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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Vigilant | LSE:VGT | London | Ordinary Share | IL0010947708 | ORD ILS0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.54 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:6576Y Vigilant Technology 20 June 2007 20 June 2007 Vigilant Technology Limited Preliminary Results for the year ended 31 December 2006 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 preliminary results for the year ended 31 December 2006. * Revenues for 2006 were not representative of the actual level of sales activity. The value of goods invoiced and shipped to customers for the year ended 31 December 2006 was US$2.6 million vs. revenue of US$1 million (2005: US$8.2 million) * Gross loss for the period ended 31 December 2006 was $0.3 million (2005 gross profit: $5 million) * Extensive product investment in the period, with first phase of new products already on the market in early 2007, with extremely positive feedback * International coverage improved through strengthening of sales force Moshit Yaffe-Blushinksy, Chief Executive Officer, commenting on the results announcement said: "Despite the disappointing results of 2006, the business is showing encouraging signs of improvement in 2007. The total revenue and backlog at the end of May 2007 was circa US$3.5 million which includes prestigious projects in Luton, Sutton, Corby, Fakenham, Huntingdon, Kings Lynn, and Lewisham Borough Councils and the Isle of Man's Jurby Prison. The Company's product development programme and substantially enhanced product range will position it as a leading provider of intelligent IP surveillance and security solutions." For further information, please contact: Vigilant Technology Limited +972 3 6491110 Moshit Yaffe-Blushinsky - CEO Eran Edri - CFO Shore Capital +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 pioneering developer and manufacturer of intelligent video recording and surveillance solutions for mission-critical applications. The focus is on adding value to the video that is captured by customers' CCTV networks. * Vigilant's high frame rate solutions allow customers to break free from ineffective time lapse recording solutions. They enable demanding environments such as airports, banks, casinos, hospitals, prisons, schools and universities to gain maximum benefit from today's digital video recording technology. * Vigilant Technology was listed on AIM on 20th December 2005. Visit www.vigilanttechnology.com for more information. Statement from the Chairman and the Chief Executive Financial Overview Revenues for 2006 were $1 million (2005: $8.2 million). However this very low figure is not representative of the actual level of sales activity. The value of goods invoiced and shipped to customers for the year ended 31 December 2006 was $2.6 million. Certain equipment which was shipped in 2005 and included in that year's revenues, but for which no payment was received, was collected back by the company between November 2006 and April 2007. As a result, reported revenues for the year ended 31 December 2006 were reduced by $1.6 million. The Company's decision to collect the equipment was partially influenced by the fire in the adjoining warehouse, reported in the company's 13th December 2006 press release, which forced the company to find new equipment to fulfil open orders as soon as possible. This has led to accounting adjustments significantly reducing revenues for 2006 and created a further expense of $1.5 million for inventory damaged as a result of the fire. Gross loss for the period ended 31 December 2006 was $0.3 million (2005 gross profit: $5 million). This decline is attributable to the fall in revenues during the period. The gross margin fell to a 33% loss in 2006 from a 60% margin in 2005, reflecting the fixed cost element of the cost of revenues. The Company recorded an operating loss for the period ended 31 December 2006 of $9.2 million, compared to an operating profit of $0.8 million for 2005. This reflects the decline in revenues as well as higher spending on R&D, (which rose 50% from $2 million in 2005 to $3 million in 2006) selling and marketing expenses (which rose 133% from $1.5 million in 2005 to $3.5 million in 2006 with the expansion of Vigilant's sales infrastructure to achieve effective international coverage) and general and administrative expenses (which rose 300% from $0.6 million in 2005 to $2.4 million in 2006, partly reflecting the running costs of being a public company and a provision for doubtful accounts). Headcount increased from 47 employees at the end of 2005 to 65 employees by 31 December 2006. Financial income rose to $0.6 million in 2006 compared to financial expenses of $0.15 million in 2005, reflecting exchange rate benefits and interest income earned on the net IPO proceeds of $14.5 million from the Company's share offering and listing on AIM in December 2005. Loss before tax for 2006 was $10.1 million, compared to a profit before tax for the corresponding period in 2005 of $0.65 million. (Including the loss of $1.5 million caused by the fire in the adjoining warehouse as mentioned above). As at 31 December 2006, the Company had carried forward tax losses of approximately $12.6 million, which are