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CST: 23/05/2019 20:16:29   

Vislink Technologies Reports Full Year 2018 Financial Results

52 Days ago

            Achieved Profitability in 2018 With Cost Rationalization Measures and 

Strong Fourth Quarter Revenues

HACKETTSTOWN, NJ, April 01, 2019 (GLOBE NEWSWIRE) -- Vislink Technologies, Inc. (“Vislink” or the “Company”) (Nasdaq: VISL), whose brands are recognized as the global leaders in live video communications, announced its results for the fourth quarter and year ended December 31, 2018. Management will hold a conference call to discuss the results on Monday, April 1, 2019 at 5:00 p.m. Eastern Time (details below).

2018 Highlights:

  • Revenues were $10.95 million for Q4 2018 and $37.9 million for the full year on a Non-GAAP basis.
  • Achieved profitability of $600,000 and $391,000 on a Non-GAAP basis1 for Q4 2018 and the full year, respectively.
  • Removed $9.5 million in costs from the business by streamlining operations, eliminating redundant personnel and consolidating facilities.
  • Received orders during the year valued at several million dollars to provide airborne video downlink surveillance to law enforcement agencies and the US military.
  • Debuted a new helmet and body-worn RF video transmission system designed for tactical applications for the armed forces and law enforcement agencies.
  • Deployed its technology to power referee cap-worn transmitters at the NCAA College Football championship games, which provided compelling looks and unprecedented angles for viewers at this high-profile sporting event.
  • Released a significant upgrade to the HCAM and Ultra Receiver wireless camera solution. The system now provides single-frame end-to-end latency for 4K UHD transmissions for the first time in the industry.
  • Implemented its onboard video technology at the Moto America Superbike Championship Racing Event. This ultra-compact technology is used to capture live video at high speeds. After successfully deploying it at the prestigious MotoGP and numerous other top-tier sporting events around the world for over a decade, it is now being used in the U.S.
  • Announced a new joint collaboration with long-time strategic partner Panasonic, integrating the HCAM 4K system with the Panasonic studio camera ranges.           

“We are pleased to report that in Q4 2018 we reached our goal of achieving profitability,” said Roger Branton, CEO of Vislink Technologies. “This was the result of the company-wide measures we put in place beginning in Q2 that were essential for rightsizing our operations. Throughout the year, we focused on implementing our cost reduction measures and setting the company on a course to achieve profitable and stable revenue growth. With these measures substantially completed, we were able to end the year in a stronger position.”

Mr. Branton continued. “Now that we’ve underpinned the company with operational stability, we have turned our attention to growing the business. We started to see the results of this with strong fourth quarter revenues. Looking forward, we’re planning an aggressive push into promising new sectors of our traditional markets, as well as markets outside our traditional ones. We have also evaluated strategic relationships including M&A opportunities, with a focus on streaming and other services that complement our existing solutions.”

GAAP RESULTS

  • For the year ended December 31, 2018, revenue was $38.3 million compared to $47.8 million for the year ended 2017.
  • Gross margins were 50% of revenue for the year ended December 31, 2018, compared to 41% of revenue for the year ended December 31, 2017.
  • For the year ended December 31, 2018, net loss attributable to common shareholders was $14.9 million, or $(0.90) per share, compared to net loss of $10.4 million, or $(0.85) per share for the year ended December 31, 2017.
  • EBITDA for December 31, 2018 was a negative $9.2 million compared to a negative $5.5 million for the year ended December 31, 2017.
  •  Ended the fourth quarter 2018 with $2 million in cash compared to $2.8 million at December 31, 2017.

NON-GAAP RESULTS¹

  • For the year ended December 31, 2018, adjusted revenue was $37.9 million compared to $48.8 million for the year ended 2017.
  • Adjusted Gross margins were 49.7% of revenue for the year ended December 31, 2018, compared to 49.3% of revenue for the year ended December 31, 2017.
  • For the year ended December 31, 2018, adjusted net loss attributable to common shareholders was $1.4 million, compared to net income of $3.2 million for December 31, 2017.
  • Adjusted Earnings before interest, taxes, depreciation and amortization (EBITDA) for December 31, 2018 was a positive $391,000 compared to $6 million for the year ended December 31, 2017.

Financial Results Conference Call

Management will hold a conference call to discuss financial results for the year ended December 31, 2018 and provide a corporate update on Monday, April 1, 2019 at 5:00 p.m. Eastern Time. To participate in the conference call, please call 1-866-987-9124 (toll free) or 1-409-217-8842 (international call-in) and ask to join the Vislink Technologies 2018 call. The call will also be simultaneously webcast. Listeners can access the webcast live through the Company's website at https://vislinktechnologies.com/investor-information/. For those who cannot participate in the call, an audio replay will be made available on the Vislink Technologies website.

¹NON-GAAP FINANCIAL MEASURES

We disclose non-GAAP financial measures as we believe they provide useful information on actual operating
performance. Readers are cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other companies.

Non-GAAP gross margin excludes the impact of purchase price amortization on the step up of assets as a result of the bargain purchase gain and the impact of foreign exchange gains or losses.

