Haivision Announces Results for the Three Months and Full Year Ended October 31, 2024
MONTREAL, Jan. 15, 2025 /PRNewswire/ - Haivision Systems Inc. ("Haivision" or the "Company") (TSX: HAI), a leading global provider of mission critical, real-time video networking and visual collaboration solutions, today announced its results for the fourth quarter and full year ended October 31, 2024.
We are very happy about our 2024 performance and the completion of our 2-year plan to significantly increase our EBITDA performance," said Mirko Wicha, President and CEO of Haivision. "With the impact of the US Navy contract and preparing for some exciting new product introductions throughout fiscal 2025, we expect to revert back to our historical revenue growth of 15+% in 2026." added Mr. Wicha.
Fiscal 2024 Financial Results
-- Revenue of $129.6 million, down $10.3 million from the prior fiscal
year, partially the result of delays in the U.S. federal budget
approvals and resulting changes in buying behavior, but also reflects
our transformation from the system integrator to manufacturer in the
control room market, our departure from the house of worship business,
and our success in long-term rentals.
-- Gross Margins* were 73.1%, a notable improvement from 70.5% for the
prior fiscal year.
-- Total expenses were $89.2 million, a decrease of $8.2 million from prior
fiscal year.
-- Operating profit was $5.5 million, a $4.3 million or 346% improvement
from the prior fiscal year.
-- Adjusted EBITDA* was $17.3 million, a $2.6 million or 17% improvement
from the prior fiscal year.
-- Adjusted EBITDA Margins* was 13.4%, a significant improvement when
compared to 10.6% for the same prior year period.
-- Net income was $4.7 million, a $6.0 million or 371% improvement from
prior fiscal year.
Q4 2024 Financial Results
-- Revenue of $30.1 million, down $5.6 million from the prior year
comparative period, partially the result of delays in the U.S. budget
approval, but also reflects our transformation from the system
integrator to manufacturer in the control room market.
-- Gross Margins* were 73.0%, compared to 74.4% for the same prior year
period.
-- Total expenses were $21.8 million, a decrease of $1.2 million, from the
same prior year period.
-- Operating profit was $0.2 million, compared to 3.6 million from the same
prior year period.
-- Adjusted EBITDA* was $2.9 million, compared to $5.7 million from the
prior year period.
-- Adjusted EBITDA Margins* was 9.8%, compared to 15.9% for the same prior
year period.
-- Net income was $2.1 million, compared to $2.5 million for the same prior
year period.
Recent Company Highlights
-- Awarded the IBC Innovation Award for its live video contribution
solution over private 5G networks at the summer games in Paris.
-- Haivision joins consortium with Airbus Defense and Space to develop new
technologies for rapid, secure, and reliable communications.
-- Haivision MCS awarded US$61.2 million (CAD$82 million) production
agreement by U.S. Navy for next-generation combat visualization and
video distribution systems.
-- Haivision collaborates with Shield AI to bring together full-motion
video with AI object detection for defense and ISR applications.
-- France Television provides exclusive coverage of the Paris 2024 Olympic
surfing competition with Haivision's private 5G video transmission
ecosystem.
-- Celebrated its 20-years anniversary as a leader and innovator in mission
critical live video.
-- Unveiled Hub 360, a cloud-based master control solution that streamlines
live production workflows.
-- Published its fifth annual Broadcast Transformation Report, highlighting
the state of technology adoption in the broadcast industry.
-- Awarded "Single/Dual-Stream Encoding Hardware" and "Best On-Prem
Encoding/ Transcoding Solution" for the Makito X4 by Streaming Media
Readers' Choice Awards.
-- Joined the Panasonic Partner Alliance for live video production
workflows with Kairos; joined the Sony Cloud Production Platform for low
latency live video in the cloud; and partnered with Grabyo, a
London-based live cloud production platform, enabling integrated
solution for live multi-camera productions.
"We didn't see the typical 'bounce' in fourth quarter revenue that we typically see from the U.S. Government year-end spending. There seems to be significant changes in the buying behavior of the Department of Defense and the U.S. Government which is likely related to to the U.S. Congress' need for continuing resolutions. Said Dan Rabinowitz, Chief Financial Officer and EVP, Operations. Fortunately, our restructuring efforts have resulted in a cost structure that can 'weather' these changing buying behaviors. Despite the changing nature of our product offering and delays in typical government purchases, Haivision's Adjusted EBITDA in FY2024 grew by over 17%."
Financial Results
Revenue for the three months and full-year ended October 31, 2024 was $30.1 million and $129.5 million, respectively modest decrease when compared to the prior year comparative periods. Revenues were impacted by delays in the approval of a U.S. Federal spending bill which, in turn, delayed certain procurement process; our transition away from the integrator model in the control room space, which historically offered lower-margined, third-party components; the long-term rental program which offers a recurring revenue model and enhanced margins in our transmitter business; and the departure from the house of worship market in fiscal 2023, all of which may make direct comparisons of year-over-year performance more difficult.
