian broadcasters. Our efficient and cost effective solutions enable broadcasters to substantially increase their ROI by providing them efficient and cost effective solutions.

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Related Links:

Press Release: Orad Reports Financial Results for the Second Quarter and the first six months of 2014

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

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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2014 Big Broadcast Survey (BBS) Reports Now Available

broadcast industry technology trends, broadcast technology market research, Broadcast Vendor Brand Research, market research, Top Broadcast Vendor Brands | Posted by Joe Zaller
Jul 15 2014

After months of data collection, analysis, and visualization, we have now completed work on the 2014 Big Broadcast Survey (BBS). Reports from this study have now been published and are available from Devoncroft Partners.

If you’re not familiar with the BBS, it’s the most comprehensive annual study of technology end-users in the global broadcast industry. Nearly 10,000 broadcast professionals in 100+ countries participated in the 2014 BBS, making it once again the largest market study of the broadcast industry.

BBS reports have been designed to help readers improve their strategic decision-making, customer engagement, marketing strategy, product planning, and sales execution.  BBS reports are also used frequently for M&A-related activities by both buyers and sellers.

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Three types of 2014 BBS reports are available:

  • 2014 BBS Global Brand Reports:  provides deep insight into how each more than 100 broadcast technology suppliers (see full list below) are perceived by market participants, along with comprehensive benchmarking of broadcast technology vendors on a wide variety of metrics.

 

  • 2014 BBS Product Reports:  provide detailed information from buyers, specifiers, and users of broadcast technology products in 31 separate categories (see full list below)

 

  • 2014 BBS Global Market Report: provides detailed information about industry trends, major projects being planned, products being evaluated for purchase, current and future plant infrastructure, broadcast technology CapEx budgets, and planned deployment of new technologies including 4K, Connected TV, and Social TV.

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If you would like information about these reports and how they can help your business, please get in touch.

 

In addition to these paid-for reports, we will also be publishing highlights from the 2014 BBS on the Devoncroft website.  These articles will be posted on a semi-regular basis, so please check back often.

To receive posts when they are published, just enter your email in the box in the upper right-hand corner of the page.

 

The tables below show the product categories and broadcast technology vendor brands covered in the 2014 BBS.

 

 Product Categories Covered in the 2014 BBS:

2014 BBS -- Product Categories Covered in the 2014 Big Broadcast Survey

 

 

Broadcast Technology Brands Covered in the 2014 BBS:

 

2014 BBS -- All Brands included in 2014 BBS

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.© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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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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Orad Warns of Lower Revenue, Net Loss in Q4 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 27 2013

Graphics and media asset management (MAM) provider Orad disclosed that it expects its Q4 2012 revenue to be in the range of between approximately $ 6.9m and $7.1m, 18% to 21% lower than the third quarter of 2012.

As a result of the lower revenue, the company says it now expects to report a net loss in the range of $600,000 to $800,000 for the fourth quarter of 2012.

The company said its Q4 2012 revenue decline was “largely due to the economic weakening of Orad’s target markets, particularly Europe. The uncertainties in the economic environment have led to lengthening of sales cycles and to delay of some customers’ investment decisions.”

Orad says that it now expects to report a net profit in the range of $1m to $1.2m for the full year 2012, 27% to 34% lower than last year.

This announcement appears to be a continuation of the decline in European revenue that Orad began to experience in the third quarter of 2012.  The company’s revenue in 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. At that time, company CEO Avi Sharir said the company’s Q3 results were impacted by a slowdown in its markets, especially in Europe.

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Related Content:

Press Release: Ad-hoc-Disclosure According to § 15 WpHG

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

Orad Top Line Grows 21% in 2011, Profit up 24%

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

Broadcast technology vendor financials, Quarterly Results | 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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Revenue Up, Profit Down at Orad in Q2 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 23 2012

Graphics and media asset management (MAM) provider Orad reported that its revenue for the second quarter of 2012 was $10.2m, an increase of 17.1% versus the same period a year ago, and up 13% versus the previous quarter.  

The company did not break out revenue from UK-based MAM provider IBIS, which Orad acquired in 2011.

Net profit for the quarter was $638,000, down 26% versus last year, and down 24% versus last quarter. Net profit in the quarter was impacted by an unspecified finance charge of $209,000.

Gross margins for the quarter were 69% versus 70% last year, and 69.2% last quarter.

Operating income for the quarter was $919,000, up 14% versus last year, and up 33% versus the previous quarter.

Operating expenses were up across the board.  R&D expense for the quarter was $1.4m, or 14% of total revenue, up 24% versus the same period a year ago.  Sales & marketing expenses were $3.8m, or 37% of total revenue in the quarter, up 16% versus the second quarter of 2011. G&A expenses in the quarter were $899,000, or 9% of total revenue, up 1% from last year.

The company ended the quarter with 251 employees, up from 247 last quarter; and $9.6m in cash, compared to $17.6m last year and $9.2m last quarter.

 

First Half 2012 Results

For the first six months of 2012, Orad’s revenue was $19.1m, up 14.5% versus the first half of 2011. 

Net Profit for the 1H 2012 was $1.5m, flat with last year.  Gross Margins for the first half of 2012 were 69%, flat with 2011.

Operating income for 1H 2012 was $1.6m, up 27.7% versus last year.

R&D expenses for the first half of 2012 was $2.8m, or 15% of total revenue, up 15% versus the same period a year ago.  Sales & marketing expenses for 1H 2012 were $6.9m, or 36% of total revenue, up 13% versus the first half of 2011. G&A expenses in the 1H 2012 were $1.9m, or 10% of total revenue, up 7% from last year.

 

Orad CEO Avi Sharir said the company finished the first half of 2012 with the highest level of income in its history, and that weak macroeconomic environment in Europe, which accounts for approximately half of Orad’s revenue, had not impacted its results.

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 last quarter.

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Related Content:

Press Release: Orad Results for the second quarter and for six months of 2012 

Previous quarter: Orad Revenue Up 12 Percent in Q1 2012 

More Broadcast Vendor M&A: Orad Buys 63 Percent of MAM Specialist IBIS for $2.11m

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