|By Marketwired .||
|April 29, 2014 04:00 PM EDT||
MONTREAL, QUEBEC -- (Marketwired) -- 04/29/14 -- SENSIO Technologies Inc. ("SENSIO" or "the Company") (TSX VENTURE: SIO) presented today its third quarter financial results for 2013-2014. After three quarters, the Company's revenues had climbed to $596K from $316K in the same period last year. Third quarter revenues were reported at $156K, up $43K or 38% compared to the same quarter last year.
For the third quarter, operational expenses amounted to $665K, a decrease of $433K or 39.4% versus the same period last year. This is the direct result of the cost-cutting program implemented by SENSIO. During the three-month period, the Company recognized an impairment of $340K of advances on royalties that had previously been paid to studios as part of 3DGO! operations. This non-monetary expense was recognized to reflect the unrecoverable portion of advance royalty payments based on the Company's assessment. That depreciation included, losses for the quarter amounted to $896K, a drop of $85K compared to last year's quarter. When we exclude the impairment expense, the loss amounted to $555K.
"As demonstrated by our results, the third quarter has been a turning point for SENSIO, said Nicholas Routhier, President and Chief Executive Officer. "The continuous growth of the number of 3DGO! users and rental revenue is encouraging, and the upcoming deployment on Panasonic 3DTVs in the United States will add a significant pool of potential new users in the near future. In parallel, our cost-cutting program has allowed us to significantly reduce our costs, and this has had a tangible impact during the first quarter. Moreover, our renegotiation efforts with studios regarding content distribution rights have already been fruitful, with the renewal of our deal with Disney, securing access to quality 3D movies for our service, under terms that better reflect our anticipated level of activity. Finally, the recent exercise of warrants combined to those confirmed and in process have added an additional 1,515,600$ to the cash position of the company, further solidifying our balance sheet. By taking into account the progression of 3DGO!, our patent licensing activities, our cost reduction efforts and the impact of our renegotiations with studios, we can say that we are getting closer to our objective of reaching a break-even point in regard to our treasury during the next financial year."
Highlights of the third quarter ended February 28, 2014
-- Revenues of $156,039 in the third quarter and $596,049 in the nine-month period compared to $112,792 in the third quarter and $316,089 in the comparative nine- month period; -- 3DGO! revenues amounted to $37,938 up of 108.1% compared to previous quarter; -- Decrease in operating expenses, excluding the cost of sales, of 39.4% compared to the same quarter last year and of 20.4% over the nine-month period; -- Issuance of a Japanese patent related to frame rate conversion for 3DTVs.
Home consumer market
In the third quarter of fiscal 2014, licence revenues of the Company remained stable at $118,101 compared to $112,792 for the quarter ended February 28, 2013 an increase of $5,309. Royalty revenues received during the quarter from licensing continued to progress but this increase was offset by a decrease in revenues generated by the embedment of technologies in products. These ad-hoc revenues are subject to fluctuations from quarter to quarter.
"We anticipate a gradual reduction of the sales of Vizio 3DTVs over the course of the next year, following their decision not to produce any new models, which will have a negative impact on our licensing fee revenues", has commented Mr. Routhier. "We are focusing on the adoption of 3DGO! by more manufacturers, which will allow us to stimulate the adoption of our SENSIO Hi-Fi 3D technology and the payment of licensing fees related to the decoding of content in SENSIO Hi-Fi 3D. The Panasonic deployment represents a first step in that direction, and over the course of the next quarters, we aim to add more manufacturers in order to stimulate the growth of licensing revenues. We are therefore positive in regard to the progression of technology revenues in the future."
Content rental: continue growth in number of users and rentals
In the third quarter, revenues from movie rentals amounted to $37,938, an important rise when compared to the previous two quarters of activity of the service ($18,228 in the second quarter and $8,469 in the first quarter). In the same period, the number of 3DGO! users climbed from 8,019 to 16,191, an increase of 102%. At third quarter end, there were 6,425 active users, up from 2,693 at the end of last quarter. In the third quarter, active users rented 6,583 paid titles, compared to 2,877 in the previous quarter.
"The performance of 3DGO! over the course of the last quarter is extremely encouraging and we are delighted of the progression of the number of users every week," has declared Mr. Routhier. "Over the past few months, we have refined our marketing approach and our understanding of the needs and consumption habits of our users, which has been reflected in the activity rate of current users. We are still on target to launch with Panasonic during the current quarter, and thanks to our acquired experience with the Vizio launch, we are confident to be able to significantly increase the number of users of our service. Over the next quarters, our efforts will be concentrated on increasing our base of potential users by adding new manufacturers, and potentially expanding to new territories. We are very optimistic regarding the future progression of this important commercial activity."
