Vislink Technologies Reports Full Year 2018 Financial Results

Achieved Profitability in 2018 With Cost Rationalization Measures and

Strong Fourth Quarter Revenues

 

HACKETTSTOWN, NJ — April 1, 2019 —

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.

 

FOR MORE INFORMATION:

 

Daniel Carpini

941-953-9035

daniel.carpini@vislink.com

 

Investor Relations:

 

John Marco/CORE IR

516-222-2560
johnm@coreir.com

 

 
 

 

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 
   GAAP   Option   One-Time   Discontinued   GAAP 
In thousands of US$  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 
   GAAP   Option   One-Time   Discontinued   GAAP 
In thousands of US$  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 

 

 
 


The following information was filed by Vislink Technologies, Inc. (VISL) on Wednesday, April 3, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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