Vislink Technologies, Inc. (“Vislink” or the “Company”) (Nasdaq:
VISL) announced its results for the third quarter ended September
30, 2020. Company management will host a live webcast on Friday,
November 13, 2020 at approximately 10:00 a.m. ET to review the
Company’s financial and operating results and provide a general
business update (see webcast details below).
Financial Highlights
- Revenues for the three months ended September 30, 2020 were
$4.8 million, compared to $5 million for the three months ended
September 30, 2019.
- EBITDA (earnings before interest,
taxes depreciation and amortization) was a negative $2.4 million
for the three months ended September 30, 2020, compared to a
negative $4.7 million for the three months ended September 30,
2019.
- Ended the third quarter 2020 with $3.1 million in cash.
- Gross margins were 31.8% of revenue in the third quarter of
2020, compared to 40.7% in the third quarter of 2019.
- Net loss attributable to common shareholders was $2.8 million,
or $(0.17) per share in the third quarter 2020 compared to a net
loss of $5 million, or $(2.41) per share in the third quarter of
2019.
- Net loss attributable to common
shareholders was $8 million, or $(0.61) per share for the nine
months ended September 30, 2020 compared to a net loss of $11.7
million, or $(12.77) per share for the nine months ended September
30, 2019.
“In the third quarter, we continued to feel the
effects of a challenging macro business environment,” said Carleton
Miller, CEO of Vislink Technologies. “The ongoing COVID-19 pandemic
limited our growth and softened demand in our key Live Production
and MilGov markets, as customers delayed deliveries for new and
upgraded equipment. The pandemic also impacted our supply chain,
which led to an interruption in receiving components from our
suppliers. This further constricted our ability to fulfill orders
in the quarter, although we do expect these interruptions to be
resolved over the course of Q4.”
“In response to this, we redoubled our efforts
to successfully streamline all aspects of our business. We built on
the disciplined, cost-focus approach we instituted earlier this
year and realized additional operational efficiencies during the
quarter. We will continue this approach with additional cost
reduction measures that are expected to achieve $5 million in
savings. Our diligence in adhering to this next phase of our
operational turnaround helped us mitigate the effects of the
business downturn, conserve cash and stabilize our finances. These
actions have put us in a better position to pursue and capture
growth opportunities as they arise for the remainder of 2020 and
into next year.”
Mr. Miller continued, “During the third quarter,
we experienced positive results from our product-focused
innovation. We were pleased to introduce two significant product
lines: the DVE/IRD satcom encoder/decoder, and the IP Link 3.0
digital microwave system. These will be followed by the
introduction of the new Quantum Receiver in the first half of 2021.
While the cancelling and scaling back of major live sporting and
entertainment events has pushed back infrastructure investments
over the past two quarters, we are slowly witnessing such events
coming back on line. This will allow us to again leverage our
experience in covering events like the Olympic Games, World Cup and
other tier-one competitions that we traditionally participate in.
Because of this, we remain cautiously optimistic for a return to
normalcy in the industries we serve.”
Financial Results Webcast Details
On Friday, November 13, 2020, Vislink’s CEO,
Carleton Miller, and CFO, Michael Bond, will host a webcast at
approximately 10:00 a.m. ET to review the Company’s
financial and operating results and provide a general business
update. This webcast will be live
at https://services.choruscall.com/links/visl201113.html.
Investors will be able to submit questions during the webcast.
Non-GAAP Financial Measure:
EBITDA
To supplement our financial results presented in
accordance with Generally Accepted Accounting Principles (GAAP), we
are presenting EBITDA in this earning release and the related
earning conference call. EBITDA is a non-GAAP financial measure
that is not based on any standardized methodology prescribed by
GAAP and is not necessarily comparable to similarly titled measures
presented by other companies. We define EBITDA as our net income
(loss), excluding the impact of depreciation and amortization
expense and interest income/expense. We have presented EBITDA
because it is a key measure used by our management and board of
directors to understand and evaluate our operating performance, to
establish budgets and to develop operational goals for managing our
business. In particular, we believe that excluding the impact of
these expenses in calculating EBITDA can provide a useful measure
for period-to-period comparisons of our core operating
performance.