available to use against future taxable income of the Company, and which the Company has not recognised as a deferred tax asset. In the final accounts for 2006 the Company has provided against a previously recognised deferred tax asset of $1.3 million. The Company recorded a basic loss per share for 2006 of $0.2 per share (($0.047 earnings per share in 2005) while the diluted loss per share in 2006 was also $0.2 per share ($0.046 earnings per share in 2005). Balance Sheets and Cash Flows The balance sheet as at 31 December 2006 showed shareholders' equity of $5.6 million, compared to $16.6 million at the end of December 2005. This decrease reflects the Company's net loss of $11.2 million. Inventories increased by $0.5 million due to the need to replace inventories lost as a result of the fire. Trade accounts receivable decreased by $3.2 million as a result of low revenues and an increase in doubtful debtors. Total accounts payable decreased from $3.5 million as at the end of December 2005 to $1.9 million as at the end of December 2006, reflecting debts which were repaid after the IPO. The Company's net cash position decreased from $12.8 million at the end of 2005 to $3.5 million at the end of 2006, mainly reflecting cash used for operating activities of $9 million. 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: o Open IP architecture - Vigilant has developed a core solution architecture that is designed for the open, IP environment. Its main components include: (a) network based, distributed video server, enabling storage and viewing of live/playback streams from anywhere in the network; (b) remote viewer application, specifically designed to deliver high-quality video, live or playback, over any bandwidth-limited WAN; and (c) a set of certified encoders and IP & analogue cameras to ensure an end-to-end solution suiting the customer's requirements. o Surveillance center solution - Vigilant has released its NetView solution, an innovative surveillance center control application. The solution includes a comprehensive set of capabilities such as an industry-leading virtual matrix, pro-active alarm management, unlimited channels and monitor scalability. o Intelligent video solution - continuing its commitment to deliver an end-to-end, best-of-breed solution to its customers, Vigilant has incorporated a market leading video content analysis (VCA) module as an integrated part of its solution. Vigilant leveraged its video handling and processing competence to enhance and integrate the video analytics into a coherent, mature, and invaluable solution to its customers. Initial phases of this extensive product investment were already released to the market in early 2007. The end-to-end solution was demonstrated 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 A Vice President of global sales, with strong sales management experience, was appointed in March 2006. He has initiated a substantial expansion of the sales force and organised it globally into three regions, focusing on several vertical markets, including city centres, public spaces, traffic and transportation hubs, correctional facilities, gaming and financial institutions. Sales appointments were made progressively during 2006 and are now producing results. In the UK 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 continually 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 center in Exeter and Total Oil's Midlands fuel distribution depot in Tamworth, near Birmingham. These wins show a high level of confidence in Vigilant's systems and make the UK market currently the most successful market for Vigilant. In the US the Company continued to build its direct sales force as well as developing strategic relationships with key end-user customers and consultants under a new general manager. In addition to the appointment of a Vice President in charge of global sales, Vigilant has recently appointed a Vice President responsible for marketing. In the first quarter of 2006, Vigilant announced that its non-exclusive OEM (original equipment manufacturer) agreement with Pelco for the US market had been extended for a further year. However, orders from Pelco during 2006 were at a much reduced level than in 2005. The Company has not yet received any significant orders for the TBTA project and given the delays is no longer treating this as part of its sales pipeline. Strategy Vigilant's business strategy is to leverage its technical expertise in combination with a number of major players in the security industry, by forging partnerships with these market leaders. The market is moving decidedly in the direction of network based solutions, to which 3rd Generation solutions are ideally suited. The business model is based on the following approach: * Innovation - leading the wave of 3rd Generation security technology * Flexibility - small, quick and responsive * Quality - leading technology * Team work - pre-sales, sales & support * Meeting the timetable - mission critical solutions Outlook Against the backdrop of a very poor 2006, sales progress in 2007 is encouraging. The Company has achieved a revenue and order backlog for the first five months of circa $3.5 million, including prestigious projects in Luton, Sutton, Corby, Fakenham, Huntingdon, Kings Lynn and Lewisham Borough Councils and the Isle of Man's Jurby Prison. Based on the exposure of its IP end-to-end solution to the market at the ISCWest in Las Vegas and the IFSEC in Birmingham, we are very encouraged by the level of interest from prospective customers. We are confident of our ability to achieve and maintain a position of technology leadership and to develop sales and marketing programmes to build our revenues. The Board therefore believes that the Company is beginning to show the benefits of the investment which has been made. Consolidated statement of operations Year Year ended ended 31 December 31 2006 December 2005 U.S.$ U.S.$ In Thousands Revenues 985 8,169 Cost of revenues 1,316 3,210 Gross (loss) profit (331) 4,959 Research and development costs, net 2,976 2,027 Selling and marketing expenses 3,479 1,556 General and administrative expenses 2,429 586 Operating (loss) profit (9,215) 790 Financial income (expenses), net 573 (148) Damage costs from fire event (1,518) - Net (loss) profit before income taxes (10,160) 642 Income taxes (1,133) 691 Net (loss) profit for the year (11,293) 1,333 (Loss) earnings per ordinary share and ordinary share equivalent Basic (loss) earnings per share U.S$(0.2) U.S$0.047 Diluted (loss) earnings per share U.S$(0.2) U.S$0.046 Consolidated balance sheets 31 31 December December 2006 2005 U.S.$ U.S.$ In thousands Assets Current assets: Cash and cash equivalents 3,474 12,854 Trade accounts receivable, net 849 4,105 Other accounts receivable 387 376 Inventories 2,054 1,520 Total current assets 6,764 18,855 Non - current assets: Property and equipment, net 558 297 Deferred income tax - 1,133 Other assets, net 330 24 Total non - current assets 888 1,454 7,652 20,309 Liabilities and shareholders' equity Current liabilities: Trade accounts payable 1,064 1,290 Other accounts payable 878 2,257 Total current liabilities 1,942 3,547 Liability for employee rights upon retirement, net 157 154 Commitments, contingent liabilities and lien on assets Shareholders' equity 5,553 16,608 7,652 20,309 Consolidated statements of cash flows Year Year ended ended 31 December 31 December 2006 2005 U.S.$ U.S.$ In Thousands Cash flows used in operating activities: Net (loss) profit (11,293) 1,333 Adjustments required to reconcile net (loss) profit to net cash used in operating activities: Income and expenses not involving cash flows: Depreciation and amortisation 197 113 Provision for doubtful accounts 727 - Changes in accrued liability for employee rights upon Retirement 3 (76) Decrease (increase) in deferred taxes 1,133 (691) Recognition of compensation related to employee stock option plan 238 44 Changes in operating assets and liabilities items: Decrease (increase) in trade accounts receivable 2,529 (3,155) Decrease (increase) in other accounts receivable 2 (77) Income tax paid (9) (6) Decrease (increase) in deferred costs - 924 Increase in inventories (534) (639) (Decrease) increase in trade accounts payable (381) 337 (Decrease) increase in other accounts payable (1,676) 1,268 (Decrease) increase in deferred revenues - (1,369) Net cash used in operating activities (9,064) (1,994) Cash flows used in investing activities: Purchase of property and equipment (423) (140) Software license (190) - Net cash used in investing activities (613) (140) Cash flows from financing activities: Short-term bank loan and credit, net - (579) Interest received (paid), net 297 (127) Proceeds from issuance of share capital, net of issuance costs - 14,522 Net cash provided by financing activities 297 13,816 (Decrease) increase in cash and cash equivalents (9,380) 11,682 Balance of cash and cash equivalents at beginning of year 12,854 1,172 Balance of cash and cash equivalents at end of year 3,474 12,854 Supplemental disclosure of non-cash investing and financing activities: Investment in software license against a liability 155 - Notes to consolidated financial statements Note 1 - General The preliminary results for the year ended 31st December 2006 and the Comparative 2005 information are presented in accordance with International Financial Reporting Standards ("IFRS"). Note 2 - Earnings (loss) per share Earnings (loss) per share is based on the weighted average number of shares in issue for the year of 56,569,478 (2005: 28,106,546). The number of additional shares used for the calculation of the diluted loss per share (assuming conversion of share options and warrants for 2005, which includes the effect of dilutive stock option plans) is 884,758 shares. Note 3 - Reconciliation of movements in shareholders' equity Additional Number paid-in Accumulated of shares Amount capital deficit Total US$ US$ US$ In thousands Balance at 31 December, 2005 56,569,478 60 24,181 (7,633) 16,608 Changes during 2006: Amounts assigned to employees and - - 238 - 238 director stock-based compensation Net loss - - (11,293) (11,293) Balance at 31 December, 2006 56,569,478 60 24,419 (18,926) 5,553 Note 4 - Availability of accounts Copies of these accounts are available at Vigilant Technology Ltd. Offices at 34 Habarzel Street, Tel Aviv, Israel and from the Company's website www.viglianttechnology.com. This information is provided by RNS The company news service from the London Stock Exchange END FR OKCKDOBKDQAD
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