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Jan 15, 2025, 17:03 ET
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 endedOctober 31, | Full year endedOctober 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, 2024 | October 31, 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 October 31, | Full year endedOctober 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.” |
SOURCE Haivision Systems Inc.