Avigilon Corporation Announces 2011 Year-end and Fourth Quarter Results

VANCOUVER, Feb. 29, 2012 /CNW/ - Avigilon Corporation (TSX: AVO), a leader in high-definition (HD) surveillance systems, today announced its financial results for the fiscal year and three months ended December 31, 2011. All figures are stated in Canadian dollars unless otherwise noted.

Fourth Quarter 2011 Highlights

  • Revenue was $18.8 million in Q4 2011, an increase of 86% over Q4 2010 revenue of $10.2 million.
  • Gross margin was 51%, compared to 46% in Q4 2010.
  • EBITDA was $2.3 million, an increase of $1.9 million from $0.4 million in Q4 2010. (See "Non-IFRS Measures" below.)
  • Net income was $1.6 million, compared to a net loss of $0.2 million in Q4 2010.

Fiscal Year 2011 Highlights

  • Revenue was $60.0 million in fiscal 2011, an increase of 86% from $32.3 million in 2010.
  • Gross margin was 46%, compared to 45% the prior year.
  • EBITDA was $6.6 million, up 132% from $2.8 million in 2010.
  • Net income was $3.8 million, compared to $1.0 million in 2010.
  • In November 2011, Avigilon completed a $26 million financing transaction, raising gross proceeds of $21 million in an Initial Public Offering (IPO) and proceeds of $5 million in a Secondary Offering, and listed its shares on the Toronto Stock Exchange.

"Our strong growth is a testament to Avigilon's innovative and industry-leading technology in the growing global HD video surveillance market," said Alexander Fernandes, president and chief executive officer, Avigilon. "In keeping with the strategy we outlined during our IPO last fall, we are actively investing in sales, marketing and R&D in 2012 to accelerate our growth."

Financial Review

Avigilon's revenue was $60.0 million for the year ended December 31, 2011, an increase of $27.7 million or 86% compared to $32.3 million of revenue in fiscal 2010. The increase in revenue was a result of new product offerings, expansion into new markets, and ever increasing customer awareness and acceptance in existing markets. In 2011, the Company expanded the North American, EMEA (Europe, Middle East and Africa) and Latin American sales teams to meet the growing demand for the Company's high-definition surveillance solution. Avigilon also added a global gaming security expert to the team to target the substantial and fast-growing casino surveillance market. Key customer wins in the casino, retail, stadium, transportation, hospitality and critical infrastructure industries also contributed to increased revenue in 2011.

In addition to growing personnel to keep up with customer demand, Avigilon expanded its product portfolio to include:

  • The industry's highest resolution HD surveillance camera. The 29MP can replace up to 95 analog cameras and integrates seamlessly with the Avigilon Control Center software. Avigilon now offers the broadest range of HD surveillance cameras.
  • Two new cameras in the popular H.264 HD camera series for greater coverage, enhanced performance in low-light conditions and a smaller form factor.
  • The award-winning H.264 Analog Video Encoder that delivers the industry's most cost-effective upgrade path to HD surveillance.
  • Avigilon Control Center Core designed specifically for small and medium businesses a growing HD video surveillance segment.
  • Avigilon Control Center Mobile allowing security professionals remote access to HD surveillance video via Apple and Android phone and tablet devices.

Gross margin was $27.6 million in fiscal 2011, an increase of $13.0 million or 90% from $14.6 million the previous year. As a percentage of revenue, gross margins were 46% in 2011 compared to 45% in 2010, largely due to a change in sales mix towards higher margin products.

Selling and marketing expenses were $12.8 million in 2011, a $6.0 million increase from $6.8 million the previous year. The increase was primarily due to higher sales volumes, additional personnel and their related expenses, and an expanded marketing program launched partway through the year.

Research and development expenses, net of related income tax credits, were $3.1 million for the year, a $0.7 million increase compared to 2010.

General and administrative expenses were $5.9 million in 2011, up $2.9 million from $2.9 million of G&A expense in 2010. The increase was primarily due to additional personnel and their related expenses to support Avigilon's growth.

EBITDA was $6.6 million in 2011, an increase of $3.8 million or 132% compared to $2.8 million in 2010. The increase was largely due to the increased revenues during the year.

Net income for the year was $3.8 million, an increase of $2.9 million compared to net income of $1.0 million in 2010. Earnings per share were $0.20 (basic) or $0.14 (diluted) in 2011, compared to $0.06 (basic) or $0.05 (diluted) the previous year. Avigilon's basic share count at December 31, 2011 was 31,021,287.

Financial statements can be downloaded from the Avigilon website at http://ir.avigilon.com or SEDAR at http://www.sedar.com/.

