Haivision reports third-quarter
year-over-year revenue growth of 42.9%
MONTREAL ,
Sept. 13,
2022 /CNW Telbec/ - Haivision Systems
Inc. ("Haivision" or the "Company") (TSX: HAI),
a leading global provider of mission critical, real-time IP video
solutions, today announced its results for the third quarter ended
July 31, 2022.
"With the successful completion of two major acquisitions since
our IPO, combined with the introduction of exciting game-changing
products, our focus on meeting the challenges and priorities of our
customers with mission-critical live video networking and
collaboration solutions have never been clearer," said Mirko Wicha, Chairman and CEO of Haivision. "Our
core values of security, reliability, quality, and performance are
fundamental aspects of all our products including the new Haivision
Command 360 and Haivision Hub MCR. And now, along with Haivision's
exciting and bold new brand identify we are entering a new chapter
as the company transitions to perfectly position itself for the
future."
Q3 2022 Financial Results
- Revenue of $29.6 million
represents an increase of 42.9% or $8.9
million from the prior year period.
- Gross margins* for the quarter were 66.1%.
- Total expenses of $24.4 million
represented an increase of $12.7
million from the prior year period, largely the result of
the acquisitions of Haivision MCS in August
2021 and Aviwest in April
2022.
- Resulting operating loss was $4.8
million, a decrease of $8.7
million from the prior year period.
- Net loss of $4.2 million was a
decrease of $6.1 million from the
$1.9 million net income in the prior
year period.
- Adjusted EBITDA* was a loss of $1.6
million, a decrease of $5.0
million from Adjusted EBITDA of $3.4
million in the prior year period.
- Adjusted EBITDA margin was (5.4)% compared to 16.3% in the
prior year period.
Financial Results for the nine months ended July 31, 2022
- Revenue of $87.8 million
represents an increase of 34.0% or $22.3
million from the prior year period.
- Gross margins* were 69.0%.
- Total expenses of $65.3 million
represented an increase of $10.2
million from the prior year period, largely the result of
the acquisitions of Haivision MCS in August
2021 and Aviwest in April
2022.
- Operating loss was $4.8 million,
an increase of $0.2 million from the
prior year period.
- Net loss was $5.1 million but
represented a $3.9 million increase
from the $8.9 net loss in the prior
year's period.
- Adjusted EBITDA* was $3.1
million, a decrease of $7.4
million from Adjusted EBITDA of $10.5
million in the prior year period.
- Adjusted EBITDA Margin* was 3.6% compared to 16.1% for the
prior year period.
Key Company Highlights for Fiscal 2022
- On April 1, 2022, we completed
the acquisition of AVIWEST S.A.S. ("Aviwest"), a provider of
ultra-low-latency wireless and IP bonding broadcast video
transmission, through mobile networking (5G/4G cellular) and
patented network bonding capabilities.
- CineMassive Displays, LLC was renamed Haivision MCS, LLC
("Haivision MCS"), highlighting its focus on
"Mission-Critical Systems" for the enterprise, government, and
defense verticals.
- Haivision introduced the new critical visual collaboration
platform Haivision Command 360.
- Haivision was awarded its fourth Emmy® Award for Technology
& Engineering, for the "Management of IP Multicast Video
Distribution to Desktops and TVs in News and Media Production
Facilities" through our flagship, multisite, live video
distribution and IPTV solution, Haivision Media Platform.
- Haivision was awarded "Best Corporate Video and Enterprise
Video Content Management Platform" at the 2021 Streaming Media
Readers' Choice Awards.
- Haivision partnered with Grass Valley to enable live low
latency cloud media production.
- Published our third annual Broadcast IP Transformation
Report.
- SRT Alliance membership surpassed 575 members.
- Haivision awarded Best of Show award at IBC 2022 for Haivision
Pro460 mobile video transmitter.
- Introduced an exciting new brand strategy that brings together
our products, technology, and people under one inspiring
brand.
"In this first full quarter operating with both acquisitions on
a consolidated basis, we identified significant synergies that can
be largely realized over this next quarter," said Dan Rabinowitz, Chief Financial Officer and EVP,
Operations. "In addition, the company also expects higher revenues
in this fourth quarter from increases in seasonal volume and from
increased pricing to offset incremental supply chain costs.
We expect to be able to maintain our historical margin profiles
while still delivering industry leading price to value offerings
for our customers."
