Haivision continues to increase gross
margins and delivers 18.2%
year over year revenue growth
MONTREAL, Sept. 13,
2023 /PRNewswire/ - Haivision Systems
Inc. ("Haivision" or the "Company")
(TSX: HAI), a leading global provider of mission critical,
real-time video networking and visual collaboration solutions,
today announced its results for the third quarter ended
July 31, 2023.
"As demonstrated by our year over year growth, we have been able
to take advantage of significant synergistic revenue opportunities
from our two recent acquisitions. This growth is even more
impressive when you consider that we exited the managed services
business in April 2023" said
Mirko Wicha, Chairman and CEO of
Haivision. "The demand for mission critical visual collaboration
systems is robust demonstrated by significant wins and a solid
pipeline, and we continue to see the opportunity globally for our
5G bonded cellular contribution transmitters."
Q3 2023 Financial
Results
- Revenue of $35.0 million
represents an increase of 18.2% from prior year.
- Gross margins* were 71.9%, a noteable improvement from 66.1%
the prior year.
- Total expenses were $25.6
million, an increase of $1.2
million, but included a non-recurring restructuring charge
of $1.5 million.
- Operating loss was $0.5 million,
a $4.3 million improvement from the
prior year.
- Adjusted EBITDA was $4.3 million,
a $5.9 million improvement from the
prior year.
- Adjusted EBITDA Margins was 12.4%, a significant improvement
compared to a negative 5.4% in the prior year.
- Net loss was $0.9 million, a
$3.4 million improvement from the
prior year.
Financial Results for the nine
months ended July 31, 2023
- Revenue of $104.2 million
represents an increase of 18.8% from the prior year.
- Gross margins* were 69.1%, marginally lower compared to 69.6%
the prior year.
- Total expenses were $74.7 million
an increase of $9.4 million from the
prior year.
- Operating loss was $2.4 million,
a $2.4 million or a 50% improvement
from the prior year.
- Adjusted EBITDA* was $9.1
million, a $5.9 million or a
54% improvement from the prior year.
- Adjusted EBITDA Margin* was 8.7% or a 141% improvement compared
to 3.6% the prior year.
- Net loss was $3.8 million, a
$1.2 million improvement when
compared to the prior year.
Key Company Highlights
- Haivision unveiled a compelling new user interface for the
Makito X4 video encoder, streamlining workflows and the user
experience, along with a single channel Makito X4 delivering
4K encoding at an industry leading
new level of price performance and a Makito FX for ultra-low
latency 4K video and computer
graphics encoder for mission critical applications..
- Haivision StreamHub receivers and Haivision Pro460 transmitters
awarded NAB Product of the Year award for remote production at the
centennial NAB show in Las Vegas,
and StreamHub won the TVBEurope Best in Show award.
- With Haivision Pro Series transmitters and StreamHub receivers,
Haivision client SpaceLabs, won the Innovation Award for
Sports Broadcasting at the inaugural Asia-Pacific Broadcasting+
Awards for Malaysian football remote production.
- Announced key Command 360 / Command Center deployments at
Cleveland Department of Public Safety Emergency Operations Center
(EOC) and ALERTCalifornia Emergency Communications Center
(ECC).
- With YouTube, Haivision hosted the annual SRT InterOp
Plugfest, with the SRT community executing 2,257 individual
device-to-device compatibility tests proving widespread industry
adoption.
"We have now completed our restructuring exercise and are well
on our way to fully integrating the two recent acquisitions." said
Dan Rabinowitz, Chief Financial
Officer and EVP, Operations. "Although our third quarter financial
performance still includes costs that will not be part of our
fourth quarter cost structure, our Adjusted EBITDA margin of 12.4%
in the period begins to demonstrate the overall earning potential
of our business.
Financial Results
Revenue for the three months and nine months ended July 31, 2023 was $35.0
million and $104.1 million,
respectively, an increase of $5.4
million or 18.2% and $16.4
million or 18.6%, when compared to the prior year
comparative periods. As Aviwest was acquired in April of
2022, Haivision witnessed sound organic growth in the quarter from
all segments of the business. . Gross Margins* for the three
months and nine months ended July 31,
2023 were 71.9% and 69.1%, respectively compared to
66.1% and 69.0% for the prior year comparable periods. Gross
Margins* were positively impacted by price increases initiated last
year, decreases in the incremental costs of components procured
during the world wide component shortage, and our decision to exit
the managed services business which historically operated at lower
gross margins.