Conference Call

Avigilon has scheduled a conference call to discuss these results on Wednesday, February 29, 2012, beginning at 5:00 p.m. EST (2:00 p.m. PST). To access the call, dial 647-427-7450 or 1-888-231-8191, or view the webcast at http://ir.avigilon.com. A replay will be available for one year on the Company's website, and for one week by dialing 416-849-0833 or 1-855-859-2056, reference number 53775188.

Non-IFRS Measures

The term "EBITDA" refers to earnings before deducting interest, taxes, depreciation, amortization, foreign exchange gain or loss, and stock-based compensation. Management believes that EBITDA is a useful measure as it provides an indication of the operational results of the business prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset amortization. EBITDA does not have a standardized meaning prescribed by International Financial Reporting Standards (IFRS) and is not necessarily comparable to similar measures provided by other companies. Accordingly, investors are cautioned that EBITDA should not be construed as an alternative to operating income or net income determined in accordance with IFRS as an indicator of the Company's financial performance or as a measure of its liquidity and cash flows.

About Avigilon

Avigilon is a leader in the design, manufacturing and marketing of high-definition, network-based video surveillance systems and equipment for the global security market. The Avigilon surveillance system has been designed to provide high quality video capture, transmission, recording and playback. The components of the Avigilon system include cameras, recording hardware and software which may be sold separately or in combination to provide customers with a customizable, open, end-to-end video surveillance solution.

Forward Looking Statements

Certain statements contained in this news release, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws.  Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things those risks identified in Avigilon's prospectus filed on SEDAR at www.sedar.com.

Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of Avigilon. Accordingly, readers should not place undue reliance on forward-looking statements or information. Avigilon undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.

Avigilon Corporation
Consolidated statements of comprehensive income
for the year ended December 31, 2011 and 2010
(Expressed in thousands of Canadian dollars except number of shares and per share data)



 

 

 Year ended

 

 

 December 31,

 

 December 31,

 

 Note

2011

 

2010

 

 

 $

 

 $

 

 

 

 

 (Note 20)

 

 

 

 

 

 

 

 

 

 

Sales

 

60,033

 

32,284

Cost of sales

 

(32,394)

 

(17,713)

 

 

27,639

 

14,571

 

 

 

 

 

Operating expenses

 

 

 

 

Selling and marketing
 

12,777

 

6,758

Research and development
 

3,066

 

2,424

General and administrative
 

5,892

 

2,919

Amortization
 

169

 

233

 

 

21,904

 

12,334

 

 

 

 

 

Operating income

 

5,735

 

2,237

 

 

 

 

 

Other income (expense)

 

 

 

 

Accretion expense
 

(470)

 

(549)

Interest and other, net
 

(93)

 

34

Foreign exchange gain
 

311

 

(157)

 

 

(252)

 

(672)

 

 

 

 

 

Income before income taxes

 

5,483

 

1,565

Deferred income tax expense

10(b)

(1,654)

 

(601)

Net income and total comprehensive income

 

3,829

 

964

 

 

 

 

 

Earnings per share

 14(e)

 

 

 

Basic
 

0.20

 

0.06

Diluted
 

0.14

 

0.05

 

 

 

 

 

Weighted average number of shares outstanding (000's)

 14(e)

 

 

 

Basic
 

19,234

 

17,144

Diluted
 

30,770

 

27,937

The accompanying notes are an integral part of the financial statements.

Avigilon Corporation
Consolidated statements of financial position
as at December 31, 2011, 2010 and January 1, 2010
(Expressed in thousands of Canadian dollars except number of shares and per share data)


 

 

 

 December 31,

 December 31,

 January 1,

 

 

Note

2011

2010

2010

 

 

 

$

 $

 $

 Assets

 

 

 

 (Note 20)

 (Note 20)

Current assets

 

 

 

 

 


Cash

 

 

12,418

2,330

2,241


Trade and other receivables

 

16(a)

13,291

7,653

4,628

Inventories
 

6

11,254

5,307

2,653

Other financial assets
 

8

88

-

-

Prepaid expenses and deposits
 

 

605

308

276

Research tax credits
 

10(a)

973

579

988

 

 

 

38,629

16,177

10,786

Non-current assets

 

 

 

 

 

Property and equipment
 

7

2,304

1,495

328

Intangible assets
 

 

46

27

2

Deposits
 

9

272

26

30

Deferred tax assets
 

10

1,703

1,999

2,462

 

 

 

42,954

19,724

13,608

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables
 

 

7,765

4,644

2,576

Bank loan
 

12

-

1,760

-

Short-term leasehold incentive
 

13

59

-

-

 

 

 

7,824

6,404

2,576

Non-current liabilities

 

 

 

 

 

Long-term leasehold incentive
 

13

279

-

-

Preferred shares
 

11

-

10,336

9,788

 

 

 

8,103

16,740

12,364

Shareholders' equity

 

 

 

 

 

Capital stock

 

14

37,251

9,559

8,976

Equity compensation reserve

 

 

4,099

3,753

3,560

Deficit

 

 

(6,499)

(10,328)

(11,292)

 

 

 

34,851

2,984

1,244

 

 

 

42,954

19,724

13,608

 

 

 

 

 

 

The accompanying notes are an integral part of the financial statements.