Gross Margin* for the three months and full year ended October 31, 2024 was 73.0% and 73.1%, respectively compared to 74.4% and 70.5% for the prior year comparable periods. Gross Margin* were positively impacted by our decision to exit the managed services business; transitioning away from the integrator model in the control room market, decreases in the incremental costs of components procured during the worldwide component shortage, and general supply chain improvements - particularly related to Aviwest and Haivision MCS.
Total expenses for the three months and full year ended October 31, 2024 were $21.8 million and $89.2 million, respectively representing decrease of $1.2 million and $8.2 million when compared to from the prior year comparative periods, largely the result of recently completed restructuring efforts.
The result of these Gross Margin* improvements and lower total expenses was operating profits for the three months and full year ended October 31,(, )2024 of $0.2 million and $5.5 million, respectively. Whereas operating profit for the three months ended October 31, 2024 decreased $3.4 million from the prior year comparative period, for fiscal 2024, operating profit was $5,5 million representing an improvement of $4.3 million (or 345%) when compared to fiscal 2023. Adjusted EBITDA* for the three months ended October 31, 2024 was $2.9 million a decrease of $2.8 million from the prior year comparative period. However, Adjusted EBITDA* for fiscal 2024 was $17.3 million an increase of $2.6 million (or 17%) from prior fiscal year. Adjusted EBITDA Margins* for the three months ended October 31, 2024, was 9.8% compared to 15.9% in the prior year comparative period. Adjusted EBITDA Margins* for fiscal 2024, was 13.4% compared to 10.6% for fiscal 2023.
Net income for the three months ended October 31, 2024, was $2.1 million, a modest $9,5 million decrease from the prior year comparative period, but net income for the full fiscal year was $4.7 million an increase of $6.0 million from the prior year loss of $1.3 million.
*Measures followed by the suffix "*" in this press release are non-IFRS measures. For the relevant definition, see "Non-IFRS Measures" below. As applicable, a reconciliation of this non-IFRS measure to the most directly comparable IFRS financial measure is included in the tables at the end of this press release and in the Company's management's discussion and analysis for the three months and full year ended October 31, 2024.
Conference Call Notification
Haivision will hold a conference call to discuss its fourth quarter and full year financial results on Wednesday, January 15, 2025 at 5:15 pm (ET). To register for the call, please use this link https://registrations.events/direct/Q4I334142. After registering, a confirmation will be sent through email, including dial in details and unique conference call codes for entry.
Financial Statements, Management's Discussion and Analysis and Additional Information
Haivision's consolidated financial statements for the full year ended October 31, 2024 (the "2024 Financial Statements"), the management's discussion and analysis thereon and additional information relating to Haivision and its business can be found under Haivision's profile on SEDAR+ at www.sedarplus.ca. The financial information presented in this release was derived from the 2024 Financial Statements.
Forward-Looking Statements
This release includes "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable securities laws, including, without limitation, statements regarding the Company's growth opportunities and its ability to execute on its growth strategy. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management's current beliefs, expectations, estimates and projections regarding future events and operating performance.
Forward-looking statements are necessarily based on opinions, assumptions and estimates that, while considered reasonable by Haivision as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the risk factors identified under "Risk Factors" in the Company's latest annual information form, and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company's SEDAR+ profile at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect Haivision. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. Haivision undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.
Non-IFRS Measures
Haivision's consolidated financial statements for the fourth quarter and full year ended October 31, 2024 are prepared in accordance with International Financial Reporting Standards ("IFRS"). As a compliment to results provided in accordance with IFRS, this press release makes reference to certain (i) non-IFRS financial measures, including "EBITDA", and "Adjusted EBITDA", (ii) non-IFRS ratios including "Adjusted EBITDA Margin", and (iii) supplementary financial measures including "Gross Margins" (collectively "non-IFRS measures"). These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation or as a substitute for analysis of our financial information reported under IFRS. Rather, these non-IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. For information on the most directly comparable financial measure disclosed in the primary financial statements of Haivision, composition of the non-IFRS measures, a description of how Haivision uses these measures and an explanation of how these measures provide useful information to investors, refer to the "Non-IFRS Measures" section of the Company's management's discussion and analysis for the three months and full year ended October 31, 2024, dated January 15, 2025, available on the Company's SEDAR+ profile at www.sedarplus.ca, which is incorporated by reference into this press release. As applicable, the reconciliations for each non-IFRS measure are outlined below. Non-IFRS measures should not be considered as alternatives to net income or comparable metrics determined in accordance with IFRS as indicators of the Company's performance, liquidity, cash flow and profitability.
