Vislink Technologies, Inc. (“Vislink” or the “Company”) (Nasdaq:
VISL) announced its results for the second quarter ended June 30,
2020. Company management will host a live webcast on Friday, August
14, 2020 at approximately 10:00 a.m. ET to review the Company’s
financial and operating results and provide a general business
update (see webcast details below).
Financial Highlights
- Revenues for the three months ended
June 30, 2020 were $6 million, compared to $5.4 million in the
first quarter of 2020 and $7.4 million for the three months ended
June 30, 2019.
- EBITDA (earnings before interest,
taxes depreciation and amortization) was a negative $421,000 for
the three months ended June 30, 2020, compared to a negative $3.9
million for the three months ended March 31, 2020 and a negative
$1.9 million for the three months ended June 30, 2019.
- Ended the second quarter 2020 with
$5.1 million in cash, compared to $2.5 million at the end of the
first quarter of 2020.
- Gross margins were 59.6% of revenue
in the second quarter of 2020, compared to 47% in the first quarter
of 2020 and 52.1% in the second quarter of 2019.
- Net loss attributable to common
shareholders was $778,000, or $(0.05) per share in the second
quarter of 2020 compared to a net loss of $4.4 million, or $(0.09)
per share in the first quarter of 2020 and a net loss of $3.6
million, or $(10.70) per share in the second quarter of 2019.
- Net loss attributable to common
shareholders was $5.2 million, or $(0.45) per share for the six
months ended June 30, 2020 compared to a net loss of $6.7 million,
or $(20.44) per share for the six months ended June 30, 2019.
Second Quarter Business
Highlights
- Right-sized the business through a focus on cost reduction and
conservation of cash.
- Addressed supply chain issues to improve efficiency and
increase liquidity.
- Created four solution areas: Live Event Production,
Military/Government, Satellite Communications and Managed
Services.
- Re-energized the Satcom solutions vertical.
- Realigned sales teams in line with target market
priorities.
- Re-prioritized research and development to maintain new product
pipeline and technical innovation.
- Reconstituted senior leadership and board of directors.
“In the second quarter, despite a challenging
business environment caused by the effects of the COVID-19
pandemic, we are pleased to report that our revenues increased by
11%, our net loss narrowed and EBITDA improved by $3.5 million
compared to the first quarter of 2020,” said Carleton Miller, CEO
of Vislink Technologies. “We built on the strong actions we took in
the previous quarter to make significant progress in our
turnaround, of which the first phase is now complete. By adhering
to the cost reduction plan that we previously instituted, in
addition to our ongoing focus on fiscal discipline, we were able to
realize significant improvements in our operations.”
Mr. Miller continued, “We have now rightsized
the organization across our four solution areas of Live Event
Production, Military/Government, Satellite Communications and
Managed Services, and we continue to see opportunities across these
areas that will drive top line growth for us in the future. With
our financial and operational foundations stabilized, we are
excited to embark on the second phase of our operational
turnaround, which will include increased operational efficiencies
and capital allocation to growth opportunities.”
Financial Results Webcast Details
On Friday, August 14, 2020, Vislink’s CEO,
Carleton Miller, and CFO, Michael Bond, will host a webcast at
approximately 10:00 a.m. ET to review the Company’s
financial and operating results and provide a general business
update. This webcast will be live
at https://services.choruscall.com/links/visl200814.html.
Investors will be able to submit questions during the webcast.
Non-GAAP Financial Measure:
EBITDA
To supplement our financial results presented in
accordance with Generally Accepted Accounting Principles (GAAP), we
are presenting EBITDA in this earning release and the related
earning conference call. EBITDA is a non-GAAP financial measure
that is not based on any standardized methodology prescribed by
GAAP and is not necessarily comparable to similarly titled measures
presented by other companies. We define EBITDA as our net income
(loss), excluding the impact of depreciation and amortization
expense and interest income/expense. We have presented EBITDA
because it is a key measure used by our management and board of
directors to understand and evaluate our operating performance, to
establish budgets and to develop operational goals for managing our
business. In particular, we believe that excluding the impact of
these expenses in calculating EBITDA can provide a useful measure
for period-to-period comparisons of our core operating
performance. About Vislink Technologies,
Inc.
