Business News
VUANCE Ltd. Announces Fourth Quarter 2007 Operating Results
Thursday 27. March 2008 - Quarterly Revenues Increase 71% and Annual Revenues Increase 47.4% from Prior-Year Periods
VUANCE, Ltd. (Nasdaq and Euronext: VUNC), a leading provider of innovative Radio Frequency Verification Solutions, including active RFID, electronic access control, credentialing, accountability and incident response management, today announced its operating results for the fourth quarter and the full year of 2007.
Recent Business Highlights
— Fourth quarter revenues increased 71%, to $4.1 million, when compared
with the prior-year period.
— Fourth quarter gross profit increased 73%, to $2.1 million, when
compared with the prior-year period.
— During the fourth quarter, the August acquisition of Milwaukee based
Security Holding Corp (“SHC”) was fully integrated into the Company. It
was the first full quarter for which its finances were recognized as
part of VUANCE. In addition, the sales teams have now been fully
integrated into a reorganized and market-focused sales team.
— A pilot program by Anglo America’s Chilean copper mines to increase
safety and productivity was completed and VUANCE’s Active RFID
solutions are now being implemented in other mines.
— VUANCE’s announced how its Active RFID and electronic access control
products offered a set of solutions for Charlotte Country Florida
Airport in Punta Gorda, and other airports in the future.
— VUANCE’s AAID Security Solutions President, Pete Martin, was selected
as an Influential Security Industry Vendor by Security Magazine.
Fourth Quarter and Year Ended 2007 Operating Results
Revenues for the quarter ended December 31, 2007 increased 71% to $4.1 million compared with revenues of $2.4 million in the fourth quarter of 2006. For the year ended December 31, 2007, revenues increased 47.4% to $13 million versus $8.8 million in 2006.
Gross profit increased 73% to $2.1 million in the most recent quarter, versus $1.2 million in the three months ended December 31, 2006. For the year ended December 31, 2007, gross profit increased 38.9% to $7.4 million, compared with $5.3 million for the year ended December 31, 2006.
The Company reported a net loss of $6.1 million, or $(1.19) per share, in the three months ended December 31, 2007, compared with a net income of $7.9 million, or $1.90 per diluted share, in the fourth quarter of 2006. A net loss of $11.3 million, or $(2.57) per share, was recorded during the full year 2007, versus a net income of $5.4 million, or $1.32 per diluted share, in 2006. A significant amount of the net loss in the fourth quarter of 2007 reflected a permanent reduction in the value of the shares of On Track Innovation (NASDAQ:OTIV).
On a non-GAAP basis (see reconciliation between GAAP and non-GAAP results at the end of this press release), excluding non-cash stock-based compensation, amortization of intangibles assets related to SHC acquisition and Beneficial Conversion Feature (hereinafter “BCF”) of convertible bonds of $461,000, the Company’s net loss totaled $5.6 million, or $(1.10) per share, in the fourth quarter of 2007, versus a non-GAAP net income of $8.1 million, or $1.94 per diluted share, in the three months ended December 31, 2006. Non- cash stock-based compensation and BCF of convertible bonds of $184,000 was recorded in the fourth quarter of 2006. Excluding non-cash stock-based compensation, amortization of intangibles assets related to SHC acquisition, onetime expenses and BCF of convertible bonds of $1.6 million the Company’s non-GAAP net loss totaled $9.7 million, or $(2.21) per share, in the year ended December 31, 2007, compared with a non-GAAP net income of $5.8 million, $1.41 per diluted share, in the previous year. Non-cash stock-based compensation and BCF of convertible bonds of $391,000 was recorded in 2006.
Management Comments
“We are pleased to report that revenue and gross profits increased 71% and 73%, respectively, in the fourth quarter of 2007 and 47% and 39% for the year as a whole when compared with the prior-year periods. This demonstrates that re-positioning the Company to focus on selling within the more stable US market can create a solid business model for VUANCE,” stated Eyal Tuchman, Chief Executive Officer of VUANCE Ltd. “Indeed, the numbers were in line with management’s expectations.”
“The fourth quarter net loss was higher than a year earlier, reflecting (1) the need to recognize the significant price decrease of OTI shares, (2) the impact of SHC consolidation, and (3) higher selling and marketing expenses related to our focus on providing Real-time Location, Electronic Access Control, and Incident Response Management Solutions within select vertical markets within the United States. The annual net loss was higher for these reasons as well as the substantial additional costs related to the two completed acquisitions during 2007.”
“This was a significant quarter for VUANCE, as we began executing management’s plan to grow revenues in the United States by acquiring synergistic companies that can increase our sales power. With the integration now in place, we can focus on our goals of increasing our share of the market for long-range active RFID, electronic access control, credentialing and incident response management systems within the public safety, commercial, and government sectors. Indeed, we’re building closer relationships with our business partners, leading system integrators and distributors, who appreciate VUANCE’s strong competitive advantage: we’re the only company to offer this full range of products enabling the business partners to provide their clients with seamless, end-to-end solutions.”
Mr. Tuchman concluded, “With a solid business model on which to build, we are optimistic about 2008. We anticipate sales revenues of over $20 million this year. We will remain alert for organic growth and acquisition opportunities that can contribute to our forward momentum within target vertical markets. In addition, during the fourth quarter of 2007 we began implementing added cost controls, which will take effect during 2008 and assist VUANCE in achieving operational profitability by the end of 2008 and net profitability in future years.”