Total expenses for the three months and nine months ended
July 31, 2023 were $25.6 million and $74.4
million, respectively representing increases of $1.2 million and $9.1
million when compared to the prior year comparative periods.
The increase in total expenses in the quarter is largely
related to restructuring costs of $1.5
million in the period as we continue to squeeze synergies
from the recent acquisitions. The total expenses for the nine-month
period ended July 31st,
not only includes the $1.5 million
restructuring costs, but includes expenses related to the
acquisition of Aviwest in April 2022,
including incremental depreciation and amortization expenses of
$2.3 million.
Net loss for the three months and nine months ended July 31, 2023 was $0.9
million and $3.8 million,
respectively and represents improvements of $3.4 million and $1.3
million when compared to the prior year comparative periods,
Adjusted EBITDA* for the three months and nine months ended
July 31, 2023 was $4.3 million and $9.1
million, respectively, improvements of $5.9 million in each of the prior year
comparative periods.
*Represents a non-IFRS measure. For the relevant
definition, see "Non-IFRS Measures" below. As applicable, a
reconciliation of this non-IFRS measure to the most directly
comparable IFRS financial measure is included in the tables at the
end of this press release and in the Company's management's
discussion and analysis for the three months and nine months ended
July 31, 2023.
Conference Call
Notification
Haivision will hold a conference call to discuss its third
quarter financial results on Wednesday, September 13, 2023 at
5:30 pm (ET). To register for the
call, please use this link
https://conferencingportals.com/event/OTBDlmaj. After registering,
a confirmation will be sent through email, including dial in
details and unique conference call codes for entry.
Financial Statements, Management's
Discussion and Analysis and Additional Information
Haivision's unaudited interim condensed consolidated financial
statements for the third quarter ended July
31, 2023 (the "Q3 Financial Statements"), the
management's discussion and analysis thereon and additional
information relating to Haivision and its business can be found
under Haivision's profile on SEDAR at www.sedar.com. The financial
information presented in this release was derived from the Q3
Financial Statements.
Forward-Looking
Statements
This release includes "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of applicable securities laws,
including, without limitation, statements regarding the Company's
growth opportunities and its ability to execute on its growth
strategy. In some cases, but not necessarily in all cases,
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "targets", "expects"
or "does not expect", "is expected", "an opportunity exists", "is
positioned", "estimates", "intends", "assumes", "anticipates" or
"does not anticipate" or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might", "will" or "will be taken", "occur" or
"be achieved". In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances contain forward-looking statements.
Forward-looking statements are not historical facts, nor guarantees
or assurances of future performance but instead represent
management's current beliefs, expectations, estimates and
projections regarding future events and operating performance.
Forward-looking statements are necessarily based on opinions,
assumptions and estimates that, while considered reasonable by
Haivision as of the date of this release, are subject to inherent
uncertainties, risks and changes in circumstances that may differ
materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ, possibly materially, from those indicated by the
forward-looking statements include, but are not limited to, the
risk factors identified under "Risk Factors" in the Company's
latest annual information form, and in other periodic filings that
the Company has made and may make in the future with the securities
commissions or similar regulatory authorities in Canada, all of which are available under the
Company's SEDAR profile at www.sedar.com. These factors are not
intended to represent a complete list of the factors that could
affect Haivision. However, such risk factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. You should not place undue
reliance on forward-looking statements, which speak only as of the
date of this release. Haivision undertakes no obligation to
publicly update any forward-looking statement, except as required
by applicable securities laws.
Non-IFRS Measures
Haivision's consolidated financial statements for the third
quarter ended July 31, 2023 are
prepared in accordance with International Financial Reporting
Standards ("IFRS"). This press release makes reference to certain
non-IFRS measures, including "EBITDA", "Gross Margin", "Adjusted
EBITDA" and "Adjusted EBITDA Margin". These measures are not
recognized measures under IFRS and do not have a standardized
meaning prescribed by IFRS, and are therefore unlikely to be
comparable to similar measures presented by other companies.