Non-GAAP income (loss) from operations excludes the impact of purchase price amortization related to the Vislink acquisition, acquisition-related expenses and restructuring expenses.

We use the above-noted non-GAAP financial measures for planning purposes and to allow us to assess the performance of our business before including the impacts of the items noted above as they affect the comparability of our financial results. These non-GAAP measures are reviewed regularly by management and the Board of Directors as part of the ongoing internal assessment of our operating performance. Adjusted EBITDA is defined as net income (loss) plus purchase price amortization, acquisition-related expense, restructuring expense, depreciation and amortization, foreign exchange gains or losses and interest expense.

Adjusted EBITDA is a metric used by investors and analysts for valuation purposes and we believe that it is an important indicator of our operating performance.

About Vislink Technologies, Inc.

Vislink Technologies brands are recognized as the global leaders in the design, manufacture and deployment of end-to-end live video communications solutions. They are trusted suppliers to tier-1 customers in broadcast/sports/entertainment, and law enforcement/public safety/defense markets. Their products are recognized for high levels of performance, reliability, build quality, extended operating ranges and compact form factors. In the broadcast, sports and entertainment sectors, IMT and Vislink provide high-definition communication links to reliably capture, transmit and manage live event footage. In the law enforcement, public safety & defense markets, IMT and Vislink provide secure video communications and mission-critical solutions to local, national and international agencies and organizations. Headquartered in Hackettstown, New Jersey, Vislink Technologies has over 70 patents and pending patent applications. More information can be found at www.vislinktechnologies.com.

# # #

Note on Forward-looking Statements

This press release may contain projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are the risk that our reduction in operating expenses may impact our ability to meet our business objectives and achieve our revenue targets and may not result in the expected improvement in our profitability, the fact that our future growth depends in part on further penetrating our addressable market and also growing internationally, and we may not be successful in doing so; our dependence on sales of certain products to generate a significant portion of our revenue; the effect of a decrease in the sales or change in sales mix of these products would harm our business; the risks that an economic downturn or economic uncertainty in our key U.S. and international markets may adversely affect demand for our products; difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; and other factors detailed in the Risk Factors section of our Registration Statement on Form S-1, as amended (No. 333-225975), which is on file with the Securities and Exchange Commission. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2018. These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein. The Company disclaims any obligation to update these forward-looking statements.

VISLINK TECHNOLOGIES, INC. (f/k/a xG TECHNOLOGY, INC.)
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(IN THOUSANDS EXCEPT NET LOSS PER SHARE DATA)

    For the Years Ended  
    December 31,  
    2018     2017  
Revenue, net   $ 38,294     $ 47,824  
Cost of Revenue and operating expenses                
Cost of components and personnel     19,192       28,220  
Inventory valuation adjustments     473       1,781  
General and administrative expenses     21,817       27,015  
Research and development     7,873       9,799  
Impairment charge     413        
Amortization and depreciation     2,953       4,398  
Total cost of revenue and operating expenses     52,721       71,213  
Loss from operations     (14,427 )     (23,389 )
Other (expenses) income                
Changes in fair value of derivative liabilities     3,186       105  
Gain on bargain purchase           10,911  
(Loss) gain on debt and payable extinguishment     (1,060 )     2,900  
Other income (expenses)     146       (251 )
Interest expense     (2,718 )     (629 )
Total other (expenses) income     (446 )     13,036  
Net loss   $ (14,873 )   $ (10,353 )
                 
Basic and diluted loss per share   $ (0.90 )   $ (0.85 )
                 
Weighted average number of shares outstanding:                
                 
Basic and Diluted     16,489       12,138  
                 
Comprehensive loss:                
Net loss   $ (14,873 )   $ (10,353 )
Unrealized (loss) gain on currency translation adjustment     (79 )     354  
                 
Comprehensive loss   $ (14,952 )   $ (9,999 )

The accompanying notes are an integral part of these consolidated financial statements.


VISLINK TECHNOLOGIES, INC. (f/k/a xG TECHNOLOGY, INC.)

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

    December 31,  
    2018     2017  
ASSETS                
Current assets                
Cash   $ 2,005     $ 2,799  
Accounts receivable, net     6,191       8,337  
Inventories, net     13,050       14,753  
Prepaid expenses and other current assets     780       626  
 Total current assets     22,026       26,515  
Property and equipment, net     2,096       3,237  
Intangible assets, net     4,691       6,894  
Total assets   $ 28,813     $ 36,646  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable   $ 7,072     $ 10,918  
Accrued expenses     2112       3,150  
Convertible notes payable           2,000  
Convertible promissory notes, net of discount of $16 and $-0-, respectively     400        
Due to related parties     361       998  
Customer deposits and deferred revenue     1,574       634  
Obligation under capital lease           18  
Derivative liabilities     1,118       2,399  
Total current liabilities     12,637       20,117  
Obligation under capital lease, net of current portion           30  
Convertible promissory notes, net of discount of $47 and $-0-, respectively     5,886        
Total liabilities     18,523       20,147  
Commitments and contingencies                
Stockholders’ equity                
Preferred stock – $0.00001 par value per share:
10,000,000 shares authorized at December 31, 2018 and 2017; -0- shares issued and outstanding as of December 31, 2018 and 2017
           