About Vislink Technologies, Inc.
Vislink is a global technology business
specializing in the collection, delivery, and management of high
quality, live video and associated data from the scene of the
action to the viewing screen. For the broadcast markets, Vislink
provides solutions for the collection of live news, sports, and
entertainment events. Vislink also furnishes the surveillance and
defense markets with real-time video intelligence solutions using a
variety of tailored transmission products. The Vislink team also
provides professional and technical services utilizing a staff of
technology experts with decades of applied knowledge and real-world
experience to the areas of a terrestrial microwave, satellite,
fiber optic, surveillance, and wireless communications systems, to
deliver a broad spectrum of customer solutions. Vislink’s shares of
Common Stock are publicly traded on the Nasdaq Capital Market under
the ticker symbol “VISL.” For more information, visit
www.vislink.com.
Note on Forward-looking Statements
Certain statements in this press release are
forward-looking statements that involve substantial risks and
uncertainties for purposes of the safe harbor provided by the
Private Securities Litigation Reform Act of 1995. This press
release contains forward-looking statements that involve
substantial risks and uncertainties for purposes of the safe harbor
provided by the Private Securities Litigation Reform Act of 1995.
Any statements, other than statements of historical fact included
in this press release, including those regarding the Company’s
strategy, future operations, future financial position, projected
expenses, prospects, plans, objectives of management and financial
reporting abilities, maintenance of new product pipeline and
technical innovation, the Company’s expected focus on financial
discipline and cost reduction plans, anticipated cost savings,
planned adjustments to its workforce, expected market opportunities
across the Company’s operating segments, the Company’s expectations
as to its operational turnaround, including operational
efficiencies and future capital allocation, the effects of the
COVID-19 pandemic, the sufficiency of the Company’s capital
resources to fund the Company’s operations and any statements
regarding future results are forward-looking statements. Vislink
may not actually achieve the plans, carry out the intentions or
meet the expectations or projections disclosed in any
forward-looking statements such as the foregoing and you should not
place undue reliance on such forward-looking statements. Such
statements are based on management’s current expectations and
involve risks and uncertainties, including those discussed in
Vislink’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, filed with the SEC on April 1, 2020 and in
subsequent filings with, or submissions to, the SEC.
The statements made in this press release speak
only as of the date stated herein, and subsequent events and
developments may cause the Company’s expectations and beliefs to
change. While the Company may elect to update these forward-looking
statements publicly at some point in the future, the Company
specifically disclaims any obligation to do so, whether as a result
of new information, future events or otherwise, except as required
by law. These forward-looking statements should not be relied upon
as representing the Company’s views as of any date after the date
stated herein.
For more information: investors@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, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
4,778 |
|
|
$ |
5,007 |
|
|
$ |
16,138 |
|
|
$ |
20,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue and
operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of components and personnel |
|
|
3,257 |
|
|
|
2,968 |
|
|
|
8,505 |
|
|
|
10,611 |
|
Inventory valuation adjustments |
|
|
195 |
|
|
|
223 |
|
|
|
244 |
|
|
|
312 |
|
General and administrative expenses |
