Avigilon reported Q1 2013 revenue of $31.8 million, an increase of 80%, or $14.2 million, compared with revenue of $17.7 million for Q1 2012. Revenue growth continues to be driven by a strong rise in product sales volumes worldwide, reflecting sales of newly launched products, further penetration of new target market regions and greater customer adoption in existing markets. Avigilon experienced strong year-over-year sales growth across all six of the Company's key target geographic regions.
Avigilon announced its financial results for the three months ended March 31, 2013.
First Quarter 2013 Financial Highlights
- Revenue was US$31.8 million (CAD$32.0 million), an increase of 80% over Q1 2012 revenue of $17.7 million.
- Gross margin was 51%, up from 48% a year earlier.
- EBITDA was $5.1 million, a 319% improvement over Q1 2012 EBITDA of $1.2 million.
- Net income was $2.8 million, a 332% increase from net income of $0.6 million in Q1 2012.
“Our strong start to 2013 demonstrates our continued success in capitalizing on the opportunities in front of us and gaining global market share,” said Alexander Fernandes, President and CEO at Avigilon. “We generated high double-digit revenue growth and delivered improved profitability, while increasing our strategic investments in the business.”
Fernandes continued: “The transition from analog to HD surveillance technology is proceeding rapidly. For the first time, our industry will see high-definition surveillance sales outpace analog sales, and we continue to be at the forefront, leading this shift. With that in mind, we will add to our global sales team, continue to expand our product portfolio and invest in marketing to increase brand awareness. We believe these efforts best position Avigilon to maximize revenue growth and long-term profitability.”
Financial Review
Avigilon reported Q1 2013 revenue of $31.8 million, an increase of 80%, or $14.2 million, compared with revenue of $17.7 million for Q1 2012. Revenue growth continues to be driven by a strong rise in product sales volumes worldwide, reflecting sales of newly launched products, further penetration of new target market regions and greater customer adoption in existing markets. Avigilon experienced strong year-over-year sales growth across all six of the Company's key target geographic regions.
Gross margin was $16.2 million in Q1 2013 (51% of revenue), compared with $8.4 million (48% of revenue) in Q1 2012. The year-over-year increase in gross margin reflects a sales mix shift toward more profitable products, as well as the impact of higher purchasing power, greater economies of scale and improved manufacturing efficiencies. Although the gross margin increased year-over-year, with the Company's near-term objective of rapid growth in revenue and market share, management does not expect significant additional gross margin expansion through 2013.
Q1 2013 Selling and marketing expenses were $7.4 million, a $2.8 million, or 62%, increase compared to $4.7 million in selling and marketing expenses in Q1 2012. The increase reflects planned spending to significantly expand Avigilon's global sales team and marketing efforts, which the Company believes will drive future revenue growth. The Company plans to further expand its sales team and continue to strategically invest in marketing in 2013. As a result, sales and marketing expenses could increase as a percentage of revenue in the near-term and start to decline by the end of the year. Over the longer-term, the Company expects selling and marketing expenses as a percentage of revenue to decline.
Research and development (R&D) expenses, net of related income tax credits, were $1.7 million for Q1 2013, a $0.6 million, or 61%, increase compared to $1.1 million in Q1 2012. Gross R&D spend was $2.0 million in Q1 2013, compared to $1.3 million in the prior year. The increase in spending is due to additional new hires, in line with the Company's plan to expand its product development team to further enhance its product offering. Avigilon expects to continue to increase its R&D investment to support new product development, bringing the Company to more typical industry levels for R&D as a percentage of revenue.
General and administrative expenses (G&A) for Q1 2013 were $3.0 million, an increase of $1.1 million, or 57%, from $1.9 million in general and administrative expenses for Q1 2012. The increase was primarily due to additional personnel and their related expenses to support Avigilon's growth and its public company status. The Company expects G&A expenses to increase in support of its continued growth plans. However, Avigilon believes these expenses will increase at a slower rate than the Company's revenue growth.