Summary of Financial Results
In the third quarter of fiscal 2014, the Corporation posted revenues of $156,039 compared to $112,792 for the quarter ended February 28, 2013, an increase of $43,247 or 38.3%. The growth in 2014 revenue is mainly explainable by an increase of $37,783 in royalty revenues received during the quarter reduced by a decrease of $ 32,710 in revenues generated by the embedment of technologies in products. The launch of the 3DGO! video-on-demand platform contributed to $37,938 during the quarter ($0 in the comparative quarter).
For the three months period ending February 28, 2014, the cost of sales amounted to $372,455 in comparison to $2,052 for the compared quarter one year ago. This increase of $370,403 is mainly attributable to the impairment of advance royalty payments of $340,169 incurred and paid previously to studios for operations related to 3DGO!. This non-monetary expense is recognized to reflect the advance on royalties that won't be recoverable according to the Corporation estimation. These disbursements done in the past quarters gave credibility to the 3DGO! platform and ultimately allowed the Corporation to sign agreements with Vizio and Panasonic. The management is confident that other manufacturers will follow in the coming quarters.
If we exclude the cost of sales from the operating expenses for the quarter, the operating expenses were reduced by $432,672 or 39.4% when compared to corresponding quarter of the previous year. The selling expenses totalled $378,737 compared to $552,706 in the corresponding quarter the previous year, a decrease of $173,969 or 31.5%. Lower payroll, fees paid to consultants, traveling fees and expenses for trade shows offset by higher costs for the launch of 3DGO! in the three-month period explains the variance.
The Company's research and development expenses amounted to $60,807 compared to $147,049 in the third quarter of the previous year, a decrease of $86,242 or 58.6%. The decrease is explainable by a lower payroll and by a higher R&D tax credit received compared to what was provisioned for last financial year.
Finally, administrative expenses for the quarter ended February 28, 2014 amounted to $225,801 compared to $398,262 for the third quarter of the previous year, a decrease of $172,461 or 43.3%. This decrease is mainly explainable by a reduction in salaries, professional fees and of the depreciation assets expense.
SENSIO's net loss for the quarter ended February 28, 2014, amounted to $895,874 or $0.01 per share compared to $980,761 or $0.02 per share as at February 28, 2013, which represents a decrease of $84,887 or 8.7%.
Selected Financial information
------------------------------------------------------ Fiscal year 2014 --------------------------------------- Q3 Q2 Q1 ------------------------------------------------------ Revenues 156,039 129,522 310,479 Net loss (895,874) (1,163,646) (729,917) Basic and diluted loss per share (0.01) (0.02) (0.01) Basic and diluted weighted average number of shares 89,719,342 76,971,787 63,019,342 ------------------------------------------------------ ---------------------------------------------------------------------------- Fiscal year Fiscal year 2013 2012 ------------------------------------------------------------- Q4 Q3 Q2 Q1 Q4 ---------------------------------------------------------------------------- Revenues 76,267 112,792 92,433 110,864 90,651 Net loss (976,170) (980,761) (1,010,819) (895,248) (1,322,159) Basic and diluted loss per share (0.02) (0.02) (0.02) (0.02) (0.03) Basic and diluted weighted average number of shares 63,019,342 63,019,342 60,696,110 52,512,544 52,487,797 ----------------------------------------------------------------------------
For more details, please see the Management Discussion and Analysis and the Financial Statements for the reference period on the SENSIO Website: www.sensio.tv.
About SENSIO Technologies Inc. (SENSIO):
Founded in 1999, SENSIO Technologies Inc. (www.sensio.tv) is a pioneer in the 3D industry. Its vision, expertise and state-of-the-art solutions, based on diversified stereoscopic image-processing technologies, have been trusted by some of the biggest names in the broadcasting and consumer electronics sectors, as well as for live 3D events in cinemas, to power numerous industry firsts, initiate new business models and generate immediate revenue with a distinctive 3D offering.
SENSIO enables its clients to deliver the best possible 3D experience for the end-user through a broad portfolio of licensed products, based on quality, content, usability and compatibility. These include its flagship, award-winning technology, SENSIO® Hi-Fi 3D, the premium-quality frame-compatible format.
SENSIO's technologies are the object of patents and intellectual property protection proceedings worldwide. SENSIO is listed on the Toronto TSX Venture Exchange (SIO).
Caution Concerning Forward-Looking Statements
Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management's discussion and analysis of SENSIO for the quarter ended February 28, 2014. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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Chief Financial Officer
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