Vicon Industries, Inc. (NYSE MKT:VII), a global producer of
end-to-end security solutions, today announced its financial
results for the fourth quarter and fiscal year ended September 30,
2016.
In August 2016, the Company appointed John M. Badke as its new
CEO, after initially serving in an interim capacity after the
resignation of Mr. Fullerton. Mr. Badke, who joined the Company in
1992, continues to serve as the Company’s Chief Financial
Officer.
Mr. Badke said, “The Company’s results for the quarter were
negatively impacted by a number of factors, which in part, are
expected to linger through fiscal 2017. Revenues weakened across
all market segments due principally to a continuing reliance on
legacy product offerings and the continuing market effects of
previously reported camera line issues. Operating expenses included
a $2.0 million non-cash charge for the write-down of intangible
assets, but were otherwise significantly reduced as a result of
ongoing cost reduction measures".
Looking forward to fiscal 2017, the Company recently launched
its long awaited Valerus Video Management system platform, which
was designed to deliver the ultimate ease-of-use experience and
serve as the core foundation for Vicon’s long term technology
vision. Significant enhancements to this platform and the Company’s
camera line are planned for release through the end of fiscal 2017,
which should ultimately improve the Company’s market
competitiveness.
As previously announced, the Company secured an increased credit
facility of $6 million in the quarter to provide needed working
capital in fiscal 2017. However, the Company is currently
evaluating additional funding options and strategic alternatives to
finance its aggressive technology roadmap and growth initiatives
over the upcoming twelve month period. The Company will consider
all future cost cutting measures that will not impact its market
competitiveness or delay critical planned new product launches.
There are no guarantees that such plans will be successful.
Fourth Quarter Fiscal 2016 Financial Results
Revenues for the fourth quarter of fiscal 2016 decreased 42% to
$7.4 million as compared to $12.7 million in the fourth quarter of
fiscal 2015. The $5.3 million decrease in the current quarter
included a $4.8 million, or 45%, decrease in sales in the Americas
market and a $595,000, or 28%, decrease in EMEA market
sales. Revenues weakened across all market segments due
principally to a continuing reliance on legacy product offerings
and the continuing market effects of previously reported camera
line issues. In addition, prior year quarter revenue levels
included $1.2 million of non-recurring billings to a former
customer under an OEM supply contract. Order intake for the current
quarter decreased $3.8 million to $7.2 million as compared to $11.0
million in the fourth quarter of fiscal 2015.
Gross profit margins were 35.9% for the fourth quarter of fiscal
2016 as compared to 41.5% for the fourth quarter of fiscal 2015.
Current quarter margins were negatively impacted by certain
non-recurring inventory charges and the impact of fixed overhead
costs relative to reduced sales. Operating expenses for the fourth
quarter of fiscal 2016 increased $136,000 to $5.9 million compared
with $5.8 million in the fourth quarter of fiscal 2015. Operating
expenses for the fourth quarter of fiscal 2016 included a $2.0
million non-cash writedown of intangible assets. Excluding this
writedown, operating expenses decreased $1.8 million to $3.9
million for the fourth quarter of fiscal 2016 due to ongoing
selling, general and administrative cost reduction initiatives.
Net loss for the fourth quarter of fiscal 2016 was $3.3 million,
or $.35 per basic and diluted share, as compared to a net loss of
$467,000, or $.05 per basic and diluted share, in the fourth
quarter of fiscal 2015. Adjusted non-GAAP net loss for the fourth
quarter of fiscal 2016 was $1.5 million, or $.17 per basic and
diluted share, as compared to adjusted non-GAAP net loss of
$202,000, or $.02 per basic and diluted share, in the fourth
quarter of fiscal 2015. Please refer to the presentation at the end
of the table of operations for a reconciliation of our fourth
quarter GAAP net loss to our adjusted non-GAAP net loss for such
periods.
NYSE MKT Company Guide Required Disclosure
The NYSE MKT Company Guide Section 610(b) requires public
announcement of the receipt of an audit opinion containing a going
concern explanation. As disclosed in its Annual Report on Form 10-K
for the fiscal year ended September 30, 2016, the Company's audited
financial statements contains a going concern explanatory paragraph
in the audit opinion from its independent registered public
accounting firm.
About Vicon
Vicon Industries, Inc. (NYSE MKT:VII) is a global producer of
video management systems and system components for use in security,
surveillance, safety and communication applications by a broad
range of end users. Vicon’s product line consists of various
elements of a video system, including video management software,
recorders and storage devices and capture devices (cameras).
Headquartered in Hauppauge, New York, the Company also has
principal offices in Yavne, Israel; the United Kingdom and San Juan
Capistrano, California. More information about Vicon, its products
and services is available at www.vicon-security.com.