Common stock, – $0.00001 par value per share, 100,000,000 shares authorized, 18,776,980 and 14,897,392 shares issued and 18,776,978 and 14,897,390 outstanding at December 31, 2018 and 2017, respectively            
Additional paid in capital     244,562       235,819  
Accumulated other comprehensive income     275       354  
Treasury stock, at cost – 2 shares as of December 31, 2018 and 2017, respectively     (22 )     (22 )
Accumulated deficit     (234,525 )     (219,652 )
Total stockholders’ equity     10,290       16,499  
Total liabilities and stockholders’ equity   $ 28,813     $ 36,646  

The accompanying notes are an integral part of these consolidated financial statements.

Reconciliation of GAAP to Non-GAAP Results

Our financial statements are prepared in accordance with US GAAP on a basis consistent for all periods presented. In addition to results reported in accordance with US GAAP, we use non-GAAP financial measures as supplemental indicators of our operating performance. We disclose non-GAAP measures as we believe that these measures provide better information on actual operating results.

Readers are cautioned that non-GAAP financial measures do not have any standardized meaning prescribed by US GAAP and therefore may not be comparable to similar measures presented by other companies.

VISLINK TECHNOLOGIES, INC. (f/k/a xG TECHNOLOGY, INC.)
RECONCILIATION OF GAAP to NON-GAAP RESULTS
QUARTER ENDING DECEMBER 31, 2018

          Stock                 Non  
In thousands of US$   GAAP     Option     One-Time     Discontinued     GAAP  
    Q4     Expense     Expenses     Operations     Q4  
Revenue   $ 10,812               138       —      $ 10,950  
Gross margin     47.4 %                             48.1 %
                                         
Cost of revenue and operating expenses                                        
 Cost of components and personnel     5,685                               5,685  
 Inventory valuation adjustments     120                               120  
 General and administrative expenses     5,238       (358 )     (34 )     (416 )     4,430  
 Research and development expenses     1,220       (257 )     —        (65 )     898  
 Impairment charge     245               (245 )             —   
 Amortization and depreciation     578       —        —        (473 )     105  
Total cost of revenue and operating expenses     13,086       (615 )     (279 )     (954 )     11,238  
                                         
Income (loss) from operations     (2,274 )     615       417       954       (288 )
                                         
Other income (expense)                                        
 Changes in fair value of derivative liabilities     684                               684  
 Loss on debt extinguishment     (1,060 )             1,060               —   
 Other expense     95                               95  
 Interest expense     (399 )     —        396       —        (3 )
Total other income (expense)     (680 )     —        1,456       —        776  
                                         
Net income (loss)   $ (2,954 )   $ 615     $ 1,873     $ 954     $ 488  
                                         
EBITDA   $ (1,977 )   $ 615     $ 1,477     $ 481     $ 596  


VISLINK TECHNOLOGIES, INC.
(f/k/a xG TECHNOLOGY, INC.)    

RECONCILIATION OF GAAP to NON-GAAP RESULTS
2018

          Stock                  Non  
In thousands of US$   GAAP     Option     One-Time     Discontinued     GAAP  
    2018     Expense     Expenses     Operations     2018  
Revenue   $ 38,294               138       (447 )   $ 37,985  
  Gross margin     49.9 %                             49.7 %
Cost of revenue and operating expenses                                        
 Cost of components and personnel     19,192                       (84 )     19,108  
 Inventory valuation adjustments     473                       —        473  
 General and administrative expenses     21,817       (1,750 )     (178 )     (2,558 )     17,331  
 Research and development expenses     7,873       (1,978 )     —        (1,881 )     4,014  
 Impairment charge     413               —        (413 )     —   
 Amortization and depreciation     2,953       —        —        (1,341 )     1,612  
Total cost of revenue and operating expenses     52,721       (3,728 )     (178 )     (6,277 )     42,538  
                                         
Income (loss) from operations     (14,427 )     3,728       316       5,830       (4,553 )
                                         
Other income (expense)                                        
 Changes in fair value of derivative liabilities     3,186                               3,186  
 Loss on debt extinguishment     (1,060 )             1,060               —   
 Other expense     146                               146  
 Interest expense     (2,718 )     —        2,512       —        (206 )
Total other income (expense)     (446 )     —        3,572       —        3,126  
                                         
Net income (loss)   $ (14,873 )   $ 3,728     $ 3,888     $ 5,830     $ (1,427 )
                                         
EBITDA   $ (9,202 )   $ 3,728     $ 1,376     $ 4,489     $ 391  

FOR MORE INFORMATION:

Daniel Carpini
941-953-9035
daniel.carpini@vislink.com

Investor Relations:
John Marco/CORE IR
516-222-2560
johnm@coreir.com

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