RNS Number:6099E
Vigilant Technology
28 September 2007
Vigilant Technology Limited
Results for H1/2007
Vigilant Technology Limited ("Vigilant" or the "Company"), the AIM-listed
Company (VGT), which designs and manufactures sophisticated, "intelligent"
solutions for the high-end CCTV security and surveillance market, today
announces its results for the first half of 2007.
Highlights
* Revenues of $3 million (H1/2006: $0.98 million) - up 207%
* Sales in UK of $1.75 million (H1/2006:$0.28million) - up 522%
* Operating loss of $3.5m (H1/2006 - $ 3.4m) and net loss of $3.5m
(H1/2006 $1.9m and $11.3m for year 2006)
* Strong backlog to fulfil by the end of 2007
Moshit Yaffe-Blushinksy, Chief Executive Officer, commenting on the results
announcement said: "As we expected, our sales have revived as the Company saw
the first fruits of the significant investments made during 2006. We have ended
this period with a strong pipeline and new opportunities generated as a result
of our growing reputation as a leading provider globally of intelligent IP
surveillance and security solutions.
The Company has demonstrated in the first half of 2007 that it is on track to
achieve its 2007 revenue objectives."
For further information, please contact:
Vigilant Technology Limited +972 3 6491110
Moshit Yaffe-Blushinsky - CEO
Eran Edri - CFO
Shore Capital - Nominated adviser to the Company +44 (0)20 7408 4090
Graham Shore/Dru Danford
Citigate Dewe Rogerson +44 (0)20 7638 9571
David Westover/Hannah Seward
Notes to Editors
* Vigilant Technology is a worldwide leading provider and manufacturer
of intelligent IP surveillance and security solutions for mission-critical
applications. The focus is on adding value to the video that is captured by
customers' CCTV networks.
* The company offers a turn key solution including video servers, DVR/ NVRs,
intelligent real-time video content analysis and sophisticated, proactive
control centre solutions.
* Vigilant has a worldwide customer base and is globally supporting tens of
thousands of cameras in airports, governmental sites, financial
institutions, correctional facilities, casinos, city centres and others.
Also, the company enables these demanding environments to gain maximum
benefit from today's digital video recording cutting-edge technology.
* Vigilant Technology was listed on AIM on 20th December 2005.
Visit www.VGLNT.com for more information.
Statement from the Chairman and the Chief Executive
Financial Overview
Revenues for H1/2007 were $3.02 million (H1/2006: $0.98 million). These revenues
are substantially higher than the previous year and are an indication of the
progress Vigilant has made. In addition, the Company had a back-log of $1.2
million at 30 June 2007.
Gross profit for the period rose from $0.3m in H1/2006 to $1.1m in H1/2007 as a
result of the increase in revenues.
The Company recorded an operating loss for the period ended 30 June 2007 of $3.5
million, compared to an operating loss of $3.4million in H1/2006. This reflected
the substantial extra expenditure on sales and marketing which increased from
$1.5 million in H1/2006 to $2.3 million in H1/2007 as we established a direct
salesforce internationally. R&D expenses and general and administrative
expenses remained broadly at the same level.
The Company recorded a basic and diluted loss per share for H1/2007 of $0.062
per share ($0.033 per share in H1/2006).
The Company has reduced its overheads by $100,000 per month, with effect in
large part from October 2007.
The balance sheet as at 30 June 2007 showed shareholders' equity of $2.1
million, compared to $5.6 million at the end of December 2006. This decrease
reflects the Company's net loss of $3.5 million for the period.
The company is in the process of negotiating with its insurers for compensation
for inventory lost as a result of the fire damage in its warehouse.
Business Review
Product Development
In order to implement its strategy of delivering innovative, end-to-end video
surveillance solutions for high-end security applications, Vigilant invested
heavily in product development during 2006 in 3 principal areas:
* Open IP architecture - Vigilant has developed a core solution architecture
that is designed for the open IP environment.
* Surveillance centre solution - Vigilant has released its NetView solution,
an innovative surveillance centre control application.
* Intelligent video solution - in response to the growing need for automated
initial surveillance of video to enable surveillance staff to concentrate on
possible incidents, Vigilant has developed a market-leading module which
analyses the content of video as an integrated part of its solution.
Initial phases of this extensive product investment were already released to the
market in early 2007. The end-to-end solution was demonstrated during the first
half of this year in both ISCWest in Las Vegas and IFSEC in Birmingham, the
industry leading trade shows, where it has received extremely positive feedback.
Sales and Marketing
Substantial expansion of the sales force in the UK and Israel was implemented
during the first half of 2007 in order to focus globally on several vertical
markets, including city centres, public spaces, traffic and transportation hubs,
correctional facilities, gaming and financial institutions.
The most significant contribution was organic growth from the UK business. The
Company continues to build upon existing relationships and establish new ones
with a number of high profile national security systems installers and
integrators as well as leading security-consulting firms. Relationships were
further developed with Siemens Building Technologies, particularly in Scotland,
and with Quadrant Video Systems, in securing and concluding projects within a
range of vertical markets. It has expanded its security systems installed
within the London boroughs of Reading and Hackney and won new projects such as
the Princesshay shopping mall, an exciting new shopping and leisure centre in
Exeter.
These wins show a high level of confidence in Vigilant's systems and make the UK
market currently the most successful for Vigilant.
In the US the Company has continued to focus on the market for surveillance
systems for casinos.
In April 2007 Vigilant appointed a Vice President responsible for marketing,
with strong marketing experience in international companies.
