Vizrt Reports First Quarter 2005 Results
Bergen, Norway, May 20, 2005, Vizrt Ltd. (Frankfurt Prime Standard, Oslo Main List: VIZ) announced today its financial results for the first quarter of 2005. Revenues totaled USD 7.3M, up 14% compared to Q1 2004.
Results Highlights:
- Tenth consecutive profitable quarter; net profit USD 0.8M.
- Revenue increased by 14% to USD 7.3M in Q1 2005, compared to Q1 2004.
- Net cash generated in Q1 2005 totaled USD 1.5M reaching a balance of USD 16.7M.
- 15 new customers signed up during Q1 2005.
Business highlights for the first quarter include the announcement of the prospective acquisition of Curious Software, further expansion into Latin America and the rapidly growing Indian market. In addition the company continues to invest in its operations in the US and China.
Financial highlights for the three months ended 31st of March, 2005
Financial highlights for the three months ended 31st of March, 2005
- Consolidated revenues for Q1 2005 increased by 14% to USD 7.3M compared to USD 6.4M in Q1 2004, and USD 8.2M in Q4 2004.
- Gross margin at 75% compared to 73% in Q1 2004.
EBITDA (excluding taxes, interest, depreciation and deferred stock compensation) for Q1 2005 was USD 0.9M compared to USD 1.0M in Q1 2004. - USD 0.8M net profit in Q1 2005 compared to a net profit of USD 0.9M in Q1 2004.
- Basic earnings per share for Q1 2005 remained at USD 0.06.
- On a fully diluted basis, earnings per share for Q1 2005 was USD 0.05, compared to USD 0.06 for Q1 2004.
- Cash balance as of March 31, 2005 was USD 16.7M (including cash and short term deposits) compared to USD 15.2M as of December 31, 2004.
Mr. Bjarne Berg, President and CEO said: "The results for the first quarter reflect seasonality and product mix variations. While the financial model of the company is targeting 70% gross margins, higher than usual percentage of software revenues have resulted in 75% gross margin for the quarter. Likewise, we continue to anticipate some variations in revenue growth rates and gross margins based on product mix and unfolding opportunities. Existing customers continue to expand their operations using our graphics systems and we constantly gain ground in both our traditional markets as well as in new regions like Latin America and The Middle East.
We will continue to broaden our product offering to meet our customers needs both in the high and low end segments of the market. Specifically our low-end character generator was launched at this year's NAB tradeshow (Mid April).
The combination of our efforts in opening new markets coupled with a broader product offering will further strengthen our leading position in the broadcasting market".
We will continue to broaden our product offering to meet our customers needs both in the high and low end segments of the market. Specifically our low-end character generator was launched at this year's NAB tradeshow (Mid April).
The combination of our efforts in opening new markets coupled with a broader product offering will further strengthen our leading position in the broadcasting market".
Financial details
Revenue highlights:
Revenues for the first quarter increased 14% compared to first quarter of 2004.
The increase in sales was throughout the different geographical regions with Asia & Pacific back on the growth path. Geographic breakdown of revenue was:
| USD in thousands | Q1/05 | Q1/04 | 12M/04 |
| The Americas | 1,945 | 1,714 | 7,682 |
| Europe | 2,863 | 2,588 | 13,747 |
| Asia & Pacific | 2,015 | 1,636 | 5,702 |
| Other | 462 | 435 | 1,427 |
| | $7,285 | $6,373 | $28,558 |
Gross Margin
The gross margin for the period ended March 31, 2005, was 75% compared to 73% for the period ended March 31, 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), in the first quarter of 2005 amounted to USD 4.6M (excluding USD 29K compensation expenses).
The following table represents the total expenses:
| Expenses (USD in thousands) | Q1/05 | Q1/04 | 12M/04 |
| S&M Expenses | 2,583 | 2,062 | 8,800 |
| G&A Expenses | 756 | 700 | 2,629 |
| R&D Expenses | 1,280 | 971 | 4,184 |
| Operating Expenses | $4,619 | $3,733 | $15,613 |
- S&M expenses increased by 25% in the first quarter of 2005 compared to the first quarter of 2004. The increase follows the company's policy of expanding its presence worldwide with new representatives in additional locations, primarily in the US. S&M expenses are at 35% of Q1 2005 revenue, compared to 32% of Q1 2004 revenue.
- G&A expenses increased by 8% in the first quarter of 2005 compared to the first quarter of 2004. G&A expenses are at 10% to revenue compared to 11% to revenue in Q1 2004.
- R&D expenses increased by 32% in the first quarter of 2005 compared to the first quarter of 2004. The increase was mainly due to the company's continued policy to stay on the edge of technology, and constantly add new features and develop improved functionality based on customer feedback. R&D expenses are at 18% to revenue, compared to 15% to revenue in Q1 2004.
- Total operating expenses in the first quarter of 2005 increased by 24% or USD 0.9M compared to the first quarter of 2004.
Cash Position
As of March 31, 2005 the company had a balance of USD 16.7M in cash and short-term deposits compared with USD 15.2M as of December 31, 2004.
In early May the company has completed secondary offering and dual listing its shares in the Oslo Bors, raising a gross amount of USD 5.7 million, to be reported in the in Q2 2005 results.
Outlook
Vizrt invested heavily in the US and China at the end of last year and continued the build-up in the beginning of this year. The company already sees a payback of those investments and expects this development to continue over the coming quarters. In the USA, Vizrt has already become one of the dominant graphics system providers for the large stations and networks. Recently the company has also invested in a larger sales force and a new distributor network to address the mid-tier and lower end of the broadcast market in the US. Along with dedicated sales representatives for these market sectors, the R&D department has also introduced new products aimed at the smaller and midsize stations.
In addition, Vizrt's Beijing office is now fully operational and we expect initial results for these efforts in the near future.
A conference call will be held at 11:30 a.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 a public company traded on the Frankfurt Prime Standard and the Oslo Main List: VIZ, ISIN: IL0010838154. Vizrt is the world's leading provider of 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, weather data integration, 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. 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, BBC, Sky, ITN, ZDF, Star TV, TV Today and NHK, use Vizrt's solutions in conventional digital and high definition content delivery. Production houses and corporate institutions, including the New York Stock Exchange, are Vizrt customers.
For further information please refer to www.vizrt.com
Press contacts:
| 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 to review the full Q1 report: