SENSIO Presents Its 2013-2014 Second Quarter Financial Results
The number of 3DGO! registered users and movie rentals continue
to grow in the second Quarter
MONTREAL, QUEBEC--(Marketwired - Jan 23, 2014) - SENSIO
Technologies Inc. ("SENSIO" or "the Company") (TSX-VENTURE:SIO)
presented today its second quarter financial results for 2013-2014.
In the second quarter, Company's revenues had climbed to $440K from
$203K in the same period last year. Second quarter revenues were
reported at $130K, up $38K or 41% compared to the same quarter last
year.
Second quarter losses this year equaled $1.2M, which is $153K
more than second quarter losses last year. This is primarily due to
the impairment of advances on royalties that had previously been
paid to studios as part of 3DGO!™ operations. This non-monetary
expense was recognized to reflect the unrecoverable portion of
advance royalty payments based on the Company's assessment. That
depreciation excluded, losses for the quarter amounted to $818K and
operating expenses totaled $937K, a drop of $167K, or 16.5%,
compared to the same quarter in the previous year. This is the
direct result of the cost-cutting program implemented by
SENSIO.
"In the second quarter, we had to recognize a depreciation in
the advances on royalties paid to certain studios. This contributed
to the rise of our costs and our quarterly loss, but it hasn't
impacted our liquidities," said Nicholas Routhier, President and
Chief Executive Officer. "The significant investment in content was
needed to launch 3DGO! and to attract new customers, both
manufacturers and consumers. In fact, that investment is what led
to the announcement with Panasonic last quarter. We're currently
renegotiating content distribution rights with the studios so that
advances reflect existing and projected volumes for 3DGO!™. We're
also very much encouraged by the increase in movie rentals and by
the interest that 3D electronics manufacturers have shown in
3DGO!™. With the planned addition in the fourth quarter of
Panasonic 3DTVs, WiLAN's current negotiations with certain
manufacturers and the potential addition of a new patent program,
we believe we're on the right track to see interesting revenue
growth in the upcoming quarters."
Highlights of the second quarter ended November 30, 2013
- Agreement signed with Universal Studios to offer new 3D titles
on 3DGO!™;
- Two key European patents obtained for S2D Switch technology and
Hi-Fi 3D;
- Closing of private placement announced June 4, 2013, for net
proceeds of $2,670,000;
- Revenues of $129,522 in the second quarter and $440,001 in the
first six months; the previous year saw $92,433 in the second
quarter and $203,297 in the first six months;
- Decrease in operating expenses, excluding the cost of sales, of
16.4% compared to the same quarter last year and of 10.5% over the
first six months of the fiscal year.
Home consumer market
In the second quarter of fiscal 2014, the Company recorded
licence revenues of $111,294, up from $92,433 in the quarter ended
November 30, 2012. The increase of $18,861 is due in large part to
royalties from 3DTV sales over the quarter.
"We've been seeing slightly higher activity over the past few
months, which is in line with our expectations," Routhier
commented. "For a while now, we've noticed more articles claiming
that 3DTV is dead because of things like ultra-high-definition
television (UHDTV), also known as 4K. A recent study by Future
Source challenges that claim, stating that the increase in 3DTV
sales will continue into 2017, when they will reach over 155
million units. At the last CES, we demonstrated that 4K TVs, rather
than threatening 3D, actually offer a superior 3D experience, and
we firmly believe that SENSIO will benefit from that new trend. The
anticipated growth of the 3DTV market opens the market up to
technology licences and patents, and we're going to redouble our
efforts in terms of patent licensing programs in the next quarters.
We remain positive about the potential of the 3DTV market."
Content rental: growing number of users and rentals
In the second quarter, revenues from movie rentals jumped to
$18,228 from $8,469 in the previous quarter, up $9,759 or 115%. In
the same period, the number of 3DGO! users climbed from 3,089 to
8,019, an increase of 160%. At second quarter end, there were 2,693
active users, which was up from 894 at the end of last quarter. In
the second quarter, active users rented 2,877 paid titles, compared
to 1,354 in the first quarter.
"Our direct marketing efforts with Vizio are starting to pay
off, especially among new buyers of 3DTVs," said Routhier.
"Although we're having a harder time than expected in reaching
existing 3DTV owners, we're seeing strong growth in the user rate
among new buyers, which is a good sign for what's to come, because
it means we're building a loyal user base for the future. After a
few months of operation, we're encouraged by the gain in the number
of people using the service and by the estimated rental repeat rate
of active users since it leads us to believe that there's real
demand for high-quality 3D VOD service. We've learned a lot in the
last months, and we're going to use that experience to maximize the
impact of having Panasonic 3DTV owners join us in the fourth
quarter of this year. We remain very enthusiastic about the
potential of 3DGO! across different platforms."
Summary of Financial Results
In the second quarter of fiscal 2014, the Company posted
revenues of $129,522 compared to $92,433 in the quarter ended
November 30, 2012, an increase of $37,089 or 40.1%. The higher
licence revenues can be explained by an increase of $18,602 in
royalty revenues resulting from agreements signed with CE
manufacturers for SENSIO technologies. The launch of 3DGO!™
video-on-demand platform contributed as well by generating $18,228
during the quarter ($0 in the comparative quarter).
For the three months period ending November 30, 2013, the cost
of sales amounted to $362,845 compared to $3,707 for the compared
quarter one year ago. This increase of $359,138 is mainly
attributable to the impairment of advance royalty payments of
$345,397 incurred and paid previously to studios for operations
related to 3DGO!™. This non-monetary expense is recognized to
reflect the advance on royalties that won't be recoverable
according to the Company's estimation. These disbursements done in
the past quarters gave credibility to the 3DGO!™ platform and allow
ultimately the Company to sign an agreement with Panasonic. The
management is confident that other manufacturers will follow in the
coming quarters. The content rental royalties of $10,420 that
diminished the advance royalty payments explained the increase as
well.
If we exclude the cost of sales from the operating expenses for
the quarter, the operating expenses were reduced of $180,735 or
16.4% when compared to corresponding quarter of the previous year.
The selling expenses totalled $412,618 compared to $594,734 in the
corresponding quarter the previous year, a decrease of $182,116 or
30.6%. Lower payroll, fees paid to consultants and traveling fees
offset by higher costs for the launch of 3DGO!™ in the three-month
period explains the variance.
The Company's research and development expenses amounted to
$181,963 compared to $154,168 in the second quarter of the previous
year, an increase of $27,795 or 18%. The increase is explainable by
severances paid to two employees. The decision taken by the
management was part of the cost-cutting program in order to reduce
the Company's expenses.
Administrative expenses for the quarter ended November 30, 2013
amounted to $324,573 compared to $350,987 for the second quarter of
the previous year, a decrease of $26,414 or 7.5%. This decrease is
mainly explainable by a decrease of the depreciation assets
expense.
SENSIO's net loss for the quarter ended November 30, 2013
amounted to $1,163,646 ($0.02 per share) compared to $1,010,819
($0.02 per share) as at November 30, 2012.
Selected Financial information
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|
Fiscal year 2014 |
|
|
|
|
|
Fiscal year 2013 |
|
|
Fiscal year 2012 |
|
|
|
|
T2 |
|
|
T1 |
|
|
T4 |
|
|
T3 |
|
|
T2 |
|
|
T1 |
|
|
T4 |
|
|
T3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
129 522 |
|
$ |
310 479 |
|
$ |
76 267 |
|
$ |
112 792 |
|
$ |
92 433 |
|
$ |
110 864 |
|
$ |
90 651 |
|
$ |
679 913 |
|
$ |
|
Net loss |
(1 163 646 |
) |
$ |
(729 917 |
) |
$ |
(976 170 |
) |
$ |
(980 761 |
) |
$ |
(1 010 819 |
) |
$ |
(895 248 |
) |
$ |
(1 322 159 |
) |
$ |
(870 844 |
) |
$ |
|
Basic and diluted loss per share |
(0,02 |
) |
$ |
(0,01 |
) |
$ |
(0,02 |
) |
$ |
(0,02 |
) |
$ |
(0,02 |
) |
$ |
(0,02 |
) |
$ |
(0,03 |
) |
$ |
(0,02 |
) |
$ |
|
Basic and diluted weighted average number of
shares |
76 971 787 |
|
|
63 019 342 |
|
|
63 019 342 |
|
|
63 019 342 |
|
|
60 696 110 |
|
|
52 512 544 |
|
|
52 487 797 |
|
|
52 487 797 |
|
|
For more details, please see the Management Discussion and
Analysis and the Financial Statements for the reference period on
the SENSIO Website: www.sensio.tv.
About SENSIO Technologies Inc. (SENSIO):
Founded in 1999, SENSIO Technologies Inc. (www.sensio.tv) is a
pioneer in the 3D industry. Its vision, expertise and
state-of-the-art solutions, based on diversified stereoscopic
image-processing technologies, have been trusted by some of the
biggest names in the broadcasting and consumer electronics sectors,
as well as for live 3D events in cinemas, to power numerous
industry firsts, initiate new business models and generate
immediate revenue with a distinctive 3D offering.
SENSIO enables its clients to deliver the best possible 3D
experience for the end-user through a broad portfolio of licensed
products, based on quality, content, usability and compatibility.
These include its flagship, award-winning technology, SENSIO® Hi-Fi
3D, the premium-quality frame-compatible format.
SENSIO's technologies are the object of patents and intellectual
property protection proceedings worldwide. SENSIO is listed on the
Toronto TSX Venture Exchange (SIO).
Caution Concerning Forward-Looking Statements
Certain statements made in this press release that are not
historical facts are forward-looking statements and are subject to
important risks, uncertainties and assumptions, both general and
specific, which give rise to the possibility that actual results or
events could differ materially from our expectations expressed in
or implied by such forward-looking statements. As a result, we
cannot guarantee that any forward-looking statement will
materialize and readers are cautioned not to place undue reliance
on these forward looking statements. For more exhaustive
information on these risks and uncertainties, the reader should
refer to the risk factors described in the management's discussion
and analysis of SENSIO for the quarter ended November 30, 2013. The
forward-looking statements contained in this press release
represent our expectations as of the date hereof. We disclaim any
intention and assume no obligation to update or revise any
forward-looking statements. Forward-looking statements are
presented for the purpose of providing information about
management's current expectations and plans and allowing investors
and others to obtain a better understanding of our anticipated
operating environment. Readers are cautioned that such information
may not be appropriate for other purposes.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SENSIO TechnologiesEric ChoquetteChief Financial Officer+1 514
846-2022 x17eric.choquette@sensio.tv