Subject: Avigilon (Aiocf) Pink Sheets
Author: Buynholdisdead
Date: 11/16/2014
Sector: Technology
Industry: Hardware
Avigilon Corporation (Aiocf) Closing Price $17.45 on November 5th, 2014. The stock went up $4.37 the day after they reported.
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Today the Price is $16.22: the p/e is 25.34
**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
**Nov 4th, 3Q: 2014 earnings highlights:
**Revenues were $71 million up 39% from $51.2 million
**TTM Revenues were $247.8 million up 60% from $155.1 million
**Cost of Revenues were $30.8 million up 28% from $24 million
**Gross Profit were $40.2 million up 48% from $27.2 million
**Gross Profit Margin were 57%
**TTM Gross Profit were $140.4 million up 74% from $80.5 million
**TTM Gross Profit Margin were 57%
**Net Income were $11.6 million up 35% from $8.6 million
**3Q Earnings per share were $.25 up 14% from $.22
**TTM Earnings per share were $.64 up 39% from $.46
**Diluted share count were 47,288,000 up from 47,042,000 Quarter over Quarter
**Cash Flow for the quarter was $11.5 million up 448% from $2.1 million
**Cash $167 million up 7% from $156.7 million QoQ
**Debt 0
**Inventory for the quarter were 34,279,000 up from 32,066,000 QoQ
**Share based compensation 2%
**Trading range between $12.10 to $20.15
**P/E range 18.9 to 31.48
**P/S range 1.67 to 3.85
** HD dome and HD bullet cameras with embedded adaptive video analytics. Powered by their pattern-based, self-learning video analytics technology. These intelligent cameras automatically adjust to changing scene conditions and continue to adapt to scene changes without the need for manual calibration, delivering a new level of performance and ease of installation. They also utilize a breakthrough teach-by-example technology that not only enable the analytics to learn continuously by watching the scene and also learns from operators actively using the system. This is made possible from their acquisition of VideoIQ.
**ACC 5.4 The newest version of the Avigilon Control Center software features complete support for configuration and management of their entire range of video analytics products. The end to end solution provides users with highly accurate real-time alarms in a unified platform.
** HD video appliance series. These new low cost solutions enable Avigilon to effectively compete in budget constrained opportunities. These all in one solutions allow end users to reduce both installation time and cost by combining a Power over Ethernet network switch along with full video management server and client software capabilities into a single compact form factor. The HD Video Appliance is powered by their ACC software which comes pre-installed and configured, enabling end users to experience the benefits of ACC and our patented HDSM technology immediately, such as intelligent bandwidth, storage management, and faster search times.
**received patent number US 8,831,090 on their HDSM technology by the United States Patent and Trademark Office.
Revenue by Geographic Region Three months ended
September 30th %
($000's) 2014 2013 Growth
Canada 4,433 4,462 -1%
United States 39,751 27,437 45%
United Kingdom 5,795 3,791 53%
EMEA 15,505 10,564 47%
Asia Pacific 3,006 2,364 18%
Latin America 2,482 2,364 5%
Total revenues 70,972 51,157 39%
Avigilon is a Canadian company that designs and manufactures HD and megapixel (“MP”) network-based (IP) video surveillance systems, video analytics and access control equipment for the global security market. The system is designed to provide high quality video capture, analysis, transmission, recording, playback and physical access control. The system can be designed to not only work with legacy analog cameras but also the new digital cameras. This is a highly fragmented market and is projected t reach US $23.2 billion by 2016. The new era of security cameras is digital with the digital cameras projected to grow at over 24% cagr to 2016. According to IHS research in a study done in 2012 the 15 largest suppliers accounted for 43.5% of the market in 2011 and no company commanded more than a 5.9% share of the market.
Income Statement
Revenue grew at 39% Yoy. Avigilon is growing their sales staff in all regions and the regions with the highest growth in sales staff saw the largest increase in growth. Cost of Revenues (Sales) was up 28%. As sales goes up so does the Cost of Sales. The cost of sales was made up of materials, components, manufacturing labor and overhead costs and transportation costs and other supply chain management costs. While Cost of sales was up 28% as a percentage of sales it was down 4%. Gross Profits were up 48% and this was due to favorable foreign exchange gains, product mixes, and lower manufacturing efficiencies. As a percentage of revenue Gross Profits were up 4%. Sales and Marketing increased by 50%. This is part of the companies plan to grow the company. As a percentage of revenue sales and marketing was up 2%. R and D increased by 28% this quarter and was 9% of revenue compared to 6% of revenue in 2013. General and Administrative expenses increased by $5.2 million and were 13% of revenue compared to 7% of revenue in 2013. G & A expenses consist of cost relating to wages, information systems, customer and technical support, legal and finance functions, professional fees, insurance, and other corporate expenses. The year over year increase is largely due to additional personnel and the related expenses to support the business growth. As the build out their infrastructure you can expect G & A expenses to increase to support planned growth. Net Income increased by 35% and as a percentage of revenue it was 16%. The increase is due to expansion into international markets.
The income statement is still growing and has shown improvement YOY and sequentially.
Balance Sheet
Cash was up 7% QoQ and inventory was up 7%. Their debt still sits at $0. Their property and equipment costs were up 44%. This is partially due to the expansion of their Richmond, British Columbia manufacturing plant. They now have a total manufacturing space of 61,000 square feet. They now have enough manufacturing space to accommodate up to $500 million in annual revenue without the need for significant additional capital expenditures.
The balance sheet is also stronger with debt at 0 and Cash up QoQ.
Cash Flow Statement
Cash flow was up 448% this quarter YOY. The biggest reason for this increase was due to the increase in Net Income. Net Cash from operating activities is at $14 million with net income making up $11.6 million of that. It seems to be working as their Revenue keeps growing, their Income keeps growing, their cash keeps growing, and their Cash flow keeps growing
The Cash flow Statement is strong with Cash flows up 448%.
Conclusion
Avigilon is continuing to hire Sales Managers and Directors in new and existing regions. They feel by doing this in existing regions that they can drive higher sales and in new regions it allows them to get recognition of their product out there. I would say that they are running the business very well. The CEO Alexander Fernandes stated on the conference call that he expected the low end of the market in security cameras to be commoditized. One of the analysts stated that it seemed to be happening faster than planned and Alexander stated that it didn’t surprise him but that they were not seeing any pricing pressures and that was evident in their robust gross margins and profitability. He also stated that they were producing a low cost HD equipment not in order to discount to win sales but to provide a value product for end to end solutions. Fernandes wanted to make it clear in the conference call that there wasn’t a clear leader in the market. But that Avigilon was the fastest growing company. He said that while there are large companies in the market that none of them own even 10% of the market. He also stated that many of them have lost their focus because they are involved in many more markets than just security. Fernandez also stated that he plans on hitting his revenue target of $500 million by 2016 even at that number they will still have plenty of growth available since the market by 2016 will be sitting at $30 billion dollars. That means at that point they will have 2% of the market with 98% of the market still to go. This is a fast growing company and they seem to be doing everything right. Their stock price came down and I believe that it was because the Canadian markets were hit because of oil prices. The Toronto stock market seems to be dominated by oil companies since on the Toronto exchange there are more oil and gas companies than any other stock exchange in the world. I believe since the Toronto exchange tanked they threw out Avigilon along with the oil companies.
My thesis on this is that everyone wants security cameras. They need to have them to stop crime, for crowd control and to monitor possible terrorist situations. The new digital cameras have astonishing clarity and they are able to do more to monitor all scenes. This will cause a huge upgrade from Analog cameras, and will provide a big opportunity for Avigilon. I have only one question to anyone who is reading this. If you haven’t looked at Avigilon, why haven’t you?
Andy
Long Avigilon
http://discussion.fool.com/avigilon-page-post-2-31441337.aspx
I was just making the point that, for the long-term investor, it’s going to be the post-conversion market that matters and not the sizes being quoted for 2016 (which certainly reflect conversion from analog to digital), and the good news is that it looks like that market should still be plenty large enough to provide Avigilon with a nice runway for continued growth.