Annual EBITDA growth of 31% Adjusted cash flow from operations up 80% Y-o-Y

Transcription

1 Vizrt Reports Q4 and 2014 Results Annual EBITDA growth of 31% Adjusted cash flow from operations up 80% Y-o-Y - 1-

2 Bergen, Norway, February 11, Vizrt Ltd. (Oslo Main List: VIZ) Vizrt today reported its financial results for the fourth quarter and the full year FOURTH QUARTER 2014 HIGHLIGHTS Quarterly revenues of MUSD 36.2, up 9% compared to Q EBITDA of MUSD 9.0, corresponding to a 25% margin, up 14% compared to MUSD 7.9 (24%) in Q Cash generation from operating activities of MUSD 7.3, up 25% compared to MUSD 5.8 in Q FULL YEAR 2014 HIGHLIGHTS Revenues of MUSD 141.5, up 16% compared to MUSD in FY EBITDA of MUSD 32.4, corresponding to a 23% margin, up 31% compared to MUSD 24.7 (20%) in FY Adjusted cash generation from operating activities of MUSD 35.3, up 80%, as compared to MUSD 19.6 in FY 2013 (adjusted for MUSD 18.0 one-off taxes on income paid for the settlement reached with the Israeli tax authorities in Q2 2014). First time that adjusted cash flow from operating activities exceeded EBITDA for the year. ANNUAL BUSINESS HIGHLIGHTS Revenue growth of MUSD 19.1 Y-o-Y consisted of MUSD 14.1 organic BG growth and MUSD 6.1 attributable to the Mosart acquisition, offset partially by a MUSD 1.1 decrease in MAM revenues. Geographically, EMEA achieved very strong annual revenue growth of 32% while APAC also achieved a double digit growth (11%) over last year. Having achieved 28% growth in 2013, AMECS revenues were relatively stable (2% down from LY). The improvement in profitability was mainly due to a change in product mix, consistent financial prudence and the acquisition of Mosart. The very strong cash generation from operating activities is attributable mainly to accelerated collection from customers. Solid backlog of MUSD At the extraordinary annual meeting held on December 18, 2014, the majority of shareholders approved the entry of the Company into a merger agreement as announced on November 10, pursuant to which Nordic Capital Fund VIII* will pay a cash consideration of NOK 37 (less withholding tax, if applicable) per Vizrt share for 100% of the issued share capital of the Company by way of a reverse triangular merger. Final closing date of the transaction is subject to certain conditions, including the decision of Israeli tax authorities regarding tax withholding ruling, as announced on January 30, * Nordic Capital VIII Limited, acting in its capacity as General Partner of Nordic Capital VIII Alpha, L.P. and Nordic Capital VIII, Beta L.P. ANNUAL PRODUCT DEVELOPMENT HIGHLIGHTS During 2014, we continued to develop our product offering, resulting in further strengthening of our technology and market leadership positions. Our solutions deliver faster live productions, from video and graphics production to multiplatform distribution, while utilizing fewer resources in the process. - 2-

3 Launch of VizMultiplay: a control system for a variable number of studio screens, which together with our Viz engine, which can drive up to 8 simultaneous HD outputs, is already in use by several major stations. This combination is driving the largest screen set ups (video walls) in the industry. Launch of Viz Opus, a complete broadcast control and studio production solution running from a single system. Viz Opus won the News Technology Award back in October. The Viz One MAM system, which manages all content in a central repository, has become integrated with other product offerings and has met with success through application in several large and small installations. Fundamental expansion of functionalities and tasks performed by the Viz engine- the Viz engine can now be used as a video playout server, as well as a vision mixer, creating today s most powerful rendering engines and real-time compositors of graphics and video. Further strengthening of Vizrt s sports offering: major sports events, including the football world-cup, saw the application by multiple stations of Viz Arena virtual graphics insertion for sports, as well as Viz Libero with the new superfast player tracking. Viz Engine and Viz Trio were used for 4K world-cup productions. Continued strengthening of market leadership: All major US networks used Viz graphic systems for midterm election coverage. Continued expansion of the Company s customer base in all regions. Several accolades awarded to customers, directly related to their excellent implementation of our technology. All of the abovementioned items contribute to the strength of our integrated solutions offering platform, making our platform stronger and even more future proof. MANAGEMENT SUMMARY Martin Burkhalter, Vizrt s CEO, stated: Our strong performance continued in Q4, despite the fact that we did not see the discretional spending towards the year-end that we normally have witnessed in previous years. Our strong performance is also reflected in our solid backlog going forward. I am particular pleased with the improvement of MAM results and the MAM backlog which increased by 37% compared to the same time last year. With record revenues and a 36% improvement in our EBIT over 2013 and exceptional strong cash flow, this past year has been very good for Vizrt. We can also state already that the Mosart acquisition has proven to be a very valuable addition to our product portfolio. The strategic logic behind the acquisition is strongly validated by the market reception, the sound revenue generation in 2014, as well as the opportunities we see in our pipeline. We continue to improve our product offering. Meeting and surpassing customer expectations is at the center of our focus today, as it has been since the very beginning of Vizrt. Staying relevant in a fast changing media industry, by addressing current and future industry needs of both traditional media houses and new players on the market, is at the very heart of our strategy and daily operational focus. - 3-

4 SELECTED FINANCIAL INFORMATION (INCLUDING NON GAAP DATA) RESULTS OVERVIEW In KUSD Q Q Change Q Chang e Change Revenue 36,229 33,325 9% 35,193 3% 141, ,412 16% Gross Profit 25,763 23,099 12% 25,158 2% 98,839 82,758 19% Gross Margin 71% 69% 71% 70% 68% EBIT 7,870 1, % 7,221 9% 27,734 15,507 79% EBIT-Margin 22% 5% 21% 20% 13% Recurring EBIT* 7,870 6,641 19% 7,221 9% 27,734 20,425 36% Recurring EBIT-Margin 22% 20% 21% 20% 17% EBITDA 8,975 7,893 14% 8,436 6% 32,425 24,749 31% EBITDA-Margin 25% 24% 24% 23% 20% Cash flow from operating activities Adjusted cash flow from operating activities** 7,277 5,821 25% 14,961-51% 17,353 19,667-12% 7,277 5,821 25% 14,961-51% 35,321 19,667 80% * The 2013 recurring EBIT excludes a MUSD 4.9 non-cash goodwill impairment charge related to the MAM cash generating unit, recorded in Q ** Adjusted for MUSD 18.0 taxes on income paid as part of the settlement with the Israeli tax authorities in June Product lines breakdown of revenues In KUSD Q Q Change Q Change Change BG 30,789 29,030 6% 30,530 1% 122, ,766 20% MAM 5,440 4,295 27% 4,663 17% 19,514 20,646-5% Revenues 36,229 33,325 9% 35,193 3% 141, ,412 16% BG and MAM revenues in Q4 2014, accounted for 85% and 15% of total revenues, respectively, as compared to 87% and 13%, respectively, in Q Geographic breakdown of revenues In KUSD Q Q Change Q Change Change EMEA 17,110 13,688 25% 16,726 2% 67,590 51,292 32% AMECS 8,989 10,440-14% 10,294-13% 37,340 38,139-2% APAC 10,130 9,197 10% 8,173 24% 36,604 32,981 11% Revenues 36,229 33,325 9% 35,193 3% 141, ,412 16% Revenues in EMEA, AMECS and APAC, accounted for 47%, 25% and 28% of total revenues in Q4 2014, respectively, as compared to 41%, 31% and 28%, respectively, in Q

5 Operating expenses In KUSD Q Q Change Q Change Change R&D 5,486 5,525-1% 5,692-4% 22,466 19,017 18% S&M 8,543 7,977 7% 8,965-5% 35,255 32,457 9% G&A 3,864 2,956 31% 3,280 18% 13,384 10,859 23% OPEX 17,893 16,458 9% 17,937 71,105 62,333 14% The increase in OPEX for Q4 2014, as compared to Q4 2013, is attributable mainly to the consolidation of Mosart starting from March 11, 2014, as well as to consulting related costs in connection with the expected merger transaction with Nordic Capital. OPEX stayed at a similar level compared to Q Currency effects Exchange rate fluctuations in the USD versus the other main currencies Vizrt deals with (Euro, NOK, SEK, THB, AUD) did not materially affect revenues as compared to the revenues reported for FY Order backlog Order backlog as of February 10, 2015, reached a level of MUSD 50.3, up 8%, compared to MUSD 46.5 at same time LY, and down 1% compared to the Q results release date. BG backlog was at MUSD 35.6 and MAM backlog at MUSD BG backlog was in a similar level as in the same time LY, and MAM backlog was up 37%, compared to the same time LY. Balance sheet, cash flow and liquidity Cash flow generation from operating activities in Q was MUSD 7.3, up 25% compared to MUSD 5.8 in Q Vizrt has a strong financial position with no interest-bearing debt and a net cash position of MUSD 57.9 as of December 31, 2014 (including MUSD 0.2 restricted cash), compared to MUSD 61.1 as of December 31, 2013 (including MUSD 0.2 restricted cash). The Company s cash position increased by MUSD 33.1, as compared to December 31, 2013, adjusted for the ITA cash settlement of MUSD 18.0, the net cash consideration for the Mosart acquisition of MUSD 16.8, the gross dividend pay-out of MUSD 3.6, and the MUSD 2.0 consideration received for the Escenic divestiture. Shareholders equity as of December 31, 2014 was MUSD 97.8, which is equivalent to an equity ratio of 69%. Taxes Taxes on income for FY 2014 amounted to MUSD 10.9, reflecting an effective tax rate of 41%. Adjusted for MUSD 3.4 additional taxes on income related to the settlement reached with the Israeli tax authorities ( ITA ) in Q2 2014, effective tax rate for FY 2014 is 28%, as compared to MUSD 5.9 (29%) adjusted effective tax rate for FY 2013 (adjusted earnings for MUSD 4.9 MAM goodwill impairment and adjusted taxes on income mainly for additional accruals related to the dispute with the ITA). Organization At the end of Q4 2014, the Company had 584 employees compared to 542 at the end of Q employees were added following the Mosart acquisition in Q

6 ANALYST CONFERENCE Management will discuss the results in a conference call at 09:30 a.m. (CET). Call details are as follows: (Norway) (UK) (Germany) A recording of the call will be available at the Company s website: Contacts Martin Burkhalter Tomer Wald SCHWARZ Financial Communication CEO CFO Frank Schwarz mbu@vizrt.com tow@vizrt.com schwarz@schwarzfinancial.com - 6-

7 SHAREHOLDER related Information 20 largest shareholders as of January 31, 2015 Shareholders No. of shares % of shares Country Account DOROTHY HOLDING AB* 10,664, SWE HOME CAPITAL AS 4,828, NOR ODIN NORGE 4,032, NOR NORDEA NORDIC SMALL 3,495, FIN CLEARSTREAM BANKING 2,978, LUX NOM KLP AKSJE NORGE VPF 2,072, NOR VPF NORDEA KAPITAL C/O JPMORGAN EUROPE 1,945, NOR VERDIPAPIRFONDET ALF 1,486, NOR KOMMUNAL LANDSPENSJO 1,471, NOR Morgan Stanley & Co. MS & CO INTL PLC MSI 1,471, GBR NOM VPF NORDEA NORGE VER C/O JPMORGAN EUROPE 1,445, NOR THREAD - EUROPEAN SM C/O CITIBANK NA 1,392, GBR ARCTIC FUNDS PLC BNY MELLON SA/NV 1,304, IRL J.P. Morgan Chase Ba NORDEA TREATY ACCOUN 1,297, GBR NOM JPMORGAN CHASE BANK, S/A ESCROW ACCOUNT 1,282, GBR NOM PICTET & CIE BANQUIE CAT. 15% TAX 1,257, CHE NOM STATE STREET BANK AN A/C CLIENT OMNIBUS F 1,221, USA NOM FID. FUNDS-EUR. SM. 1,001, LUX VERDIPAPIRFONDET DNB 941, NOR VERDIPAPIRFONDET ALF 925, NOR Sum of 20 largest shareholdings 46,517, Total 68,016, * Company controlled by a member of the Board. Directors & Officers 842, Employees 1,096, This press release contains forward-looking statements with respect to the business, financial condition and results of operations of Vizrt and its affiliates. These statements are based on the current expectations or beliefs of Vizrt's management and are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those contemplated in such forward-looking statements. These risks and uncertainties relate to changes in technology and market requirements, the company s concentration on one industry, decline in demand for the company s products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. Vizrt under takes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events - 7-

8 VIZRT LTD. CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except share and per share data) Year ended December 31, Three months ended December 31, Unaudited Audited Unaudited Audited Continuing Operations Revenues $141,534 $122,412 $36,229 $33,325 Cost of revenues 42,695 39,654 10,466 10,226 Gross profit 98,839 82,758 25,763 23,099 Operating expenses: Research and development 22,466 19,017 5,486 5,525 General and administrative 13,384 10,859 3,864 2,956 Selling and marketing 35,255 32,457 8,543 7,977 Impairment of goodwill - 4,918-4,918 Total operating expenses 71,105 67,251 17,893 21,376 Operating income 27,734 15,507 7,870 1,723 Financial expenses, net (898) (430) (624) (228) Income before taxes 26,836 15,077 7,246 1,495 Taxes on income 10,877 9,607 2,745 3,666 Income (loss) before equity in losses of an affiliate company 15,959 5,470 4,501 (2,171) Equity in losses of an affiliated company 409 1,315-1,292 Net income (loss) from continuing operations 15,550 $4,155 $4,501 ($3,463) Discontinued Operations Net loss from discontinued operations Net income (loss) $15,550 $3,575 $4,501 ($3,412) - 8-

9 VIZRT LTD. CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except share and per share data) Year ended December 31, Three months ended December 31, Unaudited Audited Unaudited Audited Basic EPS Basic net income (loss) per share from continuing operations $0.23 $0.06 $0.07 ($0.05) Basic net loss per share from discontinued operations $0.00 ($0.01) $0.00 $0.00 Basic net income (loss) per share $0.23 $0.05 $0.07 ($0.05) Weighted average number of shares used in computing basic net income per share 67,629,129 67,116,043 67,759,697 67,443,475 Diluted EPS Dilutednet income (loss) per share from continuing operations $0.23 $0.06 $0.07 ($0.05) Dilutednet loss per share from discontinued operations $0.00 ($0.01) $0.00 $0.00 Diluted net income (loss) per share $0.23 $0.05 $0.07 ($0.05) Weighted average number of shares used in computing diluted net income per share 68,329,086 68,374,137 68,429,908 68,175,810-9-

10 VIZRT LTD. CONSOLIDATED STATMENTS OF FINANCIAL POSITION U.S. dollars in thousands December 31, December 31, Unaudited Audited ASSETS CURRENT ASSETS: Cash and short-term deposits $57,653 $60,866 Restricted cash Trade receivables, net 28,695 29,824 Other accounts receivable and prepaid expenses 4,785 3,411 Inventories 3,458 4,283 Current assets held for sale - 1,041 TOTAL CURRENT ASSETS 94,805 99,644 NON-CURRENT ASSETS: Deferred taxes 1,742 1,582 Other non-current assets 1, TOTAL NON-CURRENT ASSETS 2,891 2,182 PROPERTY AND EQUIPMENT, NET 4,694 4,556 INTANGIBLE ASSETS, NET 7,743 3,205 GOODWILL 31,581 25,718 TOTAL ASSETS $141,714 $135,

11 VIZRT LTD. CONSOLIDATED STATMENTS OF FINANCIAL POSITION U.S. dollars in thousands LIABILITIES AND SHAREHOLDERS' EQUITY December 31, December 31, Unaudited Audited CURRENT LIABILITIES: Trade payables $5,088 $3,978 Deferred revenues 10,095 9,323 Employees and payroll accruals 8,029 5,166 Tax accruals 3,619 16,211 Other accounts payable and accrued expenses 5,528 4,020 Current liabilities held for sale - 1,015 TOTAL CURRENT LIABILITIES 32,359 39,713 NON-CURRENT LIABILITIES: Deferred Taxes 7,564 2,767 Other non- current liabilities 3,996 1,870 TOTAL NON-CURRENT LIABILITIES 11,560 4,637 SHAREHOLDERS' EQUITY: Share capital Additional paid-in capital 157, ,646 Accumulated other comprehensive loss (8,680) (2,004) Accumulated deficit (50,881) (62,849) TOTAL SHAREHOLDERS' EQUITY 97,795 90,955 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $141,714 $135,

12 VIZRT LTD. CONSOLIDATED STATEMENTS OF CASH FLOW U.S. dollars in thousands Year Ended December 31, Unaudited Audited Net Income $15,550 $3,575 Adjustments required to reconcile net income to net cash provided by operating activities: Stock-based compensation related to options and restricted shares Depreciation and loss from disposal of property and equipment 2,148 2,442 Share of loss of an associate 409 1,315 Amortization of intangible assets 2,609 1,855 Impairment of goodwill and other assets - 4,918 Changes in assets and liabilities: Accounts receivable and other receivables (947) (749) Inventories 673 (1,028) Deferred tax 3,037 (917) Accounts payable and other liabilities (6,126) 8,078 Cash flows from operating activities: 17,353 19,667 Cash flows used in investing activities: (17,078) (4,788) Cash flows used in financing activities: (2,034) (31,875) Effect of exchange rate changes on cash and short term deposits (1,454) (184) Decrease in cash and cash equivalent (3,213) (17,180) Cash and short-term deposits at the beginning of the period 60,866 78,297 Cash and short-term deposits at the end of the period from continuing operations $57,653 $61,117 Cash included in current assets held for sale - $251 Cash and short-term deposits at the end of the period $57,653 $60,