~Avigilon updates and raises fiscal year 2017 annual guidance~
VANCOUVER, CANADA, November 7, 2017 /CNW/ - Avigilon Corporation ("Avigilon" or the "Company") (TSX: AVO), provider of trusted security solutions, today reported financial results for its third fiscal quarter 2017. All figures are in United States ("US") dollars unless otherwise stated.
Third Quarter 2017 Financial Highlights
- Record revenue of $108.2 million, compared with $95.8 million in Q3 2016.
- Revenue growth of 13% more than doubled the industry's estimated growth rate.
- Strong gross margin percentage* of 51%.
- Record Adjusted EBITDA* of $22.6 million, compared with $16.7 million in Q3 2016.
- Adjusted EBITDA Margin* of 21%, compared with 17% in Q3 2016.
- Record Adjusted Earnings* of $12.9 million, compared with $9.1 million in Q3 2016.
- Record diluted Adjusted EPS* of $0.29, compared with $0.21 in Q3 2016.
- Operating expenses as a percentage of revenue of 39%, compared with 45% in Q3 2016.
"Led by James Henderson, our President and Chief Operating Officer, Avigilon has delivered our best quarter yet," said Alexander Fernandes, Avigilon's Founder, Chief Executive Officer and Chairman of the Board. "Working together, James and I have the operational strength and strategic vision to propel Avigilon to the next level."
"Global demand for Avigilon's solutions is stronger than ever," added Mr. Henderson. "With each quarter, we're consistently demonstrating our ability to couple top line growth with increasing profitability."
Third Quarter 2017 Business Highlights
In the quarter, the Company announced Avigilon Blue, a new subscription-based cloud service platform for security and surveillance, powered by Microsoft Azure. This announcement is a foundational step that will enable the Company's partners and customers to access an expanding selection of subscription service offerings, starting with video surveillance and self-learning video analytics. The platform will connect Avigilon Blue devices to the cloud, enabling users to remotely manage and service sites using powerful subscription management tools and easy to use dashboards. Avigilon Blue is positioned to expand on the Company's current product offering, provide recurring monthly revenue, increase its addressable market, and strengthen its partner channel.
In addition, in the third quarter the Company:
- previewed Avigilon Control Center 6.6, adding new features including the ability to search faces in Avigilon Appearance Search;
- previewed the H4 IR PTZ camera line, combining patented Avigilon self-learning video analytics and infrared technology with a PTZ camera; and
- won a Benchmark Innovation Award for Avigilon Appearance Search technology.
The third quarter generated strong cash flow from operations, allowing the Company to continue to invest in its future success and pay down a meaningful portion of its debt. In addition, the Company continued to progress towards completing the sale and leaseback of the Company's downtown Vancouver office tower and associated land and now expects the transaction to complete in late 2017 or early 2018.
Updated Fiscal 2017 Guidance
Based on its year-to-date performance, Avigilon has updated and raised its fiscal year 2017 guidance as follows:
- Revenue between $400 million and $410 million, tightening the previous range of $390 million to $425 million; and
- Adjusted EBITDA Margin between 17% and 19%, raising the previous range of 13% to 17%.
The foregoing expectations constitute forward-looking statements (as such term is defined in the cautionary statement set out below) and are qualified in their entirety by the cautionary statement set out below.
Avigilon has scheduled a conference call to discuss these results on Tuesday, November 7, 2017, beginning at 5:00 p.m. ET (2:00 p.m. PT). To access the live call, dial 1-888-231-8191 or +1 647-427-7450, or listen to the webcast at http://ir.avigilon.com or http://bit.ly/2yGQ5oG. A replay will be available for 90 days on the Company's website, and for one week by dialing 1-855-859-2056 or +1 416-849-0833, reference number 96212037.
This news release is qualified in its entirety by the Company's consolidated financial statements for the three and nine months ended September 30, 2017 and 2016 and the associated Management's Discussion & Analysis respecting the same period, which can be downloaded from the Avigilon website at http://ir.avigilon.com or from the Company's profile on SEDAR at http://www.sedar.com.
*Non-IFRS and Additional IFRS Financial Measures
In addition to results reported in accordance with International Financial Reporting Standards ("IFRS"), Avigilon uses certain non-IFRS and additional IFRS financial measures as supplemental indicators of its financial and operating performance. Non-IFRS financial measures include "Adjusted EBITDA", "Adjusted EBITDA Margin", "Adjusted Earnings", and "Adjusted Earnings per Share" ("Adjusted EPS"). Additional IFRS financial measures include "gross margin percentage". Management believes that these supplementary financial measures reflect the Company's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends.
The Company defines Adjusted EBITDA and Adjusted EBITDA Margin as earnings and earnings as a percentage of revenue, respectively, before deducting share-based payments, foreign exchange gain or loss, business acquisition-related costs, restructuring costs, non-recurring legal costs, non-recurring lease termination costs, amortization, depreciation, revaluation gain on contingent consideration receivable, interest, and taxes. Management believes that Adjusted EBITDA and Adjusted EBITDA Margin to be useful measures, as they provide an indication of the operational results of our business.
