Avigilon Corporation announced its financial results for the three and six months ended June 30, 2012.
Second Quarter 2012 Highlights
- Revenue was $24.6 million, an increase of 52% over Q2 2011 revenue of $16.1 million.
- Gross margin was 48%, compared to 42% a year earlier.
- EBITDA was $2.1 million, compared to Q2 2011 EBITDA of $2.1 million. (See “Non-IFRS Measures” below.)
- Net income was $1.3 million, an increase of 22% from $1.1 million in Q2 2011.
First Half 2012 Highlights
- Revenue was $42.4 million in the first six months of 2012, an increase of 61% from $26.2 million in the same period last year.
- Gross margin was 48%, up from 43% in the prior year.
- EBITDA was $3.3 million, an increase of 23% over $2.7 million in the first half of 2011. (See “Non-IFRS Measures” below.)
- Net income was $2.0 million, a 63% increase compared to $1.2 million a year earlier.
“Effective execution of our growth strategy has led to record revenues in the second quarter," said Alexander Fernandes, president and CEO at Avigilon. "We have been expanding our global sales team, building awareness of our brand, and investing in product innovation. I expect all these activities to continue to drive strong growth.”
Financial Review
Avigilon reported revenue of $24.6 million in the three months ended June 30, 2012, an increase of $8.5 million, or 52%, compared to $16.1 million of revenue in the second quarter of 2011. Revenue growth was broadly based, with five of the six regions growing by at least 47% year-over-year, and no single sale representing more than 5% of revenue. In comparison, a one-time enterprise sale of $2.3 million was completed in Q2 2011, representing 14% of revenue. Factoring out that enterprise sale, revenue in the current quarter grew 80% over the previous year.
Gross margin was $11.8 million in the second quarter, an increase of $5.0 million or 74% from $6.7 million the previous year. As a percentage of revenue, gross margin was 48% in Q2 2012 compared to 42% a year earlier. The increased gross margin percentage has resulted primarily from a shift in sales mix. In particular, the large enterprise sale in the second quarter of last year, referenced above, had a product mix that resulted in low gross margins.
Selling and marketing expenses were $6.6 million in the second quarter of 2012, a $3.7 million increase from $2.9 million a year earlier. The increase was primarily due to a higher number of sales personnel, as we continue to grow our global sales team to support revenue growth, and activities associated with the Company's recently expanded marketing program designed to promote the Avigilon brand.
Research and development expenses, net of related income tax credits, were $1.2 million in Q2 2012, a $0.5 million increase compared to $0.7 million in the prior year's second quarter. The Company has increased its investment in R&D as it focuses on continuing to expand and enhance its product offering.
General and administrative expenses were $2.1 million in the second quarter, up $0.9 million from $1.2 million of G&A expense in Q2 2011. The increase was primarily due to additional personnel and their related expenses to support Avigilon's growth and its status as a public company. EBITDA was $2.1 million in the second quarter, an increase of $19,000 or 1% from a year earlier. The increases in revenue and gross margin were largely offset by planned spending on further growth, investments that typically drive results in future periods.
Net income was $1.3 million in Q2 2012, an increase of $0.2 million or 22% compared to net income of $1.1 million in the second quarter of 2011. Earnings per share were $0.04 (basic and diluted), compared to $0.06 (basic) and $0.04 (diluted) a year earlier. Avigilon's basic share count at June 30, 2012 was 31,451,287.