Aiocf 2011 2012 2013 1q2014
Revenue $60,033 $100,262 $178,344 $55,750 67% 78%
Cogs $32,576 $50,844 $81,613 $23,953
Gross Profit $27,457 $49,418 $96,731 $31,797
Gross Margin 46% 49% 54% 57%
Net Income $3,829 $7,169 $21,556 $8,040 87.23% 200.68%
Profit Margin 6% 7% 12% 14%
EPS $.14 $.20 $.53 $.19
Shares 30,770 35,223 40,709 44,498
Cash $12,418 $49,859 $104,875 $60,125
Debt $0 $0 $0 $0
Cash Flow $(4,740) $10,095 $5,102 ($11,067)
Andy, Thanks for those two helpful posts on Avigilon.
Saul
Cash Flow $(4,740) $10,095 $5,102 ($11,067)
Hi Andy,
Should we be concerned about the negative cash flow in the 1st Q? On another board one of the advisors mentioned that the first thing he looks at is can the company sustain itself on the cash flow from operations.
What do you make of the negative number? I understand they made a $32M purchase in the 1st Q but how would that affect this analysis? Is it a negative or how would you process that?
Thanks,
PS trying to learn and due to my tardy reply, I also sent this directly to you.
Mykie
Your welcome Saul. I am working on a page post and hopefully will have it out within a week.
Andy
Should we be concerned about the negative cash flow in the 1st Q? On another board one of the advisors mentioned that the first thing he looks at is can the company sustain itself on the cash flow from operations.
Mykie I would prefer all of my companies to be growing Revenue, positive income, and positive cash flow. But that isn’t always possible especially when they are small companies. This is riskier but can also be more profitable for you. You just want to make sure that you understand the risk and if it is acceptable.
This company is really easy to understand. They do security products. Cameras, servers, video recording devices all for corporations. The thing I like about the numbers I posted is how fast they are growing Revenue’s, how fast their net income is going up. They have a good amount of cash in the bank and no debt. But yes they are cash flow negative for the quarter. But they plan on 500 million in Revenue by 2016 and I think they will beat that. So Mykie it is nice to see cash flow positive and I would agree that it is essential. But companies have many levers to pull and Avigilon could have been cash flow positive if they decided to use their cash instead. I haven’t delved into the quarter yet Mykie so I am not sure exactly what they are doing but I like to see the profit margin going up. I am buying into this company because I am pretty excited about the growth and by 2016 I suspect we will not see any problems with negative cash flow.
The only red flag I see right now is the shake up in upper management. But I think that the CEO is trying to get together a team he can work with and that is why some of them had to go. (Just my opinion) When I get my page post done Mykie I should be able to answer all of the questions you have more fully.
Thanks,
Andy
I have to wonder if Nest (a subsidiary of Google) buying Dropcam on Friday will have an impact here. Not sure how much Dropcam and Avigilon overlap.
Mykie, in post #2039 GauchoChris answered the question about neg cash flow like this:
Acquisition that exceeded $30M. They must have paid cash which is good (assuming a good acquisition).
Acquisition that exceeded $30M. They must have paid cash which is good (assuming a good acquisition).
The computation I made was for Free Cash Flow Saul which is Net Cash provided by operating activities - cap ex. So while this acquisition was made with cash it could have been with a loan which would have affected the cash flow also (assets - liabilities = working capital) The only real way to find exactly what the company did is to read the financials and look at the notes. Here in note 3 the company explains how they paid for the acquisition.
- Business combination
On December 30, 2013, the Company signed a definitive agreement to acquire 100% of the outstanding shares of VideoIQ, Inc. (“VideoIQ”), a private company specializing in video analytics, for cash consideration of $36,159 ($33,226 USD). The acquisition was completed on January 13, 2014. VideoIQ provides real-time intelligent video analytics solutions for security and business intelligence applications and has a developed portfolio of video analytics intellectual property, with 40 patents granted or pending internationally, as well as trade secrets and know-how.
The Company believes VideoIQ’s proprietary technology, which includes live detection, event verification, instant notification, and self-learning capabilities will complement the Company’s innovative line of products and provide the Company with commercially proven analytics technology.
The purchase price allocation on the acquisition of VideoIQ has not been completed as of the date of the financial statements and as such, provisional amounts have been used to record the acquisition. The identified assets, liabilities, and unallocated purchase price below are management’s best estimates after taking into account all relevant information available at the time of preparation of the financial statements. The final purchase price allocation may vary from the amounts below as a result of new information obtained subsequent to the issuance of the financial statements about facts and circumstances that existed as of the acquisition date.
Andy
Looking at dropcam, utah, i would think it would be mostly a residential product. I don’t think that it is up to being a commercial product, yet. So I would say that Avigilon and dropcam will not be playing in the same market.
Andy
Andy
Are the numbers US dollar or Canadian dollar? I checked its filing and could tell exactly what it is. Thanks.
-M
Those are in Canadian dollars M.
Andy
Andy; thanks. I like the numbers. I checked their filings. I will open a starter position monday.
When I get my page post done Mykie I should be able to answer all of the questions you have more fully.
Thanks Andy,
I agree, a shake up of top executives is very destabilizing for a company. Some don’t get over it. But I own some of the stock and between the exec changes and no cash flow, I’m on alert.
I look forward to your detailed notes. I also signed up to get further press releases from them and will post anything of import here.
Mykie
Acquisition that exceeded $30M. They must have paid cash which is good (assuming a good acquisition).
Thanks,
I think I’ll spend some time looking for info on the CEO now, to see if he is a good capital allocator, has experience as such, etc.
Mykie
Interesting point utahchris. A company like Honeywell or Tyco would have the muscle to acquire Avigilon and shore up their commercial security line.