Approved by the Board and authorized for issue on February 29, 2012.

 

 

 

 

 

 

 

 
 
 

 

 

 

 

Alexander Fernandes, Director

 

 


 Bruce Marginson, Director

 

Avigilon Corporation 
Consolidated statements of changes in equity
for the year ended December 31, 2011 and 2010
(Expressed in thousands of Canadian dollars except number of shares and per share data)


 

 

 

 

 

 

 

 

 

 Equity

 

 Total

 

Common stock

compensation

 

shareholders'

 

 Shares

 Amount

 reserve

 Deficit

 equity

 

 

 $

 $

 $

 $

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2010

 16,998,202

8,976

3,560

(11,292)

1,244

Net income and total comprehensive income

-

-

-

964

964

Share issue costs

-

(65)

-

-

(65)

Share-based payments

-

-

193

-

193

Issuance of common stock

250,000

500

-

-

500

Deferred income tax effect on share issuance cost


 -


148


-


-


148

Balance, December 31, 2010

17,248,202

9,559

3,753

(10,328)

2,984

Net income and total comprehensive income

-

-

-

3,829

3,829

Share issue costs

-

(3,022)
 
-

(3,022)

Share-based payments

-

-

346

-

346

Conversion of preferred shares

9,148,639

9,149

-

-

9,149

Issuance of common stock

4,624,446

20,810

-

-

20,810

Deferred income tax effect on share issuance cost


 -


755


-


-


755

Balance, December 31, 2011

 31,021,287

37,251

4,099

(6,499)

34,851

The accompanying notes are an integral part of the financial statements.

Avigilon Corporation
Consolidated statements of cash flows
for the year ended December 31, 2011 and 2010
(Expressed in thousands of Canadian dollars except number of shares and per share data)

 

 

 Year ended

 

 

 December 31,

 

 December 31,

 

Note

2011

 

2010

 

 

 $

 

 $

 

 

 

 

 (Note 20)

Cash flows from operating activities

 

 

 

 

Net income for the year

 

3,829

 

964

Adjustments for non-cash items

 

 

 

 

Amortization
 

428

 

344

Write off of property and equipment
 

102

 

-

Share-based payments
 

346

 

193

   
Accretion expense
 

470

 

549

Deferred income tax expense
10(b)

1,186

 

749

Unrealized foreign exchange (gain) loss
 

(156)

 

25

Interest expense (income)
 

93

 

(34)

 

 

6,298

 

2,790

Movements in working capital

 

 

 

 

(Increase) in trade and other receivables
 

(5,279)

 

(3,095)

(Increase) in inventories
6

(5,947)

 

(2,654)

(Increase) in prepaid expenses and deposits
 

(298)

 

(32)

(increase) decrease in research tax credits
 

(394)

 

409

 Increase in trade and other payables
 

2,658

 

2,083

Net movements in working capital

 

(9,260)

 

(3,289)

Interest (paid) received

 

(93)

 

34

Income taxes paid

 

(134)

 

(138)

Net cash used in operating activities

 

(3,189)

 

(603)

Cash flows from investing activities

 

 

 

 

Purchase of property and equipment
 

(1,306)

 

(1,489)

Disposal of property and equipment
 

-

 

-

Purchase of intangible assets
 

(52)

 

(47)

(Increase) decrease in deposits
9

(246)

 

4

Net cash used in investing activities

 

(1,604)

 

(1,532)

Cash flows from financing activities

 

 

 

 

(Repayment of) proceeds from bank loan
12

(1,760)

 

1,760

Issuance of common stock
14

20,810

 

500

Share issuance costs
 

(2,551)

 

(65)

Dividends paid on redeemable preferred shares
 

(1,658)

 

-

Net cash provided by financing activities

 

14,841

 

2,195

Effect of foreign exchange rate changes on cash

 

39

 

29

Increase in cash

 

10,088

 

89

Cash, beginning of year

 

2,330

 

2,241

Cash, end of year

 

12,418

 

2,330

The accompanying notes are an integral part of the financial statements.

SOURCE Avigilon Corporation

For further information:

Investor relations:
Jeff Codispodi, The Equicom Group
T: (416) 815-0700 ext. 261
jcodispodi@equicomgroup.com   

Media relations:
Angela St-Amour, Avigilon Corporation
T: (604) 629-5182, ext. 2172  
angela.stamour@avigilon.com


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