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| Avigilon experienced strong year-over-year sales growth in most regions |
Avigilon Corporation, a leader in high-definition (HD) surveillance systems, recently announced its financial results for the three and nine months ended September 30, 2012. All figures are stated in Canadian dollars unless otherwise noted.
Third Quarter 2012 Highlights:
- Revenue was $25.5 million, an increase of 69% over Q3 2011 revenue of $15.1 million.
- Gross margin was 51%, compared with 45% a year earlier.
- EBITDA rose to $4.1 million, compared with Q3 2011 EBITDA of $1.5 million. (See “Non-IFRS Measures” below.)
- Net income was $2.2 million, compared with net income of $1.0 million in Q3 2011.
Year-to-Date 2012 Highlights:
- Revenue was $67.6 million in the first nine months of 2012, an increase of 64% from $41.2 million in the same period last year.
- Gross margin was 49%, up from 44% in the prior year.
- EBITDA was $7.4 million, an increase of 77% over $4.2 million in the first nine months of 2011
- Net income was $4.1 million, an 87% increase compared to $2.2 million a year earlier.
“It was another strong quarter for Avigilon as we delivered record revenues and earnings in a traditionally slower third-quarter sales season,” said Alexander Fernandes, president and chief executive officer at Avigilon. “The third quarter was also highlighted by a $26 million financing, which further strengthens our balance sheet to pursue the significant growth opportunities in global surveillance markets. To capitalize on these opportunities, we are highly focused on adding new talent to our sales team, continuing our track record of product innovation, and investing in marketing to make Avigilon a household name in our industry.”
Financial Review
Avigilon reported revenue of $25.5 million in the three months ended September 30, 2012, an increase of 69% compared with revenue of $15.1 in the third quarter of 2011. Revenue growth continues to be driven by a strong rise in product sales volumes worldwide, reflecting sales of new product offerings, entry into new global markets, and greater customer adoption in existing markets. Avigilon experienced strong year-over-year sales growth in most regions, particularly in areas where the Company expanded sales staff over the past year.
Gross margin was $13.0 million in the third quarter (51% of revenue), compared with $6.9 million (45% of revenue) the previous year. The increased gross margin year over year reflects the sales mix as well as the impact of higher purchasing power and improved manufacturing efficiencies. Given the Company’s near-term objective of rapid growth in revenue and market share, management is actively targeting a gross margin between 45% and 50%.
Selling and marketing expenses were $5.6 million in the third quarter of 2012, a $2.2 million, or 64% increase from a year earlier. The increase reflects planned growth spending to significantly expand the global sales team and marketing efforts, which the Company expects will drive future revenue growth.
Research and development (R&D) expenses, net of related income tax credits, were $1.2 million in the third quarter of 2012, a $0.4 million increase compared to $0.8 million in the prior year’s third quarter. Gross R&D spend was $1.7 million in the third quarter of 2012, compared to $1.1 million in the prior year. The increase in spending is due to additional new hires, in line with the Company’s plan to increase the product development team to enhance its product offering.
General and administrative expenses were $2.7 million in the third quarter, an increase of $1.3 million from a year earlier. The increase was primarily due to additional personnel and their related expenses to support Avigilon’s growth and its status as a public company.
EBITDA was $4.1 million in the third quarter, an increase of 173% over the prior year, reflecting increased revenue and lower cost of sales. Net income in Q3 2012 was $2.2 million, compared with net income of $1.0 million in the same period last year. Earnings per share were $0.07 (basic) and $0.06 (diluted) for the third quarter of 2012, compared to $0.06 (basic) and $0.04 (diluted) a year earlier. At September 30, 2012, Avigilon had 36,174,099 basic and 41,863,699 diluted shares outstanding.
Financial statements can be downloaded from the Avigilon website at http://ir.avigilon.com or SEDAR athttp://www.sedar.com/.
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