Viscount Systems, a software company specializing in physical and logical security solutions, today announced its fourth quarter and full year 2015 financial results for the period ending December 31, 2015.
Viscount Systems, a software company specializing in physical and logical security solutions, today announced its fourth quarter and full year 2015 financial results for the period ending December 31, 2015.
“We continue to strengthen our financial progress through meeting cost-reduction targets and improving execution across the business,” said Scott Sieracki, CEO, Viscount Systems. “At the same time, we have invested in making advancements to the Freedom product line, and look to focus on sales opportunities in the government and enterprise markets to realize long-term stable organic growth.”
Fourth quarter and full year 2015 highlights
Sales for the years ended December 31, 2015 and 2014, were $6,137,488 and $4,769,298, respectively, reflecting an increase of $1,368,190 or 29%. The majority of the Company’s revenues were derived from the MESH/Enterphone and Freedom product lines. In 2015, MESH/Enterphone sales represented 38.6% of total revenue, while Freedom product sales represented 44.1% of total revenue. The balance of the Company’s revenue was derived from service agreements and other products such as access tracking and control, closed-circuit video, infrared and radio frequency remotes.
Freedom sales increased by $1,054,390 or 64% from $1,650,645 to $2,705,035 for the years ended December 31, 2014 and 2015, respectively, primarily due to a contract with the United States Government. Enterphone (including MESH) sales for the years ended December 31, 2015 and 2014 of $2,371,798 and $1,981,132, respectively, reflecting an increase of $390,666 or 20%.
Customer service contracts and new equipment sales revenues decreased by $76,866 or 7%, from $1,137,521 to $1,060,655 from the years ended December 31, 2014 to 2015, respectively. The intangible assets held by the Company are comprised primarily of service contracts for the Enterphone 2000 product line. The number of service agreements held by the Company was 1,134 at December 31, 2015, as compared to 1,186 at December 31, 2014. Typical customers include strata management and building owners as well as various residential, business and industrial users of Enterphone access control and security systems.
Gross profit
Gross profit for the years ended December 31, 2015 and 2014 were $3,690,084 and $2,307,921, respectively, reflecting an increase of $1,382,163 or 60%. For the years ended December 31, 2015 and 2014, the cost of sales and services were $2,447,404 and $2,461,377 or 40% and 52% of sales, respectively. Cost of sales includes inventory provision cost. During the year ended December 31, 2015 and 2014, total inventory provision cost accrued was $316,677 and $125,000, respectively.
Gross margin for the years ended December 31, 2015 and 2014 were 60% and 48%, respectively. The higher gross margin in 2015 is mainly due to a U.S. Citizenship and Immigration Services (“USCIS”) sale which occurred in May 2015, totaling $726,000, with lower cost of sales. Also, in 2015, management has continued to focus on controlling the input costs by using multiple suppliers to ensure that the best and most cost effective raw materials are used in all of our products. The cost of labor and travel incurred to generate our service division sales has also been reduced. Increased software sales with zero to minimal cost of sales also increased our gross margin.
The gross margin percentage for the year ended December 31, 2015 of our product categories of Mesh/Enterphone, Freedom, and Service Division were 35%, 79% and 66% respectively. The gross margin percentage for the year ended December 31, 2014 of product categories of MESH, Freedom, Enterphone, and Service Division were 34%, 64%, 14% and 63%, respectively.