Special Note Regarding Forward-looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements relating to (i) our restructuring plan
expectations, (ii) our technology, new product launch and market
channel plans and (iii) our future cash flow and strategies. These
forward-looking statements are based on management's current
expectations and are subject to certain risks and uncertainties
that could cause actual results to differ materially from those set
forth in or implied by such forward looking statements. These risks
and uncertainties include, but are not limited to: our need for
additional financing; our ability to manufacture and develop
effective products and solutions; current and future economic
conditions that may adversely affect our business and customers;
potential fluctuation of our revenues and profitability from period
to period which could result in our failure to meet expectations;
our ability to maintain adequate levels of working capital; our
ability to successfully maintain the level of operating costs; our
ability to obtain financing for our future needs should there be a
need; our ability to incentivize and retain our current senior
management team and continue to attract and retain qualified
scientific, technical and business personnel; our ability to expand
our product offerings or to develop other new products and
services; our ability to generate sales and profits from current
product offerings; rapid technological changes and new technologies
that could render certain of our products and services to be
obsolete; competitors with significantly greater financial
resources; introduction of new products and services by
competitors; challenges associated with expansion into new markets;
failure to stay in compliance with all applicable NYSE MKT
requirements that could result in a delisting of our common stock;
and, other factors discussed under the heading "Risk Factors"
contained in our Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on May 29, 2014. All information
in this press release is as of the date of the release and we
undertake no duty to update this information unless required by
law.
Table of Operations
Vicon Industries, Inc.
Condensed Statements of
Operations
(Unaudited) Three Months Ended Year Ended September 30,
September 30,
2016
2015
2016
2015
Net sales $ 7,354,000 $ 12,737,000 $ 35,760,000 $ 44,884,000 Gross
profit 2,639,000 5,287,000 13,358,000 17,646,000 Operating
expenses: Selling, general and administrative expense 2,667,000
4,383,000 13,657,000 17,089,000 Engineering and development expense
1,243,000 1,371,000 5,193,000 5,063,000 Goodwill and intangible
asset impairment 1,979,000 — 7,996,000 — Restructuring charges —
— — 573,000 Total operating expenses
5,889,000 5,754,000 26,846,000 22,725,000 Operating loss
(3,250,000 ) (467,000 ) (13,488,000 ) (5,079,000 ) Gain on
sale of building — — 785,000 — Loss before income taxes
(3,296,000 ) (467,000 ) (12,774,000 ) (5,218,000 ) Income tax
expense — — — — Net loss
$ (3,296,000 ) $ (467,000 ) $ (12,774,000 ) $
(5,218,000 )
Loss per
share:
Basic $ (.35 ) $ (.05 ) $ (1.37 ) $ (.57 ) Diluted $ (.35 ) $ (.05
) $ (1.37 ) $ (.57 )
Shares used in
computing loss per share:
Basic 9,348,000 9,202,000 9,341,000 9,153,000 Diluted 9,348,000
9,202,000 9,341,000 9,153,000
The Company evaluates performance based on net loss and per
share results excluding stock compensation expense, the charge off
and amortization of acquired intangible assets, restructuring
charges and other non-recurring expenses and gains, which it
believes is useful to investors in evaluating ongoing results since
they are either non-cash or non-recurring in nature. Reporting
these adjusted results is not in accordance with U.S. generally
accepted accounting principles (GAAP). The following table provides
a reconciliation of reported net loss and related per share results
to adjusted non-GAAP net loss and related per share results.
(Unaudited) (Unaudited) Three Months Ended Year Ended September 30,
September 30,
2016
2015
2016
2015
GAAP net loss $ (3,296,000 ) $ (467,000 ) $ (12,774,000 ) $
(5,218,000 ) Adjusting items: Stock compensation expense (359,000 )
157,000 82,000 625,000 Amortization of acquired intangible assets
129,000 108,000 517,000 432,000 Restructuring charges — — — 573,000
Gain on sale of building — — (785,000 ) — Goodwill and intangible
asset impairment 1,979,000 — 7,996,000 —
Adjusted non-GAAP net loss $ (1,547,000 ) $ (202,000 ) $
(4,964,000 ) $ (3,588,000 ) Net loss per share - diluted $
(.35 ) $ (.05 ) $ (1.37 ) $ (.57 ) Adjusting items: Stock
compensation expense (.04 ) .02 .01 .07 Amortization of acquired
intangible assets .01 .01 .05 .05 Restructuring charges — — — .06
Gain on sale of building — — (.08 ) — Goodwill and intangible asset
impairment .21 — .86 — Adjusted
non-GAAP net loss per share $ (.17 ) $ (.02 ) $ (.53 ) $ (.39 )
Diluted shares outstanding 9,348,000 9,202,000 9,341,000
9,153,000
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version on businesswire.com: http://www.businesswire.com/news/home/20170113005726/en/
Vicon Investor RelationsCindy Schneider,
631-650-6201IR@vicon-security.com
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