Vizrt Reports First Half and Second Quarter Results
Bergen, Norway, August 2, 2005, Vizrt Ltd. (Frankfurt Prime Standard, Oslo Main List: VIZ) announced today its financial results for the first half and second quarter of 2005.
Results Highlights:
Results Highlights:
- Revenue increased by 35% to USD 9.0M in Q2 2005, compared to Q2 2004.
- Best quarterly results in the Company's history, reaching 17% operating profit of USD 1.5M, in Q2 2005.
- EBITDA for Q2 2005 was USD 1.8M compared to USD 1.2M in Q2 2004.
- 26 new customers signed up during Q2 2005.
- Completion of Curious acquisition effective June 23, with a revenue contribution of USD 85K from the last 8 days of joint operation in June.
Business highlights for the second quarter include the successful secondary listing and issuance on Oslo Bors on May 12, 2005, the acquisition of Curious Software adding hundreds of customers to Vizrt's growing prestigious installed customer base. In addition Vizrt was awarded the CCTV China Television order for broadcast graphics underscoring Vizrt's potential in the rapidly developing Chinese market, as well as a new Russian customer, Russia Today, leading broadcasters in the Middle East and several mid and small market broadcast facilities in the USA.
Financial highlights for the six months ended June, 30 2005
Financial highlights for the six months ended June, 30 2005
- Consolidated revenues in H1 2005 increased by 25% to USD 16.3M compared to USD 13.0M in H1 2004.
- Gross margin reached 75% in H1 2005 compared to 71% in H1 2004.
- EBITDA (excluding taxes, interest, depreciation and deferred stock compensation) for H1 2005 was USD 2.7M compared to USD 2.3M in H1 2004.
- USD 2.1M net profit in H1 2005 compared to a net profit of US $ 1.8M in H1 2004.
- Basic earnings per share for H1 2005 was US$ 0.15 compared to US$ 0.13 for H1 2004.
- Diluted earnings per share for H1 2005 was USD 0.13, compared to USD 0.11 for H1 2004.
- Cash balance as of June 30, 2005 was USD 16.5M (including cash and short term deposits) compared to USD 15.2M as of December 31, 2004.
The acquisition of Curious Software Company Ltd. was concluded on June 22, 2005 and accordingly the operating results since June 23 were consolidated. The consolidated balance sheet as of June 30, 2005, includes all assets and liabilities of Curious, including goodwill and intangible assets recorded as a result of the acquisition. Intangible assets in the aggregate amount of USD 3.1M will be amortized over the next five years. Net of tax, the quarterly amortization will be app. USD 110K.
"We have posted 25% revenue growth for the first half of this year compared to the first half of last year," said Mr. Bjarne Berg, President and CEO. "In the second half of the year we look forward to further growing Vizrt's business in our core markets and the new areas that we've targeted for expansion. Vizrt's recent success in China, the Middle East and the USA reaffirms our market development strategy. Vizrt's strategic focus in graphical content creation, management and play-out has been right on track and is now further enhanced with the acquisition of Curious Software."
Financial highlights for the three months ended 30th of June, 2005
"We have posted 25% revenue growth for the first half of this year compared to the first half of last year," said Mr. Bjarne Berg, President and CEO. "In the second half of the year we look forward to further growing Vizrt's business in our core markets and the new areas that we've targeted for expansion. Vizrt's recent success in China, the Middle East and the USA reaffirms our market development strategy. Vizrt's strategic focus in graphical content creation, management and play-out has been right on track and is now further enhanced with the acquisition of Curious Software."
Financial highlights for the three months ended 30th of June, 2005
- Consolidated revenues for Q2 2005 increased by 35% to USD 9.0M compared to USD 6.7M in Q2 2004, and USD 7.3M in Q1 2005.
- Gross margin reached 75% compared to 69% in Q2 2004.
- EBITDA (excluding taxes, interest, depreciation and deferred stock compensation) for Q2 2005 was USD 1.8M compared to USD 1.2M in Q2 2004.
- USD 1.3M net profit in Q2 2005 compared to a net profit of USD 0.9M in Q2 2004.
- Basic earnings per share for Q2 2005 was USD 0.09 compared to USD 0.06 in Q2 2004.
- Diluted earnings per share for Q2 2005 was USD 0.08, compared to USD 0.06 for Q2 2004.
Financial details
Revenue highlights:
Revenue highlights:
- Revenues for the first half of 2005 increased 25% compared to first half of 2004, including USD 85K revenues generated by Curious in the relevant 8 days.
- Revenue increased in all regions except Europe and was especially strong in the Asia Pacific and Middle East regions. Geographic breakdown of revenue was:
| Territories (In US$ thousands) | H1/05 | H1/04 | Q2/05 | Q2/04 | Q1/05 |
| The Americas | 4,583 | 3,752 | 2,638 | 2,038 | 1,945 |
| Europe | 5,880 | 5,913 | 3,017 | 3,325 | 2,863 |
| Asia Pacific | 4,603 | 2,621 | 2,588 | 985 | 2,015 |
| Middle East | 1,229 | 762 | 768 | 327 | 462 |
| Total | $16,295 | $13,048 | $9,011 | $6,675 | $7,285 |
Gross Margin
The gross margin for the period ended June 30, 2005, was 75% compared to 71% for the period ended June 30, 2004 and is attributed to the higher software content in the product mix.