Accordingly, these measures should not be considered in isolation
or as a substitute for analysis of our financial information
reported under IFRS. Rather, these non-IFRS measures are used to
provide investors with supplemental measures of our operating
performance and thus highlight trends in our core business that may
not otherwise be apparent when relying solely on IFRS measures. We
also believe that securities analysts, investors and other
interested parties frequently use non-IFRS measures in the
evaluation of issuers. Our management also uses non-IFRS measures
to facilitate operating performance comparisons from period to
period, to prepare annual operating budgets and forecasts and to
determine components of management compensation.
Adjusted EBITDA is a supplemental measure used by management to
assess the financial performance of our business. Adjusted EBITDA
is also a key metric that management uses prior to execution of any
strategic investing or financing opportunity. "EBITDA" is defined
as earnings (loss) before income taxes, depreciation, amortization
and financial expenses and "Adjusted EBITDA" is defined as EBITDA,
as adjusted for stock-based compensation and certain non-recurring
expense items. "Adjusted EBITDA Margin" represents Adjusted EBITDA
divided by revenue. "Gross Margin" represents gross profit divided
by revenue.
A reconciliation of EBITDA and Adjusted EBITDA to Net income
(loss) is included in the tables at the end of this press release
and in the Company's management discussion and analysis for the
three months and nine months ended July 31,
2023.
About Haivision
Haivision is a leading global provider of mission-critical,
real-time video streaming and visual collaboration solutions. Our
connected cloud and intelligent edge technologies enable l
organizations globally to engage audiences, enhance collaboration,
and support decision making. We provide high quality, low latency,
secure, and reliable live video at a global
scale. Haivision open sourced its award-winning SRT low
latency video streaming protocol and founded the SRT Alliance to
support its adoption. Awarded four Emmys® for Technology and
Engineering from the National Academy of Television Arts and
Sciences, Haivision continues to fuel the future of IP
video transformation. Founded in 2004, Haivision is
headquartered in Montreal and
Chicago with offices, sales, and
support located throughout the Americas, Europe, and Asia. Learn more at haivision.com.
Thousands of Canadian
dollars (except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
July
31,
|
|
Nine months
ended
July
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
|
|
|
|
|
Revenue
|
34,954
|
|
29,574
|
|
104,132
|
|
87,794
|
Cost of
sales
|
9,826
|
|
10,012
|
|
32,133
|
|
27,232
|
Gross
profit
|
25,128
|
|
19,562
|
|
71,999
|
|
60,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Sales and
marketing
|
7,823
|
|
7,968
|
|
23,339
|
|
20,584
|
Operations and
support
|
3,820
|
|
3,283
|
|
11,409
|
|
8,710
|
Research and
development
|
7,236
|
|
8,351
|
|
22,542
|
|
22,086
|
General and
administrative
|
4,740
|
|
4,164
|
|
14,036
|
|
11,905
|
Share-based
payment
|
449
|
|
611
|
|
1,545
|
|
2,060
|
Restructuring
costs
|
1,546
|
|
—
|
|
1,546
|
|
—
|
|
25,615
|
|
24,377
|
|
74,417
|
|
65,345
|
|
|
|
|
|
|
|
|
Operating Profit
(loss)
|
(486)
|
|
(4,815)
|
|
(2,417)
|
|
(4,784)
|
Financial
expenses
|
393
|
|
308
|
|
1,337
|
|
654
|
Income (loss) before
income taxes
|
(880)
|
|
(5,123)
|
|
(3,754)
|
|
(5,438)
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
|
|
|
|
|
Current
|
(388)
|
|
23
|
|
(242)
|
|
322
|
Deferred
|
371
|
|
(904)
|
|
283
|
|
(676)
|
|
(17)
|
|
(882)
|
|
40
|
|
(354)
|
|
|
|
|
|
|
|
|
Net
loss
|
(863)
|
|
(4,241)
|
|
(3,795)
|
|
(5,085)
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(2,670)
|
|
(979)
|
|
(2)
|
|
483
|
Comprehensive income
(loss)
|
(3,533)
|
|
(5,220)
|
|
(3,797)
|
|
(4,602)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
|
|
|
|
|
|
Net income (loss)
per share (basic and diluted)
|
$(0.03)
|
|
$(0.15)
|
|
$(0.13)
|
|
$(0.18)
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
29,004,453
|
|
28,878,054
|
|
28,964,172
|
|
28,846,780
|
Diluted
|
29,004,453
|
|
28,878,054
|
|
28,964,172
|
|
28,846,780
|
Thousands of Canadian
dollars
|
|
As at
|
|
July 31,
2023
|
|
October 31,
2022
|
|
|
$
|
|
$
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash
|
7,478
|
|
5,773
|
|
Trade and other
receivables
|
19,060
|
|
26,711
|
|
Income taxes
receivable
|
723
|
|
—
|
|
Investment tax credits
receivable
|
3,826
|
|
3,000
|
|
Inventories
|
18,698
|
|
21,056
|
|
Prepaid expenses
|
4,899
|
|
5,125
|
|
|
54,684
|
|
61,665
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Property and
equipment
|
3,505
|
|
3,808
|
|
Right-of-use
assets
|
7,594
|
|
8,948
|
|
Intangible
assets
|
17,830
|
|
23,500
|
|
Goodwill
|
44,422
|
|
44,599
|
|
Non-refundable
investment tax credits receivable
|
3,459
|
|
3,298
|
|
Deferred income
taxes
|
2,358
|
|
2,778
|
|
|
79,168
|
|
86,931
|
|
|
133,852
|
|
148,596
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Line of credit
|
5,551
|
|
11,173
|
|
Trade and other
payables
|
13,079
|
|
17,841
|
|
Restructuring costs
payable
|
813
|
|
1,670
|
|
Purchase price
payable
|
202
|
|
1,985
|
|
Income taxes
payable
|
—
|
|
42
|
|
Current portion of lease
liabilities
|
1,619
|
|
1,538
|
|
Current portion of term
loans
|
1,195
|
|
1,389
|
|
Deferred revenue
|
11,798
|
|
9,246
|
|
|
34,256
|
|
44,884
|
|
Non-current
liabilities
|
|
|
|
|
Lease liabilities
|
6,955
|
|
8,258
|
|
Term loans
|
1,825
|
|
2,617
|
|
Deferred revenue
|
3,060
|
|
2,587
|
|
|
46,096
|
|
58,345
|
|
Equity
|
|
|
|
|
Share
capital
|
90,902
|
|
90,176
|
|
Deficit
|
(12,635)
|
|
(9,195)
|
|
Stock option
reserve
|
4,786
|
|
4,565
|
|
Foreign currency
translation reserve
|
4,702
|
|
4,704
|
|
|
87,756
|
|
90,251
|
|
|
133,852
|
|
148,596
|
|
Thousands of Canadian
dollars
|
|
|
|
|
|
|
|
|
|
Three months
ended
July
31,
|
|
Nine months
ended
July
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
Net Income
(loss)
|
(863)
|
|
(4,241)
|
|
(3,795)
|
|
(5,085)
|
Income
Taxes
|
(17)
|
|
(882)
|
|
40
|
|
(354)
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
(880)
|
|
(5,123)
|
|
(3,754)
|
|
(5,438)
|
|
|
|
|
|
|
|
|
Depreciation
|
768
|
|
728
|
|
2,315
|
|
1,838
|
Amortization
|
2,053
|
|
1,881
|
|
6,091
|
|
4,022
|
Financial
expenses
|
393
|
|
308
|
|
1,337
|
|
654
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
2,335
|
|
(2,206)
|
|
5,988
|
|
1,076
|
|
|
|
|
|
|
|
|
Share-based payments
(LTIP)
|
449
|
|
611
|
|
1,545
|
|
2,060
|
Restructuring
costs
|
1,546
|
|
—
|
|
1,546
|
|
—
|
Adjusted
EBITDA(1)
|
4,330
|
|
(1,595)
|
|
9,079
|
|
3,136
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
12.4 %
|
|
(5.4) %
|
|
8.7 %
|
|
3.6 %
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
(1) Non-IFRS measure.
See "Non-IFRS Measures".
|
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SOURCE Haivision Systems Inc.