Vislink is a global technology business
specializing in the collection, delivery, and management of high
quality, live video and associated data from the scene of the
action to the viewing screen. For the broadcast markets, Vislink
provides solutions for the collection of live news, sports, and
entertainment events. Vislink also furnishes the surveillance and
defense markets with real-time video intelligence solutions using a
variety of tailored transmission products. The Vislink team also
provides professional and technical services utilizing a staff of
technology experts with decades of applied knowledge and real-world
experience to the areas of a terrestrial microwave, satellite,
fiber optic, surveillance, and wireless communications systems, to
deliver a broad spectrum of customer solutions. Vislink’s shares of
Common Stock are publicly traded on the Nasdaq Capital Market under
the ticker symbol “VISL.” For more information, visit
www.vislink.com.
Note on Forward-looking Statements
Certain statements in this press release are
forward-looking statements that involve substantial risks and
uncertainties for purposes of the safe harbor provided by the
Private Securities Litigation Reform Act of 1995. This press
release contains forward-looking statements that involve
substantial risks and uncertainties for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995.
Any statements, other than statements of historical fact included
in this press release, including those regarding the Company’s
strategy, future operations, future financial position, projected
expenses, prospects, plans, objectives of management and financial
reporting abilities, maintenance of new product pipeline and
technical innovation, the Company’s expected focus on financial
discipline and cost reduction plans, planned adjustments to its
workforce, expected market opportunities across the Company’s
operating segments, the Company’s expectations as to its
operational turnaround, including operational efficiencies and
future capital allocation, the effects of the COVID-19 pandemic,
the sufficiency of the Company’s capital resources to fund the
Company’s operations and any statements regarding future results
are forward-looking statements. Vislink may not actually achieve
the plans, carry out the intentions or meet the expectations or
projections disclosed in any forward-looking statements such as the
foregoing and you should not place undue reliance on such
forward-looking statements. Such statements are based on
management’s current expectations and involve risks and
uncertainties, including those discussed in Vislink’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2019, filed
with the SEC on April 1, 2020 and in subsequent filings with, or
submissions to, the SEC.
The statements made in this press release speak
only as of the date stated herein, and subsequent events and
developments may cause the Company’s expectations and beliefs to
change. While the Company may elect to update these forward-looking
statements publicly at some point in the future, the Company
specifically disclaims any obligation to do so, whether as a result
of new information, future events or otherwise, except as required
by law. These forward-looking statements should not be relied upon
as representing the Company’s views as of any date after the date
stated herein.
For more information: investors@vislink.com
VISLINK TECHNOLOGIES, INC. AND
SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS (IN THOUSANDS EXCEPT NET LOSS PER
SHARE DATA)
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
6,008 |
|
|
$ |
7,352 |
|
|
$ |
11,360 |
|
|
$ |
15,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue and
operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of components and personnel |
|
|
2,427 |
|
|
|
3,516 |
|
|
|
5,248 |
|
|
|
7,643 |
|
Inventory valuation adjustments |
|
|
24 |
|
|
|
42 |
|
|
|
49 |
|
|
|
89 |
|
General and administrative expenses |
|
|
3,321 |
|
|
|
5,550 |
|
|
|
9,521 |
|
|
|
10,733 |
|
Research and development expenses |
|
|
559 |
|
|
|
866 |
|
|
|
1,215 |
|
|
|
1,792 |
|
Gain on lease termination |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
— |
|
Amortization and depreciation |
|
|
334 |
|
|
|
588 |
|
|
|
757 |
|
|
|
1,177 |
|
Total cost of revenue and operating expenses |
|
|
6,665 |
|
|
|
10,562 |
|
|
|
16,769 |
|
|
|
21,434 |
|
Loss from operations |
|
|
(657 |
) |
|
|
(3,210 |
) |
|
|
(5,409 |
) |
|
|
(5,876 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of derivative liabilities |
|
|
(98 |
) |
|
|
747 |
|
|
|
(81 |
) |
|
|
673 |
|
Loss on conversion of debentures |
|
|
— |
|
|
|
(48 |
) |
|
|
— |
|
|
|
(48 |
) |
Gain on settlement of related party obligations |
|
|
— |
|
|
|
— |
|
|
|
331 |
|
|
|
— |
|
Interest expense, net |
|
|
(23 |
) |
|
|
(1,064 |
) |
|
|
(49 |
) |
|
|
(1,414 |
) |
Total other income (expense) |
|
|
(121 |
) |
|
|
(365 |
) |
|
|
201 |
|
|
|
(789 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(778 |
) |
|
$ |
(3,575 |
) |
|
$ |
(5,208 |
) |
|
$ |
(6,665 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
$ |
(0.05 |
) |
|
$ |
(10.70 |
) |
|
$ |
(0.45 |
) |
|
$ |
(20.44 |
) |
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
14,805 |
|
|
|
334 |
|
|
|
11,460 |
|
|
|
326 |
|
Comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(778 |
) |
|
$ |
(3,575 |
) |
|
$ |
(5,208 |
) |
|
$ |
(6,665 |
) |
Unrealized gain (loss) on currency translation adjustment |
|
|
(28 |
) |
|
|
34 |
|
|
|
249 |
|
|
|
1 |
|
Comprehensive loss |
|
$ |
(806 |
) |
|
$ |
(3,541 |
) |
|
$ |
(4,959 |
) |
|
$ |
(6,664 |
) |
The accompanying notes are an integral part of
these condensed consolidated financial statements.
