AIOCF down 27% on Q1 earnings

Saul your exit from AVO/AIOCF was timely! Revenue growth was good (35%), margin is increasing, but EPS is down 11% from last year. The market apparently did not like that. At all.

VANCOUVER, May 5, 2015 /CNW/ - Avigilon Corporation (“Avigilon” or the “Company”) (TSX: AVO), a leading global provider of end-to-end security solutions, today reported financial results for the three months ended March 31, 2015. All figures are in Canadian dollars unless otherwise stated.

First Quarter 2015 Financial Highlights

Revenue was $75.4 million, an increase of 35% over Q1 2014 revenue of $55.8 million.
Gross margin was 59%, up from 57% a year earlier.
Adjusted EBITDA was $11.2 million, a 2% decrease over Q1 2014 Adjusted EBITDA of $11.5 million.
Net income was $11.1 million, a 42% increase over Q1 2014 net income of $7.8 million.
Adjusted Earnings were $7.9 million, a 6% decrease over Q1 2014 Adjusted Earnings of $8.4 million.
Fully Diluted Adjusted Earnings Per Share of $0.17, compared with $0.19 in Q1 2014.
Excluding the impact of seasonal factors on the business, on a trailing 12 months basis revenue ending Q1 2015 has increased by 44%, gross margin was 57%, and Adjusted EBITDA has grown 30%.

“Avigilon delivered strong revenue growth and record gross margin in the first quarter, a testament to our competitive differentiation and proven business model” said Alexander Fernandes , Avigilon’s Founder, President, Chief Executive Officer, and Chairman of the Board. “We also continued to make substantial investments in the business to drive ongoing growth, as we remain committed to achieving our stated goal of $500 million in annual run-rate revenue by the end of 2016.”

Saul your exit from AVO/AIOCF was timely! Revenue growth was good (35%), margin is increasing, but EPS is down 11% from last year.

Other companies can grow both revenue and earnings. I want to be in those companies. Somehow Saul has done it yet again. Nice job on exiting this one before the stock price tanked. I’m really starting to believe that you have a sixth sense about when stocks are going to drop sharply!

Thanks Chris and Chris. Well he did make it clear that operating expense was going to rise as a percent of profits, which means earnings won’t go anywhere. I also want to be in the companies that can grow both revenues and earnings.

And I don’t always know when stocks will keep going down. I stayed in BOFI during the siesta it took last year because all the news was GOOD, and it was going down just because it had gotten ahead of itself. (I bought a lot more when it was between $65 and $85).


Thank you Saul!
You don’t probably know when to exit, but your records speak for itself. Definitely you have a “nose”. I exited Avigilon as you posted you did, and I opened a position in CRTO instead, and that allows me to have a good profit.
IOU that!

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Companies like Amazon and even Tesla can get away with this but apparently not AIOCF.
Of course AMZN and TSLA have a moat of sorts, which is hard for me to see in AIOCF.
At this point the question is to whether to sell existing shares , hold them, or buy more.
The company is a lot cheaper than was yesterday, and has a reasonable P/E, even if not allowing for much growth in earnings. Or “reasonable” compared to the general market, itself having inflated P/E ratios.

Recently I wanted to start a new position in either CRTO or AIOCF (AVO in TSX) and decided to enter in CRTO after learning AIOCF does not ‘care’ about its bottom line. (plus all the good stuff about CRTO) I’m glad what I did and I thank Saul and others for that.

Speaking of AIOCF, I have a similar question as mauser96. Is this a buying opportunity? I understand many of us here felt that they lost confidence in management and thus it’s time to move onto something else.

However, if R&D adversely affects its bottom line, shouldn’t that be paid off in future earnings? I know this has been a lingering problem for a while, but I’m just wondering if their capital allocation decisions are ineffective or do we just need to wait little more to see it paid off. If the cost control is ineffective in non-R&D expenses and there’s no signs of margin improvement, I guess my question here is irrelevant.


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