The Board would like to express its appreciation to the company's management and
employees for their efforts and achievements. The company has gone through
considerable changes and development in the last 18 months in establishing
itself as a leading competitor in IP end-to-end solutions for the high end
segment. In this period the employees have shown their commitment and dedication
to their customers and the business.
Outlook
Against the backdrop of a very poor 2006, sales progress in 2007 is encouraging.
Up to the end of September 2007, cumulative revenue and order backlog is more
than $6 million, including a very large casino in the US, international airports
in the Far East and Europe, the central Bank in Malta and Category A prisons in
the UK.
The Board is therefore encouraged as the Company begins to show the benefits of
the investment which has been made.
Condensed Consolidated Interim Statements of Operations
Six months ended Six months ended Year ended
30 June, 30 June, 31 December
2007 2006 2006
ended ended ended
30 June 2007 30 June 2006 31 December 2006
Unaudited Unaudited Audited
U.S.$ U.S.$ U.S.$
In thousands
Revenues 3,024 979 985
Cost of revenues 1,885 653 1,316
Gross profit (loss) 1,139 326 (331)
Research and development costs, net 1,414 1,315 2,976
Selling and marketing expenses 2,268 1,534 3,479
General and administrative expenses 965 893 2,429
Operating loss (3,508) (3,416) (9,215)
Financial (expenses) income, net (17) 493 573
Damage costs from fire event - - (1,518)
Net loss before income taxes (3,525) (2,923) (10,160)
Income taxes - 1,062 (1,133)
Net loss for the period (3,525) (1,861) (11,293)
U.S.$ U.S.$ U.S.$
Loss per ordinary share and ordinary share equivalent
Basic and diluted loss per share (0.062) (0.033) (0.2)
Condensed Consolidated Interim Balance Sheets
30 June 30 June 31 December
2007 2006 2006
Unaudited Unaudited Audited
U.S.$ U.S.$ U.S.$
In thousands
Assets
Current assets:
Cash and cash equivalents 1,915 7,569 3,474
Trade accounts receivable, net 1,468 3,536 849
Other accounts receivable 589 453 387
Inventories 1,755 2,693 2,054
Total current assets 5,727 14,251 6,764
Non - current assets:
Property and equipment, net 565 529 558
Deferred income tax - 2,195 -
Other assets, net 298 153 330
Total non - current assets 863 2,877 888
6,590 17,128 7,652
Liabilities and shareholders' equity
Current liabilities:
Bank loans 2,032 - -
Trade accounts payable 903 1,222 1,064
Other accounts payable 1,323 872 878
Total current liabilities 4,258 2,094 1,942
Long - term liabilities:
Liability for employee rights upon retirement, net 160 167 157
Other long-term liabilities 68 - -
Total long - term liabilities 228 167 157
Shareholders' equity 2,104 14,867 5,553
6,590 17,128 7,652
Condensed Consolidated Interim Statements of Cash Flows
Six months ended Six months ended Year ended
30 June, 30 June, 31 December,
2007 2006 2006
30 June 2007 30 June 2006 31 December 2006
Unaudited Unaudited Audited
U.S.$ U.S.$ U.S.$
In thousands
Cash flows used in operating activities:
Net loss (3,525) (1,861) (11,293)
Adjustments required reconciling net loss to net cash
used in operating activities:
Income and expenses not involving cash flows:
Depreciation and amortization 128 77 197
Provision for doubtful accounts 26 - 727
Changes in accrued liability for employee rights upon 3 13 3
retirement
(Increase) decrease in deferred taxes - (1,062) 1,133
Recognition of compensation 76 120 238
related to employee stock option plan
Gain on sale of property and equipment (7) - -
Changes in operating assets and liabilities items:
(Increase) decrease in trade accounts receivable (645) 569 2,529
(Increase) decrease in other accounts receivable (201) (266) 2
Income tax paid (4) (4) (9)
Decrease (increase) in inventories 299 (1,173) (534)
(Decrease) increase in trade accounts payable (161) (68) (381)
Increase (decrease) in other accounts payable 513 (1,385) (1,676)
Net cash used in operating activities (3,498) (5,040) (9,064)
Cash flows used in investing activities:
Purchase of property and equipment (101) (301) (423)
Software license - (125) (190)
Proceeds from sale of property and equipment 8 - -
Net cash used in investing activities (93) (426) (613)
Cash flows from financing activities:
Short-term bank loans received 2,032 - -
Interest received, net - 181 297
Net cash provided by financing activities 2,032 181 297
Decrease in cash and cash equivalents (1,559) (5,285) (9,380)
Cash and cash equivalents at beginning of period 3,474 12,854 12,854
Cash and cash equivalents at end of period 1,915 7,569 3,474
Notes to the Interim Consolidated Financial Information
1. Basis of preparation
The interim financial information for the six months ended 30 June 2007 has been
prepared under International Financial Reporting Standards ("IFRS") using
policies consistent with those applied to the year ended 31 December 2006 and
the six months ended 30 June 2006. The interim information, together with the
comparative information contained in this report for the year ended 31 December
2006, does not constitute statutory accounts. However, the information has been
reviewed by the Company's auditors, Baker Tilly Oren Horowitz. The IFRS
statutory accounts for the year ended 31 December 2006 have been reported on by
the Company's auditors, Baker Tilly Oren Horowitz. The report of the auditors on
those accounts was unqualified.
2. Earnings per share
Basic earnings per share is calculated on the earnings after taxation and the
weighted average number of shares in issue of 56,569,478.
A diluted earnings per share is calculated on the basis of full exercise of
options resulting in a diluted weighted average number of ordinary shares of
56,569,478.
3. Copies of report
Further copies of this report are available at Vigilant Technology Ltd. offices
at 34 Habarzel Street, Tel Aviv, Israel.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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