Financial Results
Revenue for the three months and nine months ended July 31, 2022 was $29.6
million and $87.8 million,
respectively, an increase of $8.9
million or 43% and $22.3
million or 34% compared to the prior year periods,
respectively. Primary contributors to revenue growth were the
recent acquisitions of Haivision MCS in August 2021 and of Aviwest in April 2022.
Gross Margins* for the three months and nine months ended
April 30, 2022 were 66.1% and 69.0%,
compared to 75.1% and 76.5% for the prior year periods,
respectively. The decrease in Gross Margins* results largely from
the addition of Haivision's recent acquisitions which historically
operated at a lower overall gross margin than Haivision's
traditional business.
Total expenses in the quarter ended July
31, 2022 was $24.4 million an
increase of $12.7 million from the
prior year period largely related to the acquisition of Haivision
MCS in August 2021 and Aviwest in
April 2022, and included $2.2 million in additional depreciation and
amortization expenses related to these acquisitions. For the nine
months ended July 31, 2022, total
expenses of $65.3 million represent
an increase of increased by $10.2
million from the prior year period largely related to the
acquisition of Haivision MCS and Aviwest. Increases in total
expenses were offset by the reduction in non-recurring share-based
payments of $14.1 million related to
the legacy Employee Stock Option Plan ("ESOP") and included
$4.6 million of incremental
depreciation and amortization expense and $1.1 million in transactional expenses related to
acquisitions.
Net loss for the three months ended July
31, 2022 was $4.2 million a
decrease of $6.1 million from
$1.9 million net income from the
prior year period. The decrease in net income in the three-month
period ended July 31, 2022 is largely
related to the $8.9 million increase
in revenue contributing to a $4.0
million increase in gross profit; offset by an increase in
total expenses by $12.7 million
(largely related to the Haivision MCS acquisition in August 2021 and the Aviwest acquisition in April
2022). Income taxes also declined by $2.8 million. The net loss for the nine
months ended July 31, 2022 was
$5.1 million, a $3.9 million improvement from the $8.9 million net loss in the prior year
period. The increase in net income in the nine month period
is largely related to the $22.3
million increase in revenue contributing to a $10.4 million increase in gross profit; offset by
an increase in total expenses by $10.2
million and a decrease in income taxes of $4.1 million. *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,
2022.
Conference Call Notification
Haivision will hold a conference call to discuss its third
quarter financial results on Tuesday,
September 13, 2022 at 5:30 pm
(ET). To register for the call, please use this link
https://conferencingportals.com/event/myiwYleM. 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, 2022 (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, 2022 are
prepared in accordance with International Financial Reporting
Standards ("IFRS"), as issued by the International Accounting
Standards Board. 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,
2022.
About Haivision
Haivision is a leading global provider of mission-critical,
real-time video streaming and networking solutions. Our connected
cloud and intelligent edge technologies enable global organizations
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,
|
|
2022
|
2021
|
2022
|
2021
|
|
($)
|
($)
|
($)
|
($)
|
Revenue
|
29,574
|
20,695
|
87,794
|
65,531
|
Cost of
sales
|
10,012
|
5,152
|
27,232
|
15,373
|
|
|
|
|
|
Gross
profit
|
19,562
|
15,543
|
60,561
|
50,158
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Sales and
marketing
|
7,968
|
4,036
|
20,584
|
13,988
|
Operations and
support
|
3,283
|
846
|
8,710
|
3,334
|
Research and