Operating Expenses
Total operating expenses (including sales and marketing expenses (S&M), research and development expenses (R&D) and general and administrative expenses (G&A), for the first half of 2005 amounted to USD 9.8M (excluding USD 55K compensation expenses).
The following table represents the total expenses:
| Expenses (In US$ thousands) | H1/05 | H1/04 | Q2/05 | Q2/04 | Q1/05 |
| S&M Expenses | 5,793 | 4,112 | 3,210 | 2,050 | 2,583 |
| G&A Expenses | 1,480 | 1,301 | 724 | 601 | 756 |
| R&D Expenses | 2,544 | 1,899 | 1,264 | 928 | 1,280 |
| Operating Expenses | $9,817 | $7,312 | $5,198 | $3,579 | $4,619 |
- S&M expenses increased by 41% in the first half of 2005 compared to the first half of 2004. The increase follows the company's policy of expanding its presence worldwide with personnel in additional local markets, higher cost of NAB tradeshow in April 2005, and higher levels of dealer commissions. S&M expenses are at 36% of H1 2005 revenue, compared to 31% of H1 2004 revenue.
- G&A expenses increased by 14% in the first half of 2005 compared to the first half of 2004. G&A expenses are at 9% to revenue compared to 10% to revenue in H1 2004.
- R&D expenses increased by 34% in the first half of 2005 compared to the first half of 2004. The increase was primarily due to the company's continued policy of product development and constantly adding new features and improved functionality based on customer feedback. R&D expenses are at 16% to revenue, compared to 15% to revenue in H1 2004.
- Total operating expenses in the first half of 2005 increased by 33% or USD 2.5M compared to the first half of 2004.
Cash Position
As of June 30, 2005 the company had a balance of USD 16.5M in cash and short-term deposits compared with USD 15.2M as of December 31, 2004. Net cash generated from operating activities was USD 1.8M, net cashed used for investing activities totaled USD 5.4M, primarily for the acquisition of Curious and net cash generated from financing activities totaled USD 5.1M, primarily from proceeds from the issuance of shares.
As of June 30, 2005 the company had a balance of USD 16.5M in cash and short-term deposits compared with USD 15.2M as of December 31, 2004. Net cash generated from operating activities was USD 1.8M, net cashed used for investing activities totaled USD 5.4M, primarily for the acquisition of Curious and net cash generated from financing activities totaled USD 5.1M, primarily from proceeds from the issuance of shares.
Outlook
Vizrt's investments to develop new market opportunities in several regions of the world continue to deliver positive results. The demand for Vizrt's High Definition graphics production tools continues to increase in the USA and Japan, while other regions including Mexico, Canada and Europe are actively planning the transition to HD.
The Curious Software customer base presents new opportunities for greater market penetration of Vizrt products, while Vizrt's vast customer base will be introduced to the Curious Software products. The Company will continue to explore the market for acquisition opportunities in line with the Company's growth strategy.
A conference call will be held at 14:00 p.m. (CET) today to offer analysts, investors and media the opportunity to directly discuss the results and recent developments with Bjarne Berg, CEO, and Ofra Brown, CFO of the company. Please contact our investor relations' agency, Schwarz Financial Communication, to receive the dial-in-number.
Vizrt's investments to develop new market opportunities in several regions of the world continue to deliver positive results. The demand for Vizrt's High Definition graphics production tools continues to increase in the USA and Japan, while other regions including Mexico, Canada and Europe are actively planning the transition to HD.
The Curious Software customer base presents new opportunities for greater market penetration of Vizrt products, while Vizrt's vast customer base will be introduced to the Curious Software products. The Company will continue to explore the market for acquisition opportunities in line with the Company's growth strategy.
A conference call will be held at 14:00 p.m. (CET) today to offer analysts, investors and media the opportunity to directly discuss the results and recent developments with Bjarne Berg, CEO, and Ofra Brown, CFO of the company. Please contact our investor relations' agency, Schwarz Financial Communication, to receive the dial-in-number.
About Vizrt:
Vizrt is the world's leading provider of HD/SD real-time 2D and true 3D broadcast graphics. The company's software suite offers a complete graphics solution including: character generation, content management and newsroom integration, 3D tickers, virtual studio, 3D weather application with data integration, Curious Software map creation tools, virtual sports analysis, information display and virtual effects.
All Vizrt's graphics products are powered by a single core renderer, the unique and powerful Viz|Engine(TM). Vizrt's graphics solution goes beyond the visual aspect and includes highly customized user interfaces for the designer, operator, journalist and engineer.
The world's leading broadcasters, such as CNN, CBS, Fox, BBC, Sky, ITN, ZDF, Star TV, TV Today, CCTV and NHK as well as Production houses and Corporate institutions, including both the New York and London Stock Exchange, use the Vizrt's software suite. Vizrt is a public company traded on the Frankfurt Prime Standard and on the Oslo Main List: VIZ, ISIN: IL0010838154.
| Bjarne Berg | Ofra Brown | SCHWARZ Financial Communication |
| President CEO | CFO | Frank Schwarz |
| +47 9055 7711 | +972 54 4955225 | +49 611 2058 095 |
This press release contains forward-looking statements with respect to the business, financial condition and results of operations of Vizrt and its affiliates. These statements are based on the current expectations or beliefs of Vizrt's management and are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. These risks and uncertainties relate to changes in technology and market requirements, the company's concentration on one industry, decline in demand for the company's products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. Vizrt undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Please click the following link in order to view the full Q2 report: