Avigilon page post 2

In Canadian Dollars

Revenue
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
32,650        32,027        39,217        51,157        55,943        55,750        65,181        

Cost of Revenue
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
16,352        15,678        18,473        24,006        23,456        23,953        29,137

Gross Margin
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
16,298        16,349        20,744        27,151        32,487        31,797        36,044        

Net Income
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
3,046         2,798         3,392         8,622         6,744         8,040         2,779               

EPS (Basic)
4q12          1q13          2q13          3q13          4q13          1q14          2q14                   
.09           .07           .09           .22           .16           .19           .06          

Diluted Shares(000's)
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
39,748        40,551        40,398        41,369        42,673        44,498        47,042         

Inventories
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
11,906        13,139        14701         16,660        19,444        32,523        32,066

Cash
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
49,859        50,728        32,105        34209         104,875       60,125        156,732

Debt
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
0             0             0             0             0             0             0

Cashflow
4q12          1q13          2q13          3q13          4q13          1q14          2q14          
2143          157          (3,462)        2,083         6342          (11,067)      3,658 

Subject: Avigilon (Aiocf) Pink Sheets
Author: Buynholdisdead
Date: 10/5/2014
Sector: Technology
Industry: Hardware


Avigilon Corporation (Aiocf) Closing Price $14.90

Dow:17,009.69
Nasdaq:4,475.62
SP500:1967.90
Oil: $89.74
Nat Gas: $4.04
Unleaded Gas: $2.38
Gold: $1192.90
Silver: $16.83
Copper: $3.00
Corn: $323.25
Lean Hogs: $93.02
Feeder Cattle: $240.98
Coffee: $210.30
Cotton: $62.50
Lumber: $349.20

Today the Price is $14.90: The P/E ratio is 24.43

**February 29th, 2012 4Q:2011 earnings highlights:
**Revenues were $18.9 million up 85% from $10.2 million
**TTM Revenues were $60 million up 86% from $32.3 million
**Cost of Revenues were $9.3 million up 69% from $5.5 million
**Gross Profit were $9.6 million up 108% from $4.6 million
**Gross Profit Margin were 51%
**TTM Gross Profit were $27.6 million up 89% from $14.6 million
**TTM Gross Profit Margin were 46%
**Net Income were $1.6 million up from $(216) million
**TTM Net Income were $3.8 million up from $964 thousand
**4Q Earnings per share were $.05 up from $.00
**TTM Earnings per share were $.14 up from $.05
**Diluted share count were 31,021,287 up from 17,248,202 Year over Year
**4Q Cash Flow was ($.8 million) flat from ($.8 million)
**TTM Cash Flow was ( $4.5 million) down from ( $2.1million)
**Cash $12.4 million up from $2.3 million
**Debt 0 down from $1.8 Million
**Inventory for the quarter were 11,254,000 up 47% from 5,307,000 YoY

**May 10th, 2012 1Q:2012 earnings highlights:
**Revenues were $17.8 million up 78% from $10 million
**TTM Revenues were $67.8 million up 84% from $36.8 million
**Cost of Revenues were $9.3 million up 66% from $5.6 million
**Gross Profit were $8.5 million up 93% from $4.4 million
**Gross Profit Margin were 48%
**TTM Gross Profit were $31.6 million up 93% from $16.4 million
**TTM Gross Profit Margin were 47%
**Net Income were $647 thousand up from $121 thousand
**1Q Earnings per share were $.02 up from $.01
**TTM Earnings per share were $.15 up 150% from $.06
**Diluted share count were 34,832,000 up from 31,021,287 Quarter over Quarter
**Cash Flow for the quarter was ( $3 million) down from ($2.7million)
**Cash $9.5 million down from $12.4 million
**Debt 0
**Inventory for the quarter were 13,390,000 up from 11,254,000

**August 8th, 2012 2Q:2012 earnings highlights:
**Revenues were $24.4 million up 52% from $16 million
**TTM Revenues were $76.2 million up 71% from $44.5 million
**Cost of Revenues were $12.7 million up 35% from $9.4 million
**Gross Profit were $11.7 million up from $6.7 million
**Gross Profit Margin were 48%
**TTM Gross Profit were $36.6 million up 89% from $19.4 million
**TTM Gross Profit Margin were 48%
**Net Income were $1.3 million up 18% from $1.1 million
**2Q Earnings per share were $.04 flat from $.04
**TTM Earnings per share were $.15 up 88% from $.08
**Diluted share count were 35,040,000 up from 34,832,000 Quarter over Quarter
**Cash Flow for the quarter was $2.6 million up from ($2.5) million
**Cash $12.4 million up from $9.5 million
**Debt 0
**Inventory for the quarter were 9,755,000 down from 13,390,000

**November 7th 3Q:2012 earnings highlights:
**Revenues were $25.5 million up 69% from $15.1 million
**TTM Revenues were $86.6 million up 69% from $51.3 million
**Cost of Revenues were $12.5 million up 51% from $8.3 million
**Gross Profit were $13 million up 88% from $6.9 million
**Gross Profit Margin were 51%
**TTM Gross Profit were $42.7 million up 88% from $22.6 million
**TTM Gross Profit Margin were 49%
**Net Income were $2.2 million up 120% from $1 million
**3Q Earnings per share were $.06 up 50% from $.04
**TTM Earnings per share were $.17 up 89% from $.09
**Diluted share count were 36,436,000 up from 35,040,000 Quarter over Quarter
**Cash Flow for the quarter was $8 million up from $1.5 million
**TTM cash flow was $6.8 million up from ($4.4 million)
**Cash $45.6 million up from 12.4 million
**Debt 0
**Inventory for the quarter were 9,515,000 down from 9,755,000
**Trading range between $7.02 to $9.96
**P/E range 41.29 to 58.59
**P/S range 2.95 to 4.19

**February 28th 2013, 4Q:2012 earnings highlights:
**Revenues were $32.7 million up 73% from $18.9 million
**TTM Revenues were $100.3 million up 67% from $60 million
**Cost of Revenues were $16.4 million up 76% from $9.3 million
**Gross Profit were $16.3 million up 72% from $9.5 million
**Gross Profit Margin were 50%
**TTM Gross Profit were $49.4 million up 81% from $27.5 million
**TTM Gross Profit Margin were 49%
**Net Income were $3.1 million up 94% from $1.6 million
**Net Margin were 9%
**4Q Earnings per share were $.08 up 60% from $.05
**TTM Earnings per share were $.20 up 43% from $.14
**Diluted share count were 35,223,000 down from 36,436,000 Quarter over Quarter
**Cash Flow for the quarter was $2.5 million up from ($1.1 million)
**TTM cash flow was $10.1 million up from ($4.7 million)
**Cash $49.9 million up from 45.6 million QoQ
**Debt 0
**Inventory for the quarter were 11,906,000 up from 9,515,000
**Trading range between $10.60 to $12.26
**P/E range 53 to 61.3
**P/S range 3.72 to 4.31

**May 9th, 1Q:2013 earnings highlights:
**Revenues were $32 million up 80.4 % from $17.8 million
**TTM Revenues were $114.5 million up 69% from $67.8 million
**Cost of Revenues were $15.7 million up 69.3% from $9.3 million
**Gross Profit were $16.3 million up 92.5% from $8.5 million
**Gross Profit Margin were 51%
**TTM Gross Profit were $57.3 million up 81% from $31.6 million
**TTM Gross Profit Margin were 50%
**Net Income were $2,798 million up 332.5% from $647,000
**1Q Earnings per share were $.07 up 250% from $.02
**TTM Earnings per share were $.25 up 67% from $.15
**Diluted share count were 40,551,000 up 15% from 35,223,000 Quarter over Quarter
**Cash Flow for the quarter was $157 thousand up from ($3 million)
**Cash $50.7 million up from $49.9 million
**Debt 0
**Inventory for the quarter were 13,139,000 up 10% from 11,906,000
**Trading range $10.77 to $14.08
**P/E range 43.08 to 56.32
**P/S range 3.81 to 4.99

**August 8th, 2Q:2013 earnings highlights:
**Revenues were $39.2 million up 61% from $24.4 million
**TTM Revenues were $129.4 million up 70% from $76.1 million
**Cost of Revenues were $18.5 million up 46% from $12.7 million
**Gross Profit were $20.7 million up 77% from $11.7 million
**Gross Profit Margin were 53%
**TTM Gross Profit were $66.4 million up 82% from $36.5 million
**TTM Gross Profit Margin were 51%
**Net Income were $3.4 million up 162% from $1.3 million
**2q Earnings per share were $.08 up 100% from $.04
**TTM Earnings per share were $.29 up 93% from $.15
**Diluted share count were 40,399,000 down from 40,551,000 Quarter over Quarter
**Cash Flow for the quarter was ($3.5 million) down from $2.6 million
**Cash $32.1 million down from $50.7 million
**Debt 0
**Inventory for the quarter were 14,701,000 up 12% from 13,139,000
**Trading range between $14.84 to $18.07
**P/E range 39.55 to 62.31
**P/S range 1.51 to 5.64

**November 5th, 3Q:2013 earnings highlights:
**Revenues were $51.2 million up 101% from $25.5 million
**TTM Revenues were $155.1 million up 79% from $86.6 million
**Cost of Revenues were $24 million up 92% from $12.5 million
**Gross Profit were $27.2 million up 109% from $13 million
**Gross Profit Margin were 53%
**TTM Gross Profit were $80.5 million up 89% from $42.7 million
**TTM Gross Profit Margin were 52%
**Net Income were $8.6 million up 291% from $2.2 million
**3q Earnings per share were $.21 up 250% from $.06
**TTM Earnings per share were $.44 up 159% from $.17
**Diluted share count were 41,370,000 up from 40,399,000 Quarter over Quarter
**Cash Flow for the quarter was $2.1 million down 74% from $8 million
**Cash $34.2 million up from $32.1 million QoQ
**Debt 0
**Inventory for the quarter were 16,660,000 up 13% from 14,701,000
**Trading range between $14.63 to $20.08
**P/E range 33.25 to 45.64
**P/S range 3.90 to 12.17

**March 4th, 4Q: 2013 earnings highlights:
**Revenues were $55.9 million up 71% from $32.7 million
**TTM Revenues were $178.3 million up 78% from $100.3 million
**Cost of Revenues were $23.5 million up 43% from $16.4 million
**Gross Profit were $32.5 million up 99% from $16.3 million
**Gross Profit Margin were 58%
**TTM Gross Profit were $96.7 million up 96% from $49.4 million
**TTM Gross Profit Margin were 54%
**Net Income were $6.7 million up 123% from $3 million
**4Q Earnings per share were $.16 up 100% from $.08
**TTM Earnings per share were $.53 up 165% from $.20
**Diluted share count were 40,709,000 down from 41,370,000 Quarter over Quarter
**Cash Flow for the quarter was $6.7 million down 168% from $2.5 million
**Cash $105 million up from $34.2 million QoQ
**Debt 0
**Inventory for the quarter were 19,444,000 up 17% from 16,660,000
**Trading range between $25.99 to $31.00
**P/E range 49.03 to 58.49
**P/S range 5.93 to 7.08

**May 7th, 1Q: 2014 earnings highlights:
**Revenues were $55.8 million up 74% from $32.0 million
**TTM Revenues were $202.1 million up 77% from $114.5 million
**Cost of Revenues were $24 million up 53% from $15.7 million
**Gross Profit were $31.8 million up 95% from $16.3 million
**Gross Profit Margin were 57%
**TTM Gross Profit were $112.2 million up 96% from $57.3 million
**TTM Gross Profit Margin were 56%
**Net Income were $8 million up 186% from $2.8 million
**1Q Earnings per share were $.18 up 157% from $.07
**TTM Earnings per share were $.63 up 152% from $.25
**Diluted share count were 44,498,000 up from 40,709,000 Quarter over Quarter
**Cash Flow for the quarter was ($11.1) million down from $157 thousand
**Cash $60.1 million down from $105 million QoQ
**Debt 0
**Inventory for the quarter were 32,523,000 up 67% from 19,444,000
**Trading range between $18.59 to $29.94
**P/E range 29.50 to 47.52
**P/S range 4.09 to 6.59

**Aug 7th, 2Q: 2014 earnings highlights:
**Revenues were $65.2 million up 66% from $39.2 million
**TTM Revenues were $228 million up 76% from $129.4 million
**Cost of Revenues were $29.1 million up 57% from $18.5 million
**Gross Profit were $36 million up 74% from $20.7 million
**Gross Profit Margin were 55%
**TTM Gross Profit were $127.5 million up 92% from $66.3 million
**TTM Gross Profit Margin were 56%
**Net Income were $2.8 million down 18% from $3.4 million
**2Q Earnings per share were $.06 down 25% from $.08
**TTM Earnings per share were $.61 up 110% from $.29
**Diluted share count were 47,042,000 up 6% from 44,498,000 Quarter over Quarter
**Cash Flow for the quarter was $3.7 million up from ($3.5 million)
**Cash $156.7 million up from $60.1 million QoQ
**Debt 0
**Inventory for the quarter were 32,066,000 down from 32,523,000 QoQ
**Share based compensation 1%
**Trading range between $16.47 to $23.95
**P/E range 27 to 39.3
**P/S range 3.40 to 4.94


Revenue by Geographic Region Three months ended           March 31            March 31                % 
($ 000's)                                                 2014                2013                  Growth      
Canada                                                    4,244               3,563                  19% 
United States                                             35,038              18,187                 93%
United Kingdom                                            4,514               2,553                  77% 
EMEA                                                      14,783              11,133                 33% 
Asia Pacific                                              4,777               2,145                  123%
Latin America                                             1,825               1,636                  12% 
Total revenues                                            65,181              39,217                 66%

** We obtained Guobiao regulatory certification for certain of our products in China, allowing us to submit proposals for certain government and large private projects requiring security solutions;

**At the end of the second quarter of 2014, twenty-two patents have been issued to Avigilon and its subsidiaries for both design and utility applications;

** The image quality of the HD Pro camera series is made possible by Avigilon’s new H4 platform, with the latest edition of Avigilon’s proprietary HDSM technology, HDSM 2.0. Avigilon developed HDSM 2.0 to operate with the H.264 compression standard, simultaneously providing users with high- resolution imaging performance, further bitrate reduction of H.264 and the intelligence and flexibility of HDSM. This technology pairing provides a unique and superior network performance over systems solely utilizing H.264 compression, allowing for greater processing power, increased frame rate, improved image quality and smarter bandwidth and storage management. The result is high quality, detailed images with minimal network impact;

**ACC 5.2 was introduced in Las Vegas, USA at the ISC West 2014 trade show in April. As described in our MD&A for the first quarter of 2014, large organizations can keep distributed locations safe with features including cross-site groups, private bookmarking, alarm escalation and pick site-view location;

** In May, we announced the addition of the Rialto video analytics product family to our portfolio. Following Avigilon’s acquisition of VideoIQ, this release marked the introduction of industry-leading video analytics to Avigilon’s end-to-end security solution. The patented Rialto technology, when combined with high-definition video imaging, provides end-users with superior perimeter surveillance to help protect property, assets and personnel. The flexibility and ease of installation offers a cost- effective way for companies and end-users to integrate video analytics into their current analog or IP video surveillance system. The “Teach-by-Example” functionality of the Rialto family of products enables them to learn from end-user feedback in respect of the accuracy of alarms, increasing future accuracy and resulting in one of the lowest false alarm rates in the industry. This learning technology provides enhanced levels of protection, particularly suited for environments that require perimeter and intrusion security, such as critical infrastructure and commercial installations;

**In July, we released ACC 5.2.2, adding support for Rialto video analytics. ACC 5.2.2 now combines Rialto’s real-time event detection and verification capabilities with the award-winning performance of ACC

** At the IFSEC 2014 trade show in London, England, we announced the broadening of our access control portfolio with the launch of ACM 5.2. One of the most open and scalable access control products in the security industry, ACM 5.2 provides an IT-friendly solution for organizations of all sizes. This latest version extends the reach of Avigilon’s access control offering with a wider range of applications and enhancements that includes the introduction of the ACM Professional appliance. ACM Professional supports access control installations of up to 32 door reader licenses, to address the physical security needs of small to medium-sized sites. ACM 5.2 also features a strengthened integration with the ACC, deepening Avigilon’s end-to-end offering and enabling end-users to create a comprehensive Avigilon security solution. Users of ACM and ACC can seamlessly monitor both video and access control events and alarms through a single platform, enabling quicker response times and more efficient management of building security; and

** Also in June, our HD Micro Dome 1MP and 2MP cameras were made available with an in-ceiling mount. The industry’s smallest HD security camera, the Micro Dome cameras provide a cost-effective and easy transition into HD video surveillance.

Income Statement

This company is having phenomenal growth, its Revenue grew by 66% this quarter over last year. Its cost of sales was up 57% and it sits at 45% of revenue down from 47% last year. Their operating expenses are going up from 42% to 46% this quarter. They are still bringing on more sales staff to grow the business. They need to bring on more people so that they can grow their business. The CEO Mr. Fernandes says he plans on having approximately 900 employees at the end of the year. At this time they have approximately 586. They are not just looking for any employee though, they are looking for A players and B players that can become A players. Their Net Income took a hit this quarter due to the Foreign Exchange Loss. Canada has a stronger dollar and this caused a 2 million dollar loss which hit their EPS and Net Income.

Balance Sheet

Their Balance sheet improved dramatically, 160% QoQ, and they still have no debt. Their Inventory also went down a little. The CEO stated on the Conference Call that they use their inventory as a competitive edge. They call their Distributors Integrators. Well the Integrators do not hold any inventory, or very little, which allows them little risk. It is Avigilon that holds the inventory. CEO Fernandes says that they are able to provide the product with little turnaround so it helps them with their distributors. So the inventory will need to be watched because if Avigilon can’t sell their product we could see a big inventory increase.

Cash Flow

They were Free Cash Flow positive this quarter. Last years quarter they were negative. I also like that their share based compensation sits at 1%. This shows me that you can run a very successful company without throwing your shareholders down the well. I look forward to watching this company for many years.
Thanks to SeekingAlpha for their transcripts

2Q 2014 Conference call

Since they are building out their sales team I thought this was one of the more important statements on the conference call.

Alexander Fernandes

Yes, no I understand what you are referring to. So just to maybe rephrase the question for the other listener sake. So I think what you are referring to is our initial approach was really a geographic approach to generating sales. And what we’ve done more recently on top of our geographic strategy is we’ve created a new department within the sales team which is our business development and their mandate is to pursue enterprise level deals.
So to kind of give more color on that. So the geographic sales team which is the bulk of our sales team is really targeting primarily not exclusively, but primarily what we call a small and medium size system. So anywhere from a single camera, single software license up to lets a 100 cameras, 100 software licenses are sold and everything in between.
And that’s roughly globally about 80% of the industry, but there is what we call enterprise deals which are 100s and 1000s of camera type opportunities, so they are typically larger systems. We defined it as anything above a quarter million into the millions. And the sales cycles for these sales are much longer and the approach is different.
And so we created a business development team which has essential caved up the market not geographically but by industry vertical and so we have been working towards essentially building small groups of business development directors focused on specific verticals and that team is about half way built out and we are making great strides in increasing our market share within the enterprise business and I think that that’s what I think you are inquiring about. So we are making great progress there.

This is also another portion of the conference call that I thought was important. A lot of people are worried about competition. There is a lot of different people that are in this space but not many that integrate everything into one package. So the ones just making camera’s will see their margins slip while Integrator like Avigilon should see a premium on their product.

So I think those are the kind of larger trend I think as well as the commoditization of camera hardware which is something that we fully embrace and we fully expect is happening and going to continue happening and I think the emphasis will be less on the hardware although that’s an important piece, it will never go away but it will become more commodity, but it is really a shift toward if I may the buzz word big data for video, intelligent video as we add more value in sort of all that data mining and use of the data, so that those are the large macro trends that I see.

Conclusion:

Avigilon is still moving towards their stated goal of having a 500 million run rate by the end of 2016. I believe they will hit it. If you look at their revenue by geographical region which I posted above. You will see all regions are growing. Some by huge numbers. One of the Analysts on the conference call asked if any regions were slowing down and the CEO stated that all were seeing good growth but that it would be choppy. I thought by the numbers that Canada might have reached saturation so that will be something we need to watch. If Canada is saturated it wouldn’t worry me because there are so many other regions with large growth. This company’s share price has been drifting down. I have started buying aggressively because I think this is a great price. Nothing has come out on this company that should cause the share price to go down. I think what might be happening is that the Canadian market is going down due to the price of Oil coming down. What does that have to do with Avigilon? Nothing. But this is what you call a present and I love a sale.

Andy
Long Aiocf

http://discussion.fool.com/avigilon-page-post-1-31314294.aspx

11 Likes

Thanks, Andy, great post.

Neil

Thanks Neil congratulation on the nice cap you are wearing :slight_smile:

Andy

1 Like

Hi Andy,
Thanks for the detailed post.
I opened a small position but price has been going down since then.
Any comment on the price movement? is it just the general market?
There were some comments about US and Canadian dollars.

I was thinking of adding on this drop but wanted to understand better .
thanks
usha

Hey usha good to see you here.

There were some comments about US and Canadian dollars

Since they are a Canadian company and the Canadian dollar is stronger now they took a hit on the income statement last quarter due to fluctuations in currency. Hopefully they will learn to manage this in the future because most of their sales are done internationally especially in the U.S right now. But what has been hitting their stock right now I think has to do with Oil prices slipping down. Since the Canadian economy is highly dependent on oil and natural gas with the oil sands, and the price of oil and natural gas are down. It has caused the Toronto exchange to go down. The beauty of this is that they are forcing companies that have nothing to do with oil to go down. So could AIOCF go down further? Sure but I think this is a great time to buy and have been buying shares as it drops further. I am looking at this company and the long term growth potential. The digital ip based security cameras are now taking over the market from the analog market. I think since they have a turnkey solution where they give the complete package to their customer instead of having to go and find all the parts separately that they will do well in the market. So Usha I am buying but they could drop further, especially with the way the Toronto market is acting. But with a P/E of 24 and them growing the revenues in the 80% level doesn’t that seem just dirt cheap?

Andy

1 Like

Thanks Andy.
It is wonderful to have all of you taking the time to share your knowledge with novices like me.
one more question- since they sell the whole package, is there a razor and blade component to their business?
usha

Hey Usha,

since they sell the whole package, is there a razor and blade component to their business?
usha

This is a statement from their last financials.

Avigilon’s revenue is derived from the sale of HD, network-based video surveillance systems, video analytics and access control equipment for the global security market. The Avigilon system and its components are promoted by Avigilon sales staff and sold through a global network of Integrators.

I wouldn’t call their model a razor and blade model. If you were to go and buy their system, and then later on wanted to put more cameras into it, you could go with anyone else’s cameras. Avigilon’s system is made to be integrated with other competitors cameras. You can even integrate it with Analog cameras. But the CEO of Avigilon expects cameras , he even said that he wanted cameras, to become a commodity. What he is focused on is the software and analytical portion of his system. They have many upgrades to the software but they give that away for free on their website. They continually are innovating also which helps them stay ahead of their competitors.

I hope that helps.

Andy

1 Like

congratulation on the nice cap you are wearing

Thanks, Andy, but it’ll be short-lived :wink: It’s because of the BoardKeep announcement, which JSergeant kindly asked people to rec. Once that post is more than 30 days old, the cap will disappear. The same thing happened when I first started the FAQ here on this board.

It’s fun to have, but there are definitely more deserving folks around these parts.

Neil

Andy,
I had a question about the outstanding shares from your numbers. As I read through the quarters, I was struck by the diluted shares going from 40mil to 44 mil one quarter, then 44 to 47mill the next. Then you commented on 1% share dilution for compensation. Did they issue shares? Looks like outstanding shares has gone up significantly to me over a few quarters. Thanks for your thoughts.

Gator

1 Like

Well deserved Neil and its great that JSergeant got the information out to everyone. Thanks for being a great contributor to the community.

Andy

1 Like

Hi Gator,

I had a question about the outstanding shares from your numbers. As I read through the quarters, I was struck by the diluted shares going from 40mil to 44 mil one quarter, then 44 to 47mill the next.

Thanks for the question. I had to go back and look at the financials and this is what I dug up for the 1q2014

On April 8, 2014, the Company issued 3,448,280 common shares at a price of $29.00 per common share for gross proceeds of $100,000 (the “Offering”) in connection with an underwriting agreement (the “Underwriting Agreement”) dated March 21, 2014, between the Company and a syndicate of underwriters (the “Underwriters”). The Underwriting Agreement also provides an over-allotment option to the Underwriters that is exercisable in whole or in part at any time for a period of 30 days following the closing of the Offering, under which the Underwriters may purchase an aggregate of up to an additional 517,242 common shares at a price of $29.00 per common share.
The Company intends to use the net proceeds from the Offering for general corporate purposes and for potential strategic acquisitions.