development
|
8,351
|
3,638
|
22,086
|
12,877
|
General and
administrative
|
4,164
|
2,313
|
11,905
|
8,934
|
Share-based
payment
|
611
|
821
|
2,060
|
16,015
|
|
|
|
|
|
|
24,377
|
11,654
|
65,345
|
55,148
|
|
|
|
|
|
Operating Profit
(loss)
|
(4,815)
|
3,888
|
(4,784)
|
(4,991)
|
Financial
expenses
|
308
|
60
|
654
|
248
|
|
|
|
|
|
Income (loss) before
income taxes
|
(5,123)
|
3,829
|
(5,438)
|
(5,239)
|
|
|
|
|
|
Income
taxes
|
|
|
|
|
Current
|
23
|
1,934
|
322
|
3,715
|
Deferred
|
(904)
|
—
|
(676)
|
—
|
|
|
|
|
|
|
(882)
|
1,934
|
(354)
|
3,715
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(4,241)
|
1,894
|
(5,085)
|
(8,954)
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
Foreign currency
translation adjustment
|
(979)
|
(161)
|
483
|
(778)
|
|
|
|
|
|
Comprehensive income
(loss)
|
(5,220)
|
1,733
|
(4,602)
|
(9,733)
|
|
|
|
|
|
|
|
|
|
|
Net income per
share
|
|
|
|
|
Net income (loss)
per share (basic and diluted)
|
$(0.15)
|
$0.07
|
$(0.18)
|
$(0.36)
|
Weighted average
number of shares outstanding
|
|
|
|
|
Basic
|
28,878,054
|
26,634,916
|
28,846,780
|
24,754,126
|
Diluted
|
28,878,054
|
27,316,136
|
28,846,780
|
24,754,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of Canadian
dollars
|
|
|
|
As at
|
|
|
July 31,
2022
|
|
October 31,
2021
|
|
|
$
|
|
$
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash
|
8,854
|
|
26,838
|
|
Trade and other receivables
|
21,465
|
|
19,476
|
|
Investment tax credits receivable
|
3,000
|
|
2,000
|
|
Inventories
|
15,449
|
|
8,840
|
|
Prepaid expenses
|
5,325
|
|
3,226
|
|
|
54,093
|
|
60,380
|
|
|
|
|
|
|
Property and
equipment
|
3,429
|
|
1,848
|
|
Right-of-use
assets
|
8,857
|
|
7,926
|
|
Intangible
assets
|
28,368
|
|
17,533
|
|
Goodwill
|
39,929
|
|
30,079
|
|
Non-refundable
investment tax credits receivable
|
2,974
|
|
2,535
|
|
Deferred income
taxes
|
1,484
|
|
2,179
|
|
|
85,041
|
|
62,100
|
|
|
139,134
|
|
122,480
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Credit facility
|
12,952
|
|
—
|
|
Trade and other payables
|
11,559
|
|
12,504
|
|
Purchase price payable
|
2,705
|
|
—
|
|
Income taxes payable
|
115
|
|
2,960
|
|
Current portion of lease liabilities
|
1,441
|
|
1,002
|
|
Current portion of term loans
|
1,622
|
|
—
|
|
Deferred revenue
|
8,894
|
|
7,913
|
|
|
39,288
|
|
24,379
|
|
|
|
|
|
|
Lease
liabilities
|
8,318
|
|
7,587
|
|
Long term
debt
|
3,357
|
|
—
|
|
Deferred
revenue
|
2,216
|
|
1,592
|
|
|
53,179
|
|
33,559
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share
capital
|
90,176
|
|
89,785
|
|
Retained
earnings
|
(8,086)
|
|
(3,002)
|
|
Stock option
reserve
|
3,928
|
|
2,684
|
|
Cumulative translation
adjustment
|
(63)
|
|
(546)
|
|
|
85,955
|
|
88,921
|
|
|
139,134
|
|
122,480
|
|
|
|
|
|
|
Thousands of Canadian
dollars
|
|
|
|
|
|
|
|
|
Three months
ended
July
31,
|
Nine months
ended
July
31,
|
|
2022
|
2021
|
2022
|
2021
|
|
($)
|
($)
|
($)
|
($)
|
Net Income
(loss)
|
(4,241)
|
1,894
|
(5,085)
|
(8,954)
|
Income
Taxes
|
(882)
|
1,934
|
(354)
|
3,715
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
(5,123)
|
3,829
|
(5,438)
|
(5,239)
|
|
|
|
|
|
Depreciation
|
728
|
298
|
1,838
|
885
|
Amortization
|
1,881
|
138
|
4,022
|
414
|
Financial
expenses
|
308
|
60
|
654
|
248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA(1)
|
(2,206)
|
4,325
|
1,076
|
(3,692)
|
|
|
|
|
|
Share-based payments
(LTIP)
|
611
|
821
|
2,060
|
1,890
|
Non-recurring
expenses:
|
|
|
|
|
Share-based payment (ESOP)
|
|
—
|
—
|
14,125
|
PPP loan
forgiveness
|
|
(1,772)
|
|
(1,772)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
(1,595)
|
3,374
|
3,136
|
10,552
|
|
|
|
|
|
Adjusted EBITDA
Margin(1)
|
(5.4) %
|
16.3 %
|
3.6 %
|
16.1 %
|
|
|
|
|
|
_____________
|
|
|
|
|
|
|
|
Note:
|
(1)
|
Non-IFRS measure. See
"Non-IFRS Measures".
|
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SOURCE Haivision Systems Inc.