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CST: 11/12/2019 05:11:37   

Vislink Technologies Reports Q3 2019 Financial Results

26 Days ago

HACKETTSTOWN, NJ, Nov. 14, 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 third quarter ended September 30, 2019. The Company has issued a Corporate Update that includes a review of the financial results and news regarding recent corporate developments (more information below).

Recent Company Highlights:

  • Was awarded a $2.8 million U.S. Army contract for handheld intelligence, surveillance and reconnaissance (ISR) receiver devices. Subsequent to the end of the third quarter, the Company announced it had completed the first delivery against the contract.
  • Received orders valued at $1.6 million from global clients for satellite communications equipment.
  • Was awarded a Basic Ordering Agreement (BOA) from the NATO Communications and Information Agency (NCIA).
  • Announced a further three-year contract with Dorna Sports as Official RF Systems Supplier for the MotoGP motorcycle racing circuit.
  • Closed on a $12 million public offering that allowed the Company to pay off convertible debt incurred during 2018 in full and ahead of schedule.
  • Subsequent to the end of the third quarter, the Company received $3 million in new orders in live production, military-government and satcom markets, which represent part of a $13 million current backlog (a 42% year-over-year increase).
  • Also subsequent to the end of the third quarter, the Company received a $300,000 order for wireless camera systems for use by the U.S. Army.

“In the third quarter, we received an injection of capital which allowed us to pay off convertible debt incurred during the financial turnaround we began in 2018,” said Roger Branton, CEO of Vislink Technologies. “This allowed the Company to de-lever its balance sheet and be free of all funded debt for the first time. However, our performance was impeded during the quarter by lingering negative effects to our supply chain. This impacted our ability to book and ship orders and was reflected in our Q3 results. As the quarter progressed, the investments we started making to realign the supply chain began to bear fruit. This was reflected in the new orders and strong backlog that significantly exceeds the previous year’s, both of which we announced after the end of the quarter. We are confident that we are well-positioned operationally to profitably build our order book, as we focus on pursuing new growth areas, as well as capturing the ongoing demand we are experiencing in our main business sectors.”

GAAP RESULTS

  • Revenues for the three and nine months ended September 30, 2019 were $5 million and $20.5 million, compared to $8.3 million and $27.4 million in the corresponding periods in 2018.
  • Gross margins were 40.7% of revenue in the third quarter 2019, compared to 49.2% of revenue in the third quarter of 2018.
  • Net loss attributable to common shareholders was $5 million, or $(0.40) per share in the third quarter of 2019 compared to a net loss of $2.2 million, or $(1.30) per share in the third quarter of 2018. Net loss attributable to common shareholders was $11.7 million, or $(2.13) per share for the nine months ended September 30, 2019 compared to a net loss of $11.9 million, or $(7.19) per share for the nine months ended September 30, 2018.
  • EBITDA (earnings before interest, taxes depreciation and amortization) was a negative $8.1 million for the nine months ended September 30, 2019, compared to a negative $7.2 million for the nine months ended September 30, 2018.
  • Ended the third quarter 2019 with $505,000 in cash, compared to $416,000 at the end of the second quarter of 2019.

NON-GAAP RESULTS¹

  • For the quarter ended September 30, 2019, adjusted net loss attributable to common shareholders was $3.8 million, and $8.2 million for the nine months ending September 30, 2019.
  • For the quarter ended September 30, 2019, adjusted EBITDA loss was $2.9 million, and $4.7 million for the nine months ending September 30, 2019.

Corporate Update

Vislink Technologies has issued a Corporate Update for its shareholders and other stakeholders that includes a review of the third quarter 2019 financial results and an update on corporate developments. The Corporate Update document can be viewed in the Latest Investor News section of the Vislink Technologies website, at https://www.vislink.com/investors/investor-news/.

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 net income (loss) consists of net income (loss) excluding (i) share-based compensation and (ii) one-time expenses including severance and restructuring charges and discontinued operations.

Non-GAAP EBITDA income (loss) consists of net income (loss) excluding (i) share-based compensation, (ii) depreciation and amortization, (iii) interest expense and (iv) one-time expenses including severance and restructuring charges and discontinued operations.

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.

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.

About Vislink Technologies, Inc.

Vislink Technologies is a global leader in the development and distribution of advanced communication solutions. Driven by technical excellence that has led the industry for over 50 years, our innovative products and turnkey solutions provide reliable connectivity in the toughest environments across the global live production, military and government sectors. Our solutions include high-definition communication links that reliably capture, transmit and manage live event footage, as well as secure video systems that support mission-critical applications. Headquartered in Hackettstown, New Jersey, Vislink Technologies has over 60 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 our Annual Report on Form 10-K for the year ended December 31, 2018 and our other subsequent filings with the Securities and Exchange Commission. 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.

FOR MORE INFORMATION:

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

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(IN THOUSANDS EXCEPT NET LOSS PER SHARE DATA)

    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2019     2018     2019     2018  
Revenue   $ 5,007     $ 8,325     $ 20,565     $ 27,482  
                                 
Cost of revenue and operating expenses                                
Cost of components and personnel     2,968       4,230       10,611       13,507  
Inventory valuation adjustments     223       119       312       353  
General and administrative expenses     5,329       4,718       16,062       16,578  
Research and development expenses     799       1,286       2,591       6,653  
Impairment charge                       168  
Amortization and depreciation     586       671       1,763       2,376  
Total cost of revenue and operating expenses     9,905       11,024       31,339       39,635  
                                 
Loss from operations     (4,898 )     (2,699 )     (10,774 )     (12,153 )
                                 