I didn’t see any issue of shares in Q2 but I think you are right Gator, I need to find out why the share count rose so dramatically. Maybe I am counting the share dilution incorrectly. I went on the cash flow statement and took the share based payments and divided them by the revenue. Maybe that is incorrect. What does everyone think?

Another thing I noticed is in the Q2 report that some of my share numbers for previous quarters were updated. This made the quarterly reports incorrect according to their updated numbers. I think some of the shares get issued later in the year and then they go back and update the share count from previous quarters.

I am still looking into Q2 so give me a little time unless someone can shed some light.

Andy

I opened a small position but price has been going down since then.
Any comment on the price movement? is it just the general market?
There were some comments about US and Canadian dollars.

I was thinking of adding on this drop but wanted to understand better .

Usha,

I have a 3.7% position in AIOCF and I am down about 35% on it. The company is growing revenue at a fast pace. The company’s main goal is to hit $500M in sales in the next 2 years. They are hiring like mad to achieve that goal. The are essentially doubling the size of the company during 2014. Last quarter, earnings disappointed due to rising expenses (hiring and employing all those new people is hitting earnings growth). In my opinion, the next 2 quarters will post not so good y/y earnings growth numbers. Once the hiring slows (end of 2014) and sales continue to pick up the y/y earnings numbers will improve. For this reason, I have decided not to add to my position until after the next 2 earnings reports are released. I think the sweet spot for buying shares will be sometime between February and April of 2015 as the earnings growth in the 2nd half of 2015 should be much better. This is just my opinion on what is likely to happened. Also, I already own a medium sized position and I would be buying shares at these prices if I didn’t own any.

Chris

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Chris,
Could you look at the 1st quarter of 2014 and explains where they picked up all the dilutive shares? I can’t reconcile it. I see in the second quarter that they had an issuance of shares so I can understand why they picked up alot of shares for that quarter.

Andy

Could you look at the 1st quarter of 2014 and explains where they picked up all the dilutive shares? I can’t reconcile it. I see in the second quarter that they had an issuance of shares so I can understand why they picked up alot of shares for that quarter.
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Andy, I’d have to go back and look. I remember that they had a financing of new shares so it would be either that or issuance of new stock options. I would check to see when the financing actually closed. I don’t remember being concerned about the rate of stock options dilution when I first analyzed the company.

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Andy, I’d have to go back and look. I remember that they had a financing of new shares so it would be either that or issuance of new stock options. I would check to see when the financing actually closed. I don’t remember being concerned about the rate of stock options dilution when I first analyzed the company.

Thanks Chris, You are right they closed the financing of new shares in the second quarter but they added 3 million more shares in the first quater also. I have never tried to find all the shares that were issued in a quarter before. (Tried to break it down to exactly where they went) I only track the increase and now I am trying to track how much is going for compensation. I agree with you that I am not worried but now that Gator asked the question I have to find the answer :).

Andy

yes, I had some time to try to figure it out last night and couldn’t either. I do usually look at compensation dilution as a red flag in these small growers, and that was what caught my eye reading the q over q stats at top of post. Then I saw 1% when I had noticed share counts going up rapidly historically.

Thanks for any thoughts.

Gator

I do usually look at compensation dilution as a red flag in these small growers, and that was what caught my eye reading the q over q stats at top of post.

Its a great question Gator and I am still trying to figure it out also. I thought that you could get the numbers for share compensation on the Cash Flow statement but maybe I am incorrect. Give me some time to look this over and see exactly wher the dilution came from.

Thanks Andy

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Hi gator,
I talked to Tom E (TMF1000) about my share compensation numbers and he said they were correct. I did notice that they do issue alot of shares because they are trying to grow out the sales force around the world. I also noticed that they will state the shares to be a certain number and then the next quarter they will revise that number. I, personally, can not reconcile the shares to give a concise number so unforunately I can’t answer your question other than to say my numbers are correct when the report was written.

Andy