VISLINK TECHNOLOGIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(IN THOUSANDS EXCEPT SHARE AND PER SHARE
DATA)
|
|
June 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
5,065 |
|
|
$ |
1,737 |
|
Accounts receivable, net |
|
|
4,479 |
|
|
|
6,714 |
|
Inventories, net |
|
|
8,180 |
|
|
|
7,674 |
|
Prepaid expenses and other current assets |
|
|
874 |
|
|
|
660 |
|
Total current assets |
|
|
18,598 |
|
|
|
16,785 |
|
Right of use assets, operating leases |
|
|
1,654 |
|
|
|
1,925 |
|
Property and equipment, net |
|
|
1,846 |
|
|
|
1,972 |
|
Intangible assets, net |
|
|
2,391 |
|
|
|
2,922 |
|
Total assets |
|
$ |
24,489 |
|
|
$ |
23,604 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,789 |
|
|
$ |
6,784 |
|
Accrued expenses |
|
|
1,961 |
|
|
|
1,912 |
|
Notes payable |
|
|
412 |
|
|
|
339 |
|
Current portion of PPP loan |
|
|
424 |
|
|
|
— |
|
Operating lease obligations, current |
|
|
334 |
|
|
|
821 |
|
Due to related parties |
|
|
— |
|
|
|
505 |
|
Customer deposits and deferred revenue |
|
|
1,323 |
|
|
|
2,821 |
|
Derivative liabilities |
|
|
111 |
|
|
|
30 |
|
Total current liabilities |
|
|
7,354 |
|
|
|
13,212 |
|
Long-term portion of PPP loan |
|
|
744 |
|
|
|
— |
|
Operating lease obligations, net of current portion |
|
|
1,265 |
|
|
|
1,163 |
|
Total liabilities |
|
|
9,363 |
|
|
|
14,375 |
|
Commitments and contingencies
(See Note 10) |
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
|
|
Preferred stock – $0.00001 par value per share: 10,000,000 shares
authorized as of June 30, 2020, and December 31, 2019; 0 shares
issued and outstanding as of June 30, 2020, and December 31,
2019 |
|
|
— |
|
|
|
— |
|
Common stock – $0.00001 par value per share, 100,000,000 shares
authorized, 16,103,613 and 3,594,548 shares issued and 16,100,954
and 3,591,889 outstanding as of June 30, 2020 and December 31,
2019, respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
272,727 |
|
|
|
261,871 |
|
Accumulated other comprehensive income |
|
|
456 |
|
|
|
207 |
|
Treasury stock, at cost – 2,659 shares at June 30, 2020, and
December 31, 2019, respectively |
|
|
(277 |
) |
|
|
(277 |
) |
Accumulated deficit |
|
|
(257,780 |
) |
|
|
(252,572 |
) |
Total stockholders’ equity |
|
|
15,126 |
|
|
|
9,229 |
|
Total liabilities and stockholders’ equity |
|
$ |
24,489 |
|
|
$ |
23,604 |
|
The accompanying notes are an integral part of
these condensed consolidated financial statements.
Reconciliation of GAAP to Non-GAAP Results
VISLINK TECHNOLOGIES,
INC. RECONCILIATION OF GAAP to
NON-GAAP RESULTS QUARTER ENDING JUNE 30, 2020
(IN THOUSANDS)
Reconciliation of net income to EBITDA |
|
|
|
Net loss |
$ |
(778 |
) |
|
interest
expense |
|
(23 |
) |
|
Amortization and depreciation |
|
334 |
|
|
EBITDA |
$ |
(421 |
) |
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