Other income (expense)                                
Changes in fair value of derivative liabilities     281       848       954       2,502  
Gain (loss) on conversion of debentures     15             (33 )      
Other income expense           13             51  
Interest expense, net     (393 )     (369 )     (1,807 )     (2,319 )
Total other income (expense)     (97 )     492       (886 )     234  
                                 
Net loss   $ (4,995 )   $ (2,207 )   $ (11,660 )   $ (11,919 )
                                 
Basic and diluted loss per share   $ (0.40 )   $ (1.30 )   $ (2.13 )   $ (7.19 )
Weighted average number of shares outstanding:                                
Basic and diluted     12,417       1,692       5,480       1,657  
Comprehensive loss:                                
Net loss   $ (4,995 )   $ (2,207 )   $ (11,660 )   $ (11,919 )
Unrealized gain (loss) on currency translation adjustment     81       (23 )     82       (49 )
Comprehensive loss   $ (4,914 )   $ (2,230 )   $ (11,578 )   $ (11,968 )

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

VISLINK TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

    September 30, 2019     December 31, 2018  
      (unaudited)          
ASSETS                
Current assets                
Cash   $ 505     $ 2,005  
Accounts receivable, net     4,802       6,191  
Inventories, net     12,788       13,050  
Prepaid expenses and other current assets     949       780  
Total current assets     19,044       22,026  
Right of use assets, operating leases     2,045        
Property and equipment, net     2,056       2,096  
Intangible assets, net     3,368       4,691  
Total assets   $ 26,513     $ 28,813  
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable   $ 6,894     $ 7,072  
Accrued expenses     2,291       2,112  
Note payable     231        
Convertible promissory notes, net of discount of $-0- and $16, respectively           400  
Operating lease obligations, current     820        
Due to related parties     503       361  
Customer deposits and deferred revenue     2,490       1,574  
Derivative liabilities     140       1,118  
Total current liabilities     13,369       12,637  
Convertible promissory notes, net of discount of $-0- and $47, respectively           5,886  
Operating lease obligations, net of current portion     1,234        
Total liabilities     14,603       18,523  
Commitments and contingencies (See Note 10)                
Stockholders’ equity                
Preferred stock – $0.00001 par value per share: 10,000,000 shares authorized as of September 30, 2019 and December 31, 2018; -0- shares issued and outstanding as of September 30, 2019 and December 31, 2018            
Common stock – $.00001 par value; 100,000,000 shares authorized; 14,323,176 and 1,877,698 shares issued and 14,307,222 and 1,877,697 outstanding at September 30, 2019 and December 31, 2018, respectively            
Additional paid-in capital     258,015       244,562  
Accumulated other comprehensive income     357       275  
Treasury stock, at cost – 15,954 shares at September 30, 2019 and 1 share at December 31, 2018, respectively     (277 )     (22 )
Accumulated deficit     (246,185 )     (234,525 )
Total stockholders’ equity     11,910       10,290  
Total liabilities and stockholders’ equity   $ 26,513     $ 28,213  

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.
RECONCILIATION OF GAAP to NON-GAAP RESULTS
QUARTER ENDING SEPTEMBER 30, 2019

     Stock      Non  
   GAAP  Option  One-Time  Discontinued GAAP  
In thousands of US$  Q3  Expense  Expenses  Operations  Q3  
Revenue $  5,007         $  5,007    
  Gross margin   40.7 %         40.7 %  
             
Cost of revenue and operating expenses            
 Cost of components and personnel    2,968            2,968    
 Inventory valuation adjustments   223            223    
 General and administrative expenses   5,329      (493 )   (537 )   (124 )    4,175    
 Research and development expenses    799            799    
 Amortization and depreciation      586      -      -      -       586    
Total cost of revenue and operating expenses    9,905      (493 )   (537 )    (124 )   8,751    
             
Income (loss) from operations    (4,898 )   493     537     124      (3,744 )  
             
Other income (expense)            
 Changes in fair value of derivative liabilities   281           281    
 Loss on conversion of debentures   15           15    
 Interest expense   (393 )    -     -      -      (393 )  
Total other income (expense)   (97 )    -     -      -     (97 )  
             
Net income (loss) $  (4,995 ) $  493   $ 537   $  124   $  (3,841 )
           
EBITDA $ (4,016 ) $    493   $    537   $    124   $  (2,862 )

VISLINK TECHNOLOGIES, INC.
RECONCILIATION OF GAAP to NON-GAAP RESULTS
NINE MONTHS ENDING SEPTEMBER 30, 2019

     Stock      Non  
   GAAP  Option  One-Time  Discontinued GAAP  
In thousands of US$  YTD Q3  Expense  Expenses  Operations  YTD
 Q3
 
Revenue $  20,565     221   $  20,786    
  Gross margin   48.4 %         49.0 %  
             
Cost of revenue and operating expenses            
 Cost of components and personnel    10,611            10,611    
 Inventory valuation adjustments   312           312    
 General and administrative expenses   16,062      (1,769 )   (812 )   (592 )    12,889    
 Research and development expenses    2,591       (23 )      2,568    
 Amortization and depreciation      1,763      -      -        -       1,763    
Total cost of revenue and operating expenses    31,339      (1,769 )   (835 )    (592 )    28,143    
             
Income (loss) from operations    (10,774 )    1,769     1,056      592      (7,357 )  
             
Other income (expense)            
 Changes in fair value of derivative liabilities   954       -       954    
 Loss on conversion of debentures   (33 )          (33 )  
 Interest expense    (1,807 )    -     -      -      (1,807 )  
Total other income (expense)    (886 )    -     -      -      (886 )  
             
Net income (loss) $  (11,660 ) $  1,769   $ 1,056   $  592   $  (8,243 )
           
EBITDA $ (8,090 ) $    1,769   $    1,056   $    592   $  (4,673 )

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