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Avigilon acquires ObjectVideo's entire patent portfolio and licensing program

Avigilon acquires ObjectVideo's entire patent portfolio and licensing program

Editor / Provider: Avigilon | Updated: 12/19/2014 | Article type: Security 50

Avigilon Corporation (“Avigilon”), a leading global provider of end-to-end security solutions, announced that it has completed the acquisition of the entire patent portfolio and the patent licensing program of ObjectVideo, (“ObjectVideo”) for cash consideration of US$80.3 million (the “Acquisition”).

Founded in 1998, ObjectVideo is an innovator in the intelligent video solutions market. ObjectVideo's video analytics patents, now acquired by Avigilon, are licensed and deployed by leading IP video manufacturers around the world. Under the Acquisition, Avigilon has acquired all of ObjectVideo's 76 US and international patents and over 50 US and international patent applications. In addition to the foregoing, until January 31, 2015 ObjectVideo will continue to generate additional US patent applications, and has agreed to transfer any and all such applications to Avigilon for no additional consideration.

With the completion of the Acquisition, Avigilon now holds 124 US and international patents, and 202 US and international patent applications.

“The future of the video surveillance industry is in video analytics,” said Alexander Fernandes, founder, president, CEO and chairman of the board, Avigilon. “The Acquisition not only bolsters Avigilon's portfolio of intellectual property, but it also brings with it a recurring royalty revenue stream.”

The patent licensing program provides companies with the opportunity to leverage the innovative features of industry-leading video analytics patents. Nineteen royalty-paying licensees have joined the program, including global corporations such as Sony Corporation, Panasonic System Networks, Bosch Security Systems, Hangzhou Hikvision Digital Technology, Pelco, FLIR Systems, and Sensormatic Electronics, (Tyco), and more.

“The Acquisition opens new doors for Avigilon, provides us with additional freedom to operate, and greatly strengthens our intellectual property portfolio,” said Fernandes. “It positions Avigilon to continue leading the way into the future of the video surveillance industry.”

GMP Securities L.P. acted as the exclusive financial advisor to Avigilon on the Acquisition.

Avigilon expects to file a Business Acquisition Report, as such term is defined in National Instrument 51-102 Continuous Disclosure Obligations, respecting the Acquisition in due course.

Prophecy from Security 50: Time for Integrated Systems!

Prophecy from Security 50: Time for Integrated Systems!

Editor / Provider: Jill Lai, a&s International | Updated: 12/5/2014 | Article type: Hot Topics

Time for Integrated Systems
In the video surveillance product sector of Security 50 rankings, company performance is strongly correlated with its overall product strategy. If we divide the video surveillance companies by their tendency to develop systems versus single devices, the average revenue growth and profit growth of these groups were found to be different. Overall video surveillance companies grew 9.2 percent on average. Companies developing systems grew 14.4 percent, 5.2 percent more than those that only develop devices. In addition, the average profit growth for overall video surveillance is 38.9 percent. System developers grew 14 percent versus negative 2.2 percent in the device part. Gross margin of some companies, from the device part, barely kept single-digital growth.

To stay profitable and competitive in the market, offering devices only is not enough. Successful suppliers provide systems suitable for different types of projects. IP video surveillance systems, for instance, are well designed for solutions in different applications and vertical sectors. Most importantly, they are well tested and configured and ready to be integrated into a management platform, which saves a lot of headache and troubles for systems integrators and installers. On the other hand, for some small to medium-sized companies, the capability to tailor-make certain unique features in systems for different projects are also required.

Developing integrated systems, which are ready to use for different projects, is not only a buzzword but also exactly what is happening right now for the most profitable companies in security. Keen Yao, International Marketing Director of Hikvision Digital Technology pointed out, “Almost all the big suppliers give total solutions. Hikvision, we also are a total solution provider. Our R&D resources make Hikvision very powerful in different vertical markets. We have seven vertical markets — we call them Seven Stars. For different vertical markets we have different solutions that combine almost all security functions, including access control, alarm systems, surveillance systems. So this is Hikvision's strategy.”

Tim Shen, Marketing Director for Overseas Business Center at Dahua Technology continued, adding, “We are also in the transition stage from device to solutions development. Dahua is one of the few companies which are able to develop solutions in China. To develop solutions, it requires not only a complete wide range of product portfolios but also takes higher level of profound know-how to bring them together for a better integration purpose. Dahua has proven to do several large projects in bank, city surveillance, transportation and commercial sector not only in China but also overseas. We are able to transfer our know-how in China to provide suitable products for solutions in overseas market.”

Taiwanese and Korean Companies Prepare for Their Next Leap
From Security 50 reports over the past few years, major Taiwanese and Korean companies continue to be in recession, which has lingered a little bit longer than expected. It is never easy to transform from a device supplier to a systems or solution provider and even harder to change the corporate focus from OEM business to branding. However, the rising of Chinese companies has forced these companies to differentiate themselves. IDIS, a leading video surveillance company in Korea, is one of the most significant ones that have started to promote its own brand business in Europe since two years ago. Even though the outcome for its brand business has not been confirmed yet, the company seems to be headed in the right direction, developing positively in the future.

Some of the traditional, analog-based Taiwanese companies might take a little while to take off; however, the IP/IT-based companies, such as VIVOTEK and GeoVision, have maintained steady growth over the years and are active in the market. We predict that in the near future, there will be more corporate consolidation among Asian companies.