About Haivision
Haivision is a leading global provider of mission-critical, real-time video streaming and visual collaboration solutions. Our connected cloud and intelligent edge technologies enable organizations globally to engage audiences, enhance collaboration, and support decision making. We provide high quality, low latency, secure, and reliable live video at a global scale. Haivision open sourced its award-winning SRT low latency video streaming protocol and founded the SRT Alliance to support its adoption. Awarded four Emmys® for Technology and Engineering from the National Academy of Television Arts and Sciences, Haivision continues to fuel the future of IP video transformation. Founded in 2004, Haivision is headquartered in Montreal and Chicago with offices, sales, and support located throughout the Americas, Europe, and Asia. Learn more at haivision.com.
Thousands of Canadian dollars (except per share amounts)
Three months ended Full year ended
October 31, October 31,
2024 2023 2024 2023
($) ($) ($) ($)
Revenue 30,144 35,724 129,537 139,857
Cost of sales 8,142 9,139 34,851 41,272
Gross profit 22,002 26,585 94,686 98,585
Expenses
Sales and marketing 6,955 6,978 27,332 30,318
Operations and support 3,982 4,184 15,886 15,593
Research and development 6,782 6,292 27,521 28,834
General and administrative 3,389 4,867 16,177 18,902
Share-based payment 663 617 2,290 2,162
Restructuring costs 1,546
21,771 22,938 89,205 97,355
Operating Profit (loss) 231 3,647 5,481 1,230
Financial expenses 202 401 951 1,738
Income (loss) before income taxes 29 3,246 4,530 (508)
Income taxes (recovery)
Current (1,593) 1,755 2,845 1,512
Deferred (433) (1,038) (3,013) (754)
(2,026) 717 (168) 757
Net income (loss) 2,055 2,529 4,699 (1,265)
Other comprehensive income (loss)
Foreign currency translation adjustment 1,036 3,251 811 3,248
Comprehensive income (loss) 3.091 5,780 5,510 1,983
Net income (loss) per share:
Basic $0.07 $0.09 $0.16 $(0.04)
Diluted $0.07 $0.08 $0.16 $(0.04)
Weighted average number of shares outstanding
Basic 28,595,978 29,004,453 28,954,290 28,974,325
Diluted 29,715,509 30,099,686 30,017,186 28,974,325
Thousands of Canadian dollars
As at
October 31, October
31,
2024 2023
$
$
Assets
Current assets
Cash 16,471 8,285
Trade and other receivables 23,843 26,113
Investment tax credits receivable 1,941 2,238
Inventories 14,926 18,930
Prepaid expenses and deposits 4,035 4,043
61,216 59,609
Property and equipment 4,241 3,900
Right-of-use assets 4,669 7,494
Intangible assets 11,241 17,668
Goodwill 46,721 46,219
Non-refundable investment tax credits receivable 6,523 5,602
Deferred income taxes 6,704 3,599
80,099 84,482
141,315 144,091
Liabilities
Current liabilities
Line of credit 2,227 4,685
Trade and other payables 16,371 17,534
Restructuring costs payable 240
Purchase price payable 204
Income taxes payable 625 659
Current portion of lease liabilities 1,380 1,688
Current portion of term loans 1,150 964
Deferred revenue 14,245 12,104
35,998 38,078
Lease liabilities 4,047 6,738
Long term debt 1,463 2,101
Deferred revenue 3,011 3,021
44,520 49,938
Equity
Share capital 88,742 90,902
Retained earnings (6,110) (9,997)
Share-based compensation and other reserves 5,399 5,295
Cumulative translation adjustment 8,764 7,953
96,796 94,153
141,315 144,091
Thousands of Canadian dollars
Three months ended Full year ended
October 31, October 31,
2024 2023 2024 2023
($) ($) ($) ($)
Net Income (loss) 2,055 2,529 4,699 1,265
Income Taxes (2,026) 717 (168) 757
Income (loss) before income taxes 29 3,246 4,531 (508)
Depreciation 727 772 3,289 3,087
Amortization 1,320 660 6,267 6,750
Financial expenses 202 401 951 1,738
EBITDA
(1) 2,278 5,079 15,038 11,067
Share-based payments (LTIP) 663 617 2,290 2,162
Restructuring costs 1,546
Adjusted EBITDA
(1) 2,941 5,696 17,328 14,775
Adjusted EBITDA Margin(1) 9.8 % 15.9 % 13.4 % 10.6 %
____________________________
Note:
(1) Non-IFRS measure. See "Non-IFRS Measures."
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SOURCE Haivision Systems Inc.