The Company defines Adjusted Earnings as earnings before share-based payments, foreign exchange gain or loss, business acquisition-related costs, financing costs, restructuring costs, non-recurring legal costs, non-recurring lease termination costs, amortization of acquired intangibles, revaluation gain on contingent consideration receivable, and related tax effects. Adjusted EPS is calculated as Adjusted Earnings divided by the basic or diluted weighted average common shares issued and outstanding and does not represent actual earnings per share attributable to shareholders. Management believes that the disclosure of Adjusted Earnings and Adjusted EPS allows investors to evaluate the operational and financial performance of the Company's ongoing business using the same evaluation measures that Management uses, and is therefore a useful indicator of the Company's performance or expected performance of recurring operations. Please refer to the Company's consolidated financial statements for the three and nine months ended September 30, 2017 and 2016 and the reconciliation table within the associated Management's Discussion & Analysis respecting the same period.
The Company defines gross margin percentage as gross profit divided by revenue. Management considers gross margin percentage to be a key measure as it demonstrates the Company's profitability and its ability to cover its operating expenses from normal operations.
Non-IFRS and additional IFRS financial measures do not have standardized meanings prescribed by IFRS, and other companies may calculate these measures differently. The presentation of non-IFRS and additional IFRS financial measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Avigilon Corporation provides trusted security solutions to the global market. Avigilon designs, develops, and manufactures video analytics, network video management software and hardware, surveillance cameras, and access control solutions. To learn more about Avigilon, visit avigilon.com.
© 2017, Avigilon Corporation. All rights reserved. AVIGILON, the AVIGILON logo, AVIGILON APPEARANCE SEARCH, AVIGILON BLUE, AVIGILON CONTROL CENTER, ACC, and TRUSTED SECURITY SOLUTIONS are trademarks of Avigilon Corporation. Other names or logos mentioned herein may be the trademarks of their respective owners.
For further information:
Avigilon Investor Relations
T: (604) 629-5182
The industry's growth rate content in this news release includes information based on IHS Markit, Technology Group, Video Surveillance Intelligence Database, June 2017 and Access Control Intelligence Service, June 2017. Information is not an endorsement of Avigilon. Any reliance on these results is at the third party's own risk. Visit https://technology.ihs.com for more details.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements normally contain words like 'believe', 'expect', 'anticipate', 'plan', 'intend', 'continue', 'estimate', 'may', 'will', 'should', 'ongoing' and similar expressions, and within this news release include, without limitation, the information under the heading "Updated Fiscal 2017 Guidance" and any statements (express or implied) respecting: Avigilon's future plans, strategies, and objectives; projected growth, revenues, gross margin percentage, profitability, expenses, capital expenditures, and earnings; anticipated enhancement and expansion of product offerings, intellectual property portfolio, and associated research and development plans; the impact of proposed product offerings; new product functionality and suitability; the completion of the proposed transaction regarding the Company's downtown office tower and the proceeds thereunder; expected investment and expansion of infrastructure; and the impact of recent changes to Avigilon's senior leadership team. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and allowing investors and others to obtain a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances. The material expectations, assumptions and other factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: Avigilon will be able to successfully execute its plans, strategies and objectives; the business and economic conditions affecting Avigilon's operations will continue substantially in their current state, including with respect to industry conditions, general levels of economic activity, regulations, taxes, interest rates, and foreign exchange rates; there will be no adverse material changes to Avigilon's key personnel, facilities, production capabilities, supply chain, sales channels, reseller network, or contractual arrangements; Avigilon will be able to leverage its past investments to support growth and focus on increasing profitability; Avigilon will be able to successfully manage cash flow, operating expenses, interest expenses, capital expenditures, working capital, and credit, liquidity, and market risks; future financing will be available to Avigilon on favorable terms when and if required; Avigilon will keep pace with or outpace the growth, direction, and technological advancement in its industry; industry data and projections obtained from external sources are accurate and reliable; Avigilon will be able to design, develop, and manufacture new products and enhance its existing product lines; Avigilon's new products will function as intended and will be suitable for the intended end users; Avigilon will be able to enhance and expand its intellectual property portfolio; Avigilon will continue to generate revenues from patent licensing; Avigilon will be able to successfully integrate businesses, intellectual property, products, and technologies that it may acquire, if any; Avigilon will not face any material unexpected costs related to product liability or warranties; Avigilon's protection of its intellectual property against third party infringement or misappropriation is sufficient and its products and technology do not materially infringe third party intellectual property rights; Avigilon will be able to obtain necessary third party licenses on favorable terms; Avigilon will not become involved in unexpected material litigation or otherwise subject to materially adverse claims; Avigilon's plans respecting the pricing of its products and services will proceed in substantially their present form; Avigilon will complete the proposed transaction regarding the Company's downtown office tower on the terms currently proposed; Avigilon will be able to achieve greater economies of scale and cost savings from previous investments in infrastructure and in its global sales and marketing teams; and the changes to Avigilon's senior leadership team will have the intended results.
Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Avigilon's business, as more particularly described in the "Risk Factors" section of Avigilon's Annual Information Form dated February 28, 2017, which is available under Avigilon's profile on SEDAR at www.sedar.com. Additional material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to: unexpected changes to accounting policies, accounting standards or internal controls and procedures over financial reporting; the risks and uncertainties associated with and inherent to the commercial real estate market in Vancouver; and unforeseen events, developments or factors causing any of the aforesaid expectations, assumptions and other factors to be inaccurate or irrelevant. Although Avigilon has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those contained in any forward-looking statement, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated, or intended. Many of these factors are beyond the control of Avigilon. Accordingly, readers should not place undue reliance on forward-looking statements.
Avigilon undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.
SOURCE Avigilon Corporation