The security market is still full of opportunities. Some small to medium-sized Taiwanese and Korean companies are striving to find their own “blue ocean,” to differentiate themselves from Chinese companies. EverFocus also provided a good example here. The company is ready to demonstrate its capacity to develop an integrated security system to its clients, too. Even though it has gone through obstacles, the company has started to receive some positive outcomes. Jemmy Huang, Chairman & President of EverFocus Electronics also shared, “Now, customer's demand for security products has become much more diverse. They expect the system to integrate with more devices and realize multiple purposes. For example, the customers might have some special requirements for the synergy between video surveillance systems and elevators whenever an emergency happens in the building. ” Therefore, “we've transformed to be a solution provider, our open-platform central management system is well designed to integrate with a wide range of systems and extremely scalable for future expansion. With this system, we can make sure systems integrators have no further problems in product integration to meet customization requirements perfectly and ensure their projects can well be completed.”

Looking to 2014 & 2015
Looking into the financial reports for the first half for 2014, the companies which are more likely to continue growing significantly both in 2013 and 2014 are Avigilon, Dahua, Hikvision, ITX, and Tamron. These five companies were ranked in the top 10 companies with the highest revenue growth. However, out of the 29 companies, who shared their financial figures in the first half of 2014, the average growth rate fell to 2.8 percent. Twelve companies are in recession. Korean and Taiwanese companies have experienced even bigger challenges in the first half of 2014, which can be obviously found in their reports.

Cross referencing profit growth and gross margin of these 29 companies in the first half of 2014, it is also confirmed that the companies that have developed fully integrated systems outperformed the ones which develop only devices, again. When we look into 2014 and 2015, we predict that the trend to develop solutions for verticals/applications will be much more obvious.

 

>>> See the Full Rankings

 

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Prophecy from Security 50 <I>: 
Time for Solutions!

 

 

 

Prophecy from Security 50: Time for Solutions!

Prophecy from Security 50: Time for Solutions!

Editor / Provider: Jill Lai, a&s International | Updated: 12/1/2014 | Article type: Hot Topics

This year's Security 50 rankings again proved the year 2013 was another fruitful year. The top 50 companies grew 8.2 percent on average. Even without very dramatic growth, it symbolizes that 2013 indeed was a turning point for the whole industry: time for solutions!

2013 was another rewarding year for the winners of Security 50. Even though the average growth rate was comparatively moderate compared to the past two years, the top 50 still contributed US$16.9 billion in total sales revenue in 2013. Top 10 companies, Honeywell, Bosch, Hikvision, Safran, ASSA ABLOY, Dahua, FLIR, Axis, Samsung, and Tyco Security Products, remain the same as last year's rankings. However, due to the explosive growth of two Chinese giants, the top 10 rankings have slightly changed. Hikvision has been ranked third, with 2013 being the first time it produced over $1 billion in turnover. Dahua, who had the most obvious growth, beat Axis, Samsung, and FLIR, and has been ranked sixth. These two Chinese companies' outstanding performance again impressed the whole security industry.

Steady Growth From 2012 to 2013
The average turnover growth rate for the Security 50 was 8.2 percent in 2013. The 8.2 percent growth rate also corresponds to current researchers' predictions on the global security market growth — 8 to 10.8 percent in 2013, according to IHS and MarketsandMarkets. The result proves that the top 50 companies grew quite steadily in 2013. However, the figure also shows a slight slowdown, compared to the average 12 percent growth in Security 50 reports, per year, after 2010.

Multinationals among the top 50, which mostly develop multiple security systems, ranging from video surveillance, access control, and alarm, grew exponentially and have become much more profitable compared to our findings in 2012 and 2011. In 2013, they grew 15.6 percent, compared to 9.5 percent in 2012. Their profit growth is 15.7 percent on average, double compared to 7.1 percent in 2012.

The top 10 companies with the fastest growth made a remarkable 44 percent growth on average. ITX led the group and grew 82.8 percent. Avigilon came in second, growing 77.9 percent from 2012 to 2013; followed by Dahua, Hikvision, TKH, Tamron, Tyco, Milestone, Infinova, and VIVOTEK.

In addition, Milestone grew 28 percent, exceeding its annual growth in the past two years. Recently, the VMS company also launched its NVRs, to quickly respond to the current market demand for easy-to-use and -install IP video surveillance systems. In contrast, some IP video surveillance companies, focusing on developing devices and products only, have experienced a year-on-year slowdown since two years ago, predicted by past a&s security 50 reports.

Tamron also had a fruitful year in 2013. The professional security/surveillance lens company has successfully transformed its main focus to OEM business with other Asian manufacturers. The Asian manufacturing industry, especially China, has become the most important hub in the whole world, which plays a crucial role in Tamron's latest success.

Corporate Consolidation Still Continues
The top 10 multinationals, led by Honeywell Security, ranked number one among the Security 50, contributed 74.2 percent of the total revenue of the top 50 companies. Due to the consolidation via frequent corporate merger and acquisitions becoming obvious, major multinationals have dominated most of the global product sales market.

The most significant merger and acquisition in 2013 was Avigilon's acquisition of access control company RedCloud. With this acquisition, Avigilon has been able to reach out their business beyond the video surveillance sector. Right at the end of the same year, Avigilon also acquired video analytics company VideoIQ. With its recent acquisitions, the company successfully became a total solution provider in the security industry. The company continues growing its investment and specialties in verticals such as casinos, energy, education, healthcare, critical infrastructure, and retail, managed by a specific business development team.

Despite corporate consolidation, multinationals also spin off to become more focused and agile. The best known, Allegion, a spin-off from Ingersoll Rand, made its debut in Security 50, ranking eleventh. Allegion continues to explore non-industrial security market sectors, which differs from its mother company Ingersoll Rand.

Decreased Profit Growth, but Good Gross Margin
To maintain valuable profit, margin is an ultimate goal for all the companies. Telling from this year's Security 50 rankings, the average gross margin in 2013 was around 33 percent. The top 50 companies kept consistent growth in gross margin at around 30 percent, per year, in the last four years. Yet, the average profit growth slightly dropped to 5.9 percent, which is also a slowdown from 14.6 percent in 2012 and 9.8 percent in 2011. Companies strive to gain sufficient margin; however, have continually been meet with challenges from the price reduction over standardized products, market competition, and global economic impact.

Among the 28 companies, which generously shared their gross profit figures, Avigilon, DynaColor, and GeoVision, were able to maintain both high profit growth and gross margin. Fourteen companies kept above-average gross margin at 33 percent. We also found that these companies have fully developed integrated systems ranging from IP video surveillance, access control, and smart home, becoming the most profitable companies among the top 50.

IP Video Surveillance Enters Late Growth Stage of Product Cycle
Some major pure IP video surveillance companies have started to experience the slowdown during their growth momentum, based on their financial reports in 2013 and the first half of 2014. Their growth rate over the past two to three years have even reach almost 25 to 30 percent on average. However, their latest growth rate turned moderate. Explosive growth in the IP video surveillance sector is now gone, which symbolizes technology for IP video surveillance is now well-developed and there is fierce competition over multiple suppliers in the market. To maintain growth, Axis and VIVOTEK also start to develop IP video surveillance systems. They recently developed NVRs and management software and systems, which well demonstrated the future for security industry.

 

>>> See the Full Rankings 

 

Related Article:

 

 

 

Prophecy from Security 50 <II>:
Time for Integrated Systems!

 

 

 

OPTEX release free plug-in to integrate with Avigilon VMS platform

OPTEX release free plug-in to integrate with Avigilon VMS platform

Editor / Provider: OPTEX | Updated: 11/28/2014 | Article type: Security 50

OPTEX has now released a free plug-in to integrate REDWALL IP motion detectors, active infrared beams and the intelligent laser sensors, REDSCAN onto an IP security system managed by the ACC Enterprise platform (ACC 5.0.2.24 onwards). When an intruder or object is detected in the critical zones, the sensors will trigger an alarm on the VMS platform so cameras can point in the right direction and track and monitor the event.

The free software plug-in gives a pre-populated choice of sensors: the REDSCAN or the PIE-1 module that is used in the REDWALL IP thermal sensors (SIP-IP), Redbeam (IR Quad beams) and fibre optic fence detection sensors. Once the right sensors have been selected, a list of events ranging from alarm, tamper to trouble and environment can be associated to the options available in the Avigilon software. Rules can be then set up using the rule engine to create an efficient security system.

All sensors will be supervised and notify the system if they are not working as it should, ensuring the intrusion detection system will deliver the best possible performance.

Review on 2013 Security 50

Review on 2013 Security 50

Editor / Provider: Editorial Dept. | Updated: 11/26/2014 | Article type: Hot Topics

Security 50 Ranking, has been delivered by a&s editorial team in Messe Frankfurt New Era for more than a decade, is an iconic industry report in the security industry. The participants range from exclusive manufacturers to end-to-end solution providers. Security 50 Ranking is entirely based on the suppliers' annual product sales, providing our readers an aspect to this dynamic market.

 

 

Before the 2014 Security 50 Ranking being announced on 28th November, let's go over the Ranking in 2013 again!

Highlights of Security 50 2013:
1. The Security 50 companies in 2013 produced about 68% of the total global security equipment market in 2012;
2. An average growth of 12.3% from the Security 50 providers in 2013;
3. The growth rate for emerging markets is robust, but cannot offset steep losses;
4. As IP-related technologies mature and Chinese manufacturers rapidly improve, the global security market has become even more competitive than before.
5. Despite the tough times, several companies focused on specific verticals and produced tailor-made solutions achieved excellent sales in 2012.

 

2013 Top Security 50

'13 '12 Company Headquarters Total Revenue ($US Millions) Revenue Growth
2012 2011 2011-2012
1 1 HONEYWELL SECURITY U.S. $2,500.0 $2,400.0 4.2%
2 2 BOSCH SECURITY SYSTEMS Germany $1,972.2 $1,923.0 2.6%
3 3 SAFRAN
(SECURITY PRODUCTS ONLY)
France $1,610.7 $1,258.5 28.0%
4 5 HIKVISION DIGITAL TECHNOLOGY China $1,110.6 $819.2 35.6%
5 4 ASSA ABLOY
(GLOBAL TECHNOLOGIES)
Sweden $969.1 $890.8 8.8%
6 7 AXIS COMMUNICATIONS Sweden $643.5 $549.5 17.1%
7 6 FLIR SYSTEMS
(Thermal Vision and Measurement)
U.S. $628.0 $660.3 -4.9%
8 8 SAMSUNG TECHWIN Korea $603.6 $576.7 4.7%
9 10 DAHUA TECHNOLOGY China $575.5 $359.4 60.1%
10 9 TYCO SECURITY PRODUCTS U.S. $500.0 $406.0 23.2%
11 11 AIPHONE Japan $374.2 $346.2 8.1%
12 15 TKH GROUP
(SECURITY SYSTEMS ONLY)
Netherlands $234.4 $155.1 51.1%
13 14 NEDAP Netherlands $204.4 $182.0 12.3%
14 12 NICE SYSTEMS
(SECURITY SOLUTIONS ONLY)
Israel $185.9 $191.9 -3.1%
15 19 IDIS Korea $137.1 $131.5 4.2%
16 13 RCG Hong Kong, China $131.8 $178.6 -26.2%
17 35 INFINOVA U.S $123.5 $57.8 113.5%
18 16 VERINT SYSTEMS
(VIDEO INTELLIGENCE)
U.S. $119.5 $138.0 -13.4%
19 22 VIVOTEK Taiwan $116.0 $96.1 20.7%
20 24 MOBOTIX Germany $108.5 $97.3 11.5%
21 N/A HITRON SYSTEMS Korea $105.2 $110.8 -5.1%
22 21 OPTEX
(SENSING PPRODUCTS BUSINESS)
Japan $100.6 $81.9 22.8%
23 32 AVIGILON Canada $97.7 $58.5 67.0%
24 18 TAMRON
(COMMERCIAL & INDUSTRIAL)
Japan $92.9 $83.3 11.6%
25 20 AVTECH Taiwan $88.6 $104.9 -15.6%
26 17 CNB TECHNOLOGY Korea $87.2 $109.5 -20.4%
27 26 COMMAX Korea $79.7 $87.5 -8.9%
28 27 EVERFOCUS ELECTRONICS Taiwan $76.2 $80.0 -4.8%
29 30 KOCOM Korea $75.0 $72.9 2.9%
30 33 SYNECTICS U.K $74.5 $57.9 28.7%
31 29 NAPCO SECURITY SYSTEMS U.S. $70.9 $71.4 -0.6%
32 38 HDPRO Korea $70.3 $54.2 29.8%
33 41 DYNACOLOR Taiwan $70.2 $46.8 50.0%
34 28 GEUTEBRUCK Germany $69.9 $82.5 -15.3%
35 36 GEOVISION Taiwan $67.4 $55.5 21.4%
36 34 SIMONSVOSS TECHNOLOGIES Germany $63.8 $61.6 3.6%
37 43 MILESTONE SYSTEMS Denmark $56.6 $47.4 19.4%
38 39 FERMAX Spain $51.9 $52.5 -1.2%
39 40 VICON U.S $49.7 $47.2 5.2%
40 47 SUPREMA Korea $46.7 $37.5 24.5%
41 42 INDIGOVISION U.K. $46.6 $44.5 4.8%
42 48 DALI TECHNOLOGY China $44.4 $37.6 17.9%
43 44 C-PRO ELECTRONICS Korea $41.1 $39.3 4.5%
44 45 ITX SECURITY Korea $40.6 $38.9 4.6%
45 37 YOKO TECHNOLOGY Taiwan $40.1 $53.0 -24.3%
46 49 WIN4NET Korea $36.2 $31.9 13.5%
47 46 HI SHARP ELECTRONICS Taiwan $34.1 $37.2 -8.3%
48 50 MAGAL SECURITY SYSTEMS
(PERIMETER PRODUCTS)
Israel $33.9 $30.0 13.1%
49 N/A HUNT ELECTRONIC Taiwan $28.7 $27.6 4.0%
50 N/A EVERSPRING INDUSTRY Taiwan $25.4 $22.8 11.2%

Avigilon HD solution oversees ski resort in North America

Avigilon HD solution oversees ski resort in North America

Editor / Provider: Avigilon | Updated: 11/24/2014 | Article type: Commercial Markets

The largest ski and outdoor sports resort in North America required a high-performance HD video surveillance system that can ensure visitor and employee safety, protect company assets and reduce theft in its retail and rental division.

Solution
Security personnel at Whistler Blackcomb manage the Avigilon high-definition security system from their control room using the Avigilon Control Center (ACC) 5 network management software (NVMS) with High Definition Stream Management (HDSM) technology. The resort uses over 100 Avigilon HD Dome and HD Bullet cameras, ranging from 1 MP to 5 MP in both indoor and outdoor settings, to monitor retail and rental stores, inventory locations, public loading areas, financial vaults, employee service areas, and numerous doors and gates. Whistler Blackcomb uses Avigilon video encoders to leverage the resort's 100-plus existing analog cameras. The team also uses ACC Mobile to view live and recorded images remotely and Avigilon Network Video Recorders (NVRs) to store up to 30 days of continuous surveillance footage.

World Renowned Ski Resort Protects Guests, Employees and Company Assets
Located just 125 km north of Vancouver, British Columbia, Whistler Blackcomb is a world class ski resort that accommodates over two million skiers and snowboarders annually. One of the main venues during the 2010 Winter Olympic Games in Vancouver, Whistler Blackcomb is the largest ski resort in North America and home of the world-record breaking “Peak 2 Peak” Gondola. In recent years, the resort had relied on an outdated, largely analog-based video surveillance system to oversee its security initiatives. But with 8,171 acres of skiable terrain along with over 100 buildings and facilities on the property, it was inevitable that Whistler Blackcomb would need to upgrade to a versa tile, high-performance video surveillance solution that can efficiently manage the area. “Our video coverage for viewing was antiquated and not effective,” said Carl Rochon, IT Systems Administrator at Whistler Blackcomb. “The number of buildings, the terrain and the multiple business units that we operate certainly posed a challenge and made it difficult for us as a security department to analyze footage right away.” With the assistance of the Vancouver-based security integrator, BMS Integrated Services, the resort considered several surveillance camera manufacturers before ultimately selecting Avigilon. “We felt that Avigilon offered the complete package of quality cameras at a good price and an excellent interface to maximize the effectiveness of those cameras,” said Rochon. “We are continually impressed with this combination.” Whistler Blackcomb has been so satisfied with the Avigilon system, the resort has plans to install over 600 more cameras and 12 NVRs in the next few years. “We are moving closer to our goal of greater employee safety, external guest safety and the protection of company assets by utilizing surveillance technology with better evidence,” Rochon said. “We are certainly moving in that direction with our Avigilon solution.”

Improved Safety
Given the vast terrain and multiple business units that Whistler Blackcomb is home to, ensuring the safety of guests and employees can be challenging for security officials at the resort. Each separate division within Whistler Blackcomb's umbrella of operations has their own security and safety concerns. “Our Guest Services Division would cite employee and guest safety as their top priority,” Rochon said. “It is from this perspective that we endeavor to leverage practices and technology to minimize these concerns.” HD video surveillance has enabled security officials at Whistler Blackcomb to monitor large outdoor areas with greater efficiency, which has been a key asset in locating lost skiers or assessing any incidents. “As we upgrade our cameras across our mountain operations, the only question I am constantly asked from the various business units is, ‘When can we get that new camera solution installed at our location?'” said Rochon. “It makes a much needed difference for improved safety, security and protection.” Despite the size of Whistler Blackcomb, the Avigilon solution has also proven to be a cost-effective surveillance solution for the resort. “We were always told that Avigilon was too expensive to install for a site like ours,” said Rochon. “We found the opposite to be true.”

Minimize Theft
With over two million annual skiers and snowboarders, as well as 1500 full-time and 3500 seasonal employees, minimizing theft was a challenging task for Whistler Blackcomb. Since deploying the Avigilon HD solution, the security team at Whistler Blackcomb has been able to effectively protect the resort's retail and rental stores, inventory locations, public loading areas, financial vaults, employee service areas, and numerous doors and gates. The resort has also been able to use the high-definition footage to identify and prosecute individuals who commit theft. “With each camera installation, it gives us greater evidence to apprehend the culprits as well as deter those that may be contemplating such actions,” said Rochon. “Our local RCMP (Royal Canadian Mounted Police) detachment doesn't hesitate to request video evidence anymore since we have installed our Avigilon cameras.” Almost immediately after deploying the Avigilon solution in the ski rental shop at the resort, the security team was able to catch two individuals stealing expensive snowboards and equipment. “Because of the clarity of the image captured, we were immediately able to clearly identify our suspects and push that picture out to all our managers in the area,” said Rochon. “The perpetrators tried to flee Whistler quickly and it didn't work for them.” The Avigilon solution also positively impacts the resort's ability to affect the costs associated with vandalism and theft. Once the resort completes its Avigilon camera expansion, Rochon estimates Avigilon's end-to-end solution will help Whistler Blackcomb recover $250,000 worth of product per year. “All in all, we probably have half a million dollars worth of theft or damage to property that shouldn't occur,” said Rochon. “Avigilon will not only help us cut that cost in half, but it will also lower our liability insurance cost.”

Avigilon announces record results in Q3 2014

Avigilon announces record results in Q3 2014

Editor / Provider: Avigilon | Updated: 11/7/2014 | Article type: Security 50

Avigilon Corporation (“Avigilon” or the “Company”), a leading global provider of end-to-end security solutions, today reported financial results for the third quarter ended September 30, 2014. All figures are in Canadian dollars unless otherwise stated.

Third Quarter 2014 Financial Highlights
* Record quarterly revenue, gross margin, net income, Adjusted EBITDA*, Adjusted Earnings* and Fully Diluted Adjusted Earnings Per Share*
* Revenue was $71.0 million, an increase of 39% over Q3 2013 revenue of $51.2 million.
* Gross margin percentage was 57%, up from 53% a year earlier.
* Adjusted EBITDA was $15.7 million, a 27% increase over Q3 2013 Adjusted EBITDA of $12.4 million.
* Net income was $11.6 million, a 35% increase over Q3 2013 net income of $8.6 million.
* Adjusted Earnings were $11.2 million, a 20% increase over Q3 2013 Adjusted Earnings of $9.3 million.
* Fully Diluted Adjusted Earnings Per Share of $0.24, compared with $0.22 in Q3 2013.

“Avigilon delivered another record sales quarter in Q3, underpinned by particularly strong growth in the U.S. and EMEA, as well as robust sales of new products,” said Alexander Fernandes, founder, president, CEO and chairman of the Board of Avigilon. “Ongoing innovation remains a key pillar of our strategy to increase market share. In the third quarter we had several important new product introductions, including the low cost HD Video Appliance series, Avigilon Control Center 5.4, and the HD dome and bullet cameras with adaptive video analytics. Avigilon continues to make substantial investments in the business, with an eye on continued profitability, as we grow toward our goal of $500 million in run-rate revenue by the end of 2016.”

Financial Review
Avigilon reported record Q3 2014 revenue of $71.0 million, an increase of 39%, or $19.8 million, compared to revenue of $51.2 million in Q3 2013. Revenue growth continues to reflect increased product sales worldwide, driven by greater customer adoption in existing markets, further penetration of new target regions and sales of new products. Revenue for Q3 2014 also benefited from foreign exchange gains.

Gross margin was $40.1 million in Q3 2014 (57% of revenue), compared with $27.2 million (53% of revenue) in Q3 2013. The year-over-year increase in gross margin percentage largely reflects the favourable impact of foreign exchange gains as well as the ongoing effects of greater purchasing power, economies of scale, product mix, and improved manufacturing efficiencies. The Company has historically experienced variability in quarter-to-quarter gross margin percentages.

Sales and marketing expenses in Q3 2014 were $14.7 million, an increase of 48% compared to $9.9 million in Q3 2013. The increase reflects planned growth spending to expand the Company's global sales and marketing team, which management believes will drive continued revenue growth. In Q3 2014, sales and marketing expenses represented 21% of revenue, compared with 19% in Q3 2013. As a percentage of revenue, sales and marketing historically fluctuates intra-year.

Research and development (“R&D”) expenses, net of related income tax credits and capitalized development costs, were $3.0 million in Q3 2014, compared to $2.3 million in Q3 2013. Gross R&D spend was $6.5 million in Q3 2014, a $3.3 million increase compared with $3.2 million in Q3 2013. The growth in spending is consistent with the Company's ongoing plan to increase and support its R&D team to further enhance and expand upon its product offerings.

General and administrative (“G&A”) expenses in Q3 2014 were $9.0 million, compared with $3.8 million in Q3 2013. The increase is primarily due to additional personnel and their related expenses, including new headcount in customer support, human resources, finance and legal. G&A expenses in Q3 2014 also include $1.1 million in business acquisition-related and non-recurring legal costs. The Company expects its G&A expenses to increase in the near term as it continues to expand infrastructure to support planned growth, but believes these expenses will increase at a slower rate than revenue in the long term.

Amortization and depreciation in Q3 2014 were $1.8 million, compared with $0.3 million in Q3 2013. The increase is almost entirely due to amortization of technology acquired from RedCloud Security, Inc. and from VideoIQ.

Adjusted EBITDA increased 27% year-over-year to $15.7 million in Q3 2014, compared with $12.4 million in Q3 2013. The year-over-year improvement largely reflects Avigilon's increase in revenue and improved gross margin, as well as the positive impact of foreign exchange gains.

Net income for Q3 2014 increased 35% year-over-year to $11.6 million, compared with $8.6 million in Q3 2013. Net income for Q3 2014 was positively impacted by a foreign exchange gain of $4.1 million and negatively impacted by $1.8 million in acquisition-related and non-recurring legal expenses, including amortization of acquired intangible assets. Earnings Per Share were $0.25 (basic and diluted) for Q3 2014, compared to $0.22 (basic) and $0.21 (diluted) a year earlier.

Adjusted Earnings for Q3 2014 increased 20% year-over-year to $11.2 million, compared with $9.3 million in Q3 2013. Fully Diluted Adjusted Earnings Per Share were $0.24 in Q3 2014, compared with $0.22 in Q3 2013.

Avigilon plans to continue to invest significantly to broaden sales reach, expand its product offerings, accelerate innovation, and strengthen brand awareness, which management believes will contribute to further revenue growth. In the short term, as the necessary investments are incurred in advance of associated revenue, these initiatives are expected to put continued pressure on the Company's Adjusted EBITDA and net income.

As at September 30, 2014, Avigilon had working capital of $219.0 million, including cash and cash equivalents of $167.0 million. The weighted average number of common shares issued and outstanding for the quarter was 46.5 million basic and 47.3 million diluted.

This news release is qualified in its entirety by the Company's condensed consolidated interim financial statements for the three and nine months ended September 30, 2014 and 2013 and the associated Management's Discussion & Analysis respecting the same period, which can be downloaded from the Avigilon website at http://ir.avigilon.com or from the Company's profile on SEDAR at http://www.sedar.com/.

*Non-IFRS Measures
Management uses certain non- International Financial Reporting Standards (“IFRS”) measures that it believes are useful to investors in evaluating the performance and results of the Company. The term “Adjusted EBITDA” refers to earnings before deducting interest expense, taxes, depreciation, amortization, foreign exchange gain or loss, and share-based payments. Management believes that Adjusted EBITDA is a useful measure as it provides an indication of the operational results of the business prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset amortization.

Management also believes that analyzing operating results exclusive of significant non-cash items provides a useful measure of the Company's performance. The term “Adjusted Earnings” and “Adjusted Earnings Per Share” refers to net earnings and earnings per share, respectively, before share-based payments, foreign exchange gain or loss, business acquisition-related costs, non-recurring legal costs and related tax effects. Please refer to the reconciliation table that accompanies the financial statements discussed in this press release and which is included in the Company's Management's Discussion & Analysis for Q3 2014. Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share do not have standardized meanings prescribed by IFRS and are not necessarily comparable to similar measures provided by other companies.

Investors are cautioned that Adjusted EBITDA, Adjusted Earnings and Adjusted Earnings Per Share should not be construed as an alternative to operating income or net income determined in accordance with IFRS as an indicator of the Company's financial performance or as a measure of its liquidity and cash flows.

Avigilon appoints Margaret Herndon to VP of global marketing and communications

Avigilon appoints Margaret Herndon to VP of global marketing and communications

Editor / Provider: Avigilon | Updated: 10/21/2014 | Article type: Security 50

Avigilon has announced the appointment of Margaret Herndon to vice president of global marketing and communications, effective immediately. Ms. Herndon is responsible for leading Avigilon's communications, marketing strategy, and building awareness for its industry-leading security and business intelligence solutions that keep both personnel and assets safe and enable customers to make better business decisions. Based in Dallas, Texas, Ms. Herndon will report directly to Bryan Schmode, Avigilon's chief operating officer.

With over 20 years of experience, Ms. Herndon brings experience in technology marketing, building awareness and demand generation campaigns for IT software and services. Throughout her career, she has worked with global sales and marketing teams to drive brand awareness and support business objectives through creative campaigns, focusing on specific vertical industries.

“Compelling, creative marketing is key to our future growth and success,” said Bryan Schmode, chief operating officer, Avigilon. “I am very pleased to welcome Margaret Herndon to lead our marketing organization. Her entrepreneurial approach is a great fit for Avigilon, and I am confident that her extensive marketing experience – from both start-up and Fortune 50 companies - and proven track record leading global teams will help take our business to the next level.”

Prior to Avigilon, Ms. Herndon spent 10 years at Hewlett Packard (HP), holding senior leadership positions in software, enterprise services and the corporate marketing divisions of the company. In these roles, she led marketing and product marketing teams tasked with creating strategy, messaging and global launch campaigns targeting a C-level audience. Most recently, Ms. Herndon was vice president of global industry marketing at HP, where her team was responsible for creating campaigns and sales enablement programs for CIOs in the public sector, health and life sciences, banking, manufacturing, and transportation industries. Prior to HP, Ms. Herndon was vice president of marketing at TruLogica, a Dallas-based identity management software start-up organization. She is credited with helping create and launch TruLogica's brand, moving it from a small identity management company to being acquired by HP.

 Avigilon launches adaptive video analytics to its HD cameras

Avigilon launches adaptive video analytics to its HD cameras

Editor / Provider: Avigilon | Updated: 9/24/2014 | Article type: Security 50

Avigilon has introduced its new series of HD Dome and HD Bullet cameras with embedded adaptive video analytics to its innovative product portfolio. Avigilon's adaptive video analytics technology combined with its industry-leading high-definition imaging creates a powerful security and business intelligence solution to keep both personnel and assets safe and enables customers to make better business decisions.

HD Dome and HD Bullet Cameras with Adaptive Video Analytics Avigilon's new HD Dome and HD Bullet cameras bring the benefits of Avigilon's adaptive video analytics directly to the device. Powered by Avigilon's 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 any manual calibration, delivering a new level of performance and ease of installation. The HD Dome and HD Bullet cameras also support Avigilon's breakthrough Teach-By-Example technology that not only enables the analytics to learn continuously by watching the scene, but also learns from operators actively using the system. This innovation symbolizes the vision behind Avigilon's acquisition of VideoIQ earlier this year.

“Following our acquisition of VideoIQ Inc. in January 2014, this launch marks another important milestone in the successful integration of our combined technologies, demonstrating our relentless focus on inventing new and better solutions to serve the needs our customers and establishing a higher standard in video surveillance,” said Alexander Fernandes, Avigilon's founder, president, CEO and chairman of the board.

UK Security Market(2-2): Hot and crowded

UK Security Market(2-2): Hot and crowded

Editor / Provider: Jill Lai, a&s International | Updated: 8/27/2014 | Article type: Hot Topics

The UK security market carries some special features; the most notorious is its large number of legacy analog systems. In addition, bearing the consideration over extra cost of re-cabling and labor, complexity of different projects, and requirement toward high quality, UK customers naturally take extra caution in making purchases and adopting new technologies, such as IP. Over the years, the IP adoption speed has picked up dramatically for a country with high resistance to IP; however, it is still comparatively slower than the US, Middle Eastern, and Scandinavian regions. According to different vendors' comments, the ratio of analog to IP installation in the U.K. is around 50-to-50 or 40-to-60. Steve Carney, Director of Video Product Line Management at Tyco Security Products, dissected the IP growth momentum and said, “The price of IP security products has become more challenging over the past 12 months. It pushes the higher-end IP market to generate more values, such as embracing more intelligent video and mobility in security systems. It also helps stimulate the traditional, cost-driven, analog market (such as the U.K.) to adopt more IP.“

Fully Supports Different Technologies
In a country with widespread legacy systems, companies in the U.K. pay extra attention to developing different technologies, such as encoders/ switchers or hybrid systems to fulfill the requirements for fusing analog and IP systems together. Gerard Otterspeer, Regional Marketing Manager of Video Systems for EMEA at Bosch Security Systems, suggested, “The U.K. has a large base of legacy systems. So, there is always a need to make sure if your systems are able to integrate with legacy systems. We feel that the UK market is going IP quite fast; roughly, 60 percent of our projects here use IP. When providing the IP products here, we also have to ensure they connect with other analog systems too.” In addition, “It is very important to have full product portfolios to support the large legacy market. We do have a wide range of products, such as encoders, and also HD hybrid cameras supporting IP and analog,” he highlighted.

This was also echoed by Axis. Andres Vigren, Product Manager for Axis Communications said, “The U.K. has a history of analog. We are coming from IT. It is very important to have a complete portfolio also including encoders and media converters, to make sure that customers can easily upgrade from analog to IP. Media converters are easy to deploy which you can still keep your coaxial cables.”

Looking to another group of companies, they bring a different statement in appropriate solutions to this market by highlighting the major benefits of using hybrid systems. Carney said, “We have heavily invested in the migration solutions, particularly hybrid solutions that employ a mix of analog and IP technology. I think the encoder market has disappointed some people in some aspects since it costs more for hardware and software for further upgrade. Some people expect encoders could be the transition point, but I would say the transition actually begins with hybrid NVRs and DVRs.” He further explained, “Tyco's American Dynamics and Exacq hybrid NVRs have IP and analog inputs. So, just because in the future the customer fully upgrades to IP, the processing power remains the same whether the device is handling analog or IP video."

March Networks also focused on hybrid NVRs, Stefano Torri, European Sales Director at March Networks said, “Inside the hybrid NVR is a box of encoders, so you can connect it with IP cameras and of course support analog. It is one well set-up alliance, embedded with video management software and added in video analytics. We develop our own video analytics, which we called ‘business intelligence.' We provide a very strong video analytics and value-added software for transaction integration with POS and ATM systems, particularly for big commercial, retail, and banking sector.”

End-to-End Solutions to cater to SIs
Due to the aforementioned considerations of UK customers and extra cost over installation, companies usually have to cater to what systems integrators really need and also bring more added values. Therefore, the total cost of ownership (TCO), return on investment (ROI), and ease of installation are most often evaluated when selecting products and designing systems.

The number of companies who provide end-to-end solutions rise in the market to further ensure systems have seamless compatibility and interoperability. Andrew Myung, Director of Strategy & Planning Team for Global Business Division at IDIS emphasized, “To optimize the values of total video surveillance solutions, education to customers is very important. The obvious example is especially when the retail customers have chain stores around the country; it carries extra time and cost to upgrade their systems within all their branches. Therefore, what we propose is the simplicity of IP systems with the idea of ‘plug-and-play,' which is very similar to the old, analog systems. Since what we provide is a very wide, end-to-end product line, the hefty increase of installation and maintenance time, labor and difficulties can largely be alleviated.” In the U.K., brand awareness and quality are important. What is worth noticing is IDIS, well-known in the OEM business for a long while, spent a very short timeframe preparation to complete its full IP video product lines and market its own brands in the U.K. and other European regions. This year, it has already launched 4K cameras, NVRs, and also monitors.

Full Video & Access Control
Integration to Simplify Work for SIs Solution providers are also working on developing integrated systems. Avigilon, another end-to-end solutions provider, this year, further demonstrated its integrated access control platform, which is able to manage an alarm from access control and video in one single platform. “Our most recent version of access control software includes the introduction of an appliance, which is an ideal solution for up to 32 readers, to address the physical security needs of small to mediumsized sites. It simplifies security with a cost-effective, all-in-one appliance,” said Ian Povey, Director of Product Marketing and Product Management for Avigilon, in a press release.

Carney continued, “Tyco also invested very heavily in integration of our video and access control systems. Both of our video and access control now are able to be integrated into one single platform, which we see as being a requirement for the middle to high-end market. These integrated solutions can better manage the work flow and cost, and provide better service.”

Since the UK market is quite crowded, companies are looking for more added values to differentiate their security systems. Meanwhile, end users no longer want standalone products but integrated solutions from a single company. Andrew Dicken, GM of System Solutions Group of Panasonic System Communications Company Europe said, “The market trend we have seen over the past five years across the EU, not just the UK, is a move toward integrated systems. Panasonic's System Solutions Group has engineering teams working globally on projects that integrate numerous products with proprietary or third party software and total security technologies.”

On the manufacturers' side, forming partnerships over technologies or strategic alliances is a common approach to develop integrated solutions. Panasonic's entrance into the European access control market is a very obvious example. To become a total solution provider, Panasonic Europe expanded its access control product line by forming a strategic alliance with Bravida Fire & Security, a leading access control and intruder alarm company based in Scandinavia. Dicken commented, “Through this strategic alliance, Bravida is able to use Panasonic's video surveillance and fire platform, and Panasonic uses Bravida's access control and intruder platform. Two companies are forming an alliance, a synergy of two major brands in Europe. We are designing products together and also are integration partners. Besides, we are able to share the market intelligence as well as engineering and sales resources.”

Third-party Partnership Calls for Open Platform
To cater to what systems integrators and end users need, some companies work on third-party integration and partnerships. Peter Ainsworth, Head of Product & Marketing at Samsung Techwin Europe said, “What we are highlighting this year is the processing power of our latest DSP chipset that is incorporated into our latest generation of video surveillance cameras is such that we can offer customers complete freedom and flexibility to choose the edge based video analytics App, which best matches their individual requirements. The DSP chipset has the ability to run multiple applications simultaneously and so, in addition to utilizing video analytics for security or business intelligence purposes, customers have the option to run a wide range of other types of Apps such as, for example, cloud storage.”

Another example is PSIM, which benefits most large enterprises, is able to integrate more non-traditional security sensors into the solution to get more operational benefits and save money to increase ROI, according to Jamie Wilson, Marketing Manager of Security of EMEA at NICE Systems. One case is PSIM collocates with VMS in building management systems to control lights, ventilation systems, and lift management. The integration enables the data from other systems to come in PSIM.

Constructing Security ecosystems
Telling from the latest development in the UK security market, it won't work if companies just follow the traditional way to do security business. Even manufacturers need to leverage the strength from other manufacturers to create new business and markets, not to mention other channel players. We can expect in the future for many security ecosystems to be built up. Again, companies working hard in the U.K. provide valuable examples for other markets, too.

Related Article:
UK Security Market(2-1): Hot and crowded

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