|
|
3,200 |
|
|
|
5,329 |
|
|
|
12,721 |
|
|
|
16,062 |
|
Research and development expenses |
|
|
616 |
|
|
|
799 |
|
|
|
1,831 |
|
|
|
2,591 |
|
Gain on lease termination |
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
— |
|
Amortization and depreciation |
|
|
337 |
|
|
|
586 |
|
|
|
1,094 |
|
|
|
1,763 |
|
Total cost of revenue and operating expenses |
|
|
7,605 |
|
|
|
9,905 |
|
|
|
24,374 |
|
|
|
31,339 |
|
Loss from operations |
|
|
(2,827 |
) |
|
|
(4,898 |
) |
|
|
(8,236 |
) |
|
|
(10,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair value of derivative liabilities |
|
|
82 |
|
|
|
281 |
|
|
|
1 |
|
|
|
954 |
|
Gain (loss) on conversion of debentures |
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
(33 |
) |
Gain on settlement of related party obligations |
|
|
— |
|
|
|
— |
|
|
|
331 |
|
|
|
— |
|
Other income (expense) |
|
|
5 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Interest expense, net |
|
|
(53 |
) |
|
|
(393 |
) |
|
|
(102 |
) |
|
|
(1,807 |
) |
Total other income (expense) |
|
|
34 |
|
|
|
(97 |
) |
|
|
235 |
|
|
|
(886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,793 |
) |
|
$ |
(4,995 |
) |
|
$ |
(8,001 |
) |
|
$ |
(11,660 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
$ |
(0.17 |
) |
|
$ |
(2.41 |
) |
|
$ |
(0.61 |
) |
|
$ |
(12.77 |
) |
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
16,296 |
|
|
|
2,070 |
|
|
|
13,084 |
|
|
|
913 |
|
Comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,793 |
) |
|
$ |
(4,995 |
) |
|
$ |
(8,001 |
) |
|
$ |
(11,660 |
) |
Unrealized gain (loss) on currency translation adjustment |
|
|
(192 |
) |
|
|
81 |
|
|
|
57 |
|
|
|
82 |
|
Comprehensive loss |
|
$ |
(2,985 |
) |
|
$ |
(4,914 |
) |
|
$ |
(7,944 |
) |
|
$ |
(11,578 |
) |
The accompanying notes are an integral part of
these condensed consolidated financial statements.
VISLINK TECHNOLOGIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(IN THOUSANDS EXCEPT SHARE AND PER SHARE
DATA)
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
3,123 |
|
|
$ |
1,737 |
|
Accounts receivable, net |
|
|
4,063 |
|
|
|
6,714 |
|
Inventories, net |
|
|
9,532 |
|
|
|
7,674 |
|
Prepaid expenses and other current assets |
|
|
964 |
|
|
|
660 |
|
Total current assets |
|
|
17,682 |
|
|
|
16,785 |
|
Right of use assets, operating leases |
|
|
1,616 |
|
|
|
1,925 |
|
Property and equipment, net |
|
|
1,849 |
|
|
|
1,972 |
|
Intangible assets, net |
|
|
2,155 |
|
|
|
2,922 |
|
Total assets |
|
$ |
23,302 |
|
|
$ |
23,604 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
3,339 |
|
|
$ |
6,784 |
|
Accrued expenses |
|
|
1,873 |
|
|
|
1,912 |
|
Notes payable |
|
|
96 |
|
|
|
339 |
|
Current portion of PPP loan |
|
|
424 |
|
|
|
— |
|
Operating lease obligations, current |
|
|
324 |
|
|
|
821 |
|
Due to related parties |
|
|
— |
|
|
|
505 |
|
Customer deposits and deferred revenue |
|
|
1,593 |
|
|
|
2,821 |
|
Derivative liabilities |
|
|
29 |
|
|
|
30 |
|
Total current liabilities |
|
|
7,678 |
|
|
|
13,212 |
|
Long-term portion of PPP loan |
|
|
744 |
|
|
|
— |
|
Operating lease obligations, net of current portion |
|
|
1,279 |
|
|
|
1,163 |
|
Total liabilities |
|
|
9,701 |
|
|
|
14,375 |
|
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, 2020, and December 31, 2019; -0-
shares issued and outstanding as of September 30, 2020, and
December 31, 2019 |
|
|
— |
|
|
|
— |
|
Common stock – $0.00001 par value per share, 100,000,000 shares
authorized, 17,160,808 and 3,594,548 shares issued and 17,158,149
and 3,591,889 outstanding as of September 30, 2020 and December 31,
2019, respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
274,187 |
|
|
|
261,871 |
|
Accumulated other comprehensive income |
|
|
264 |
|
|
|
207 |
|
Treasury stock, at cost – 2,659 shares at September 30, 2020, and
December 31, 2019, respectively |
|
|
(277 |
) |
|
|
(277 |
) |
Accumulated deficit |
|
|
(260,573 |
) |
|
|
(252,572 |
) |
Total stockholders’ equity |
|
|
13,601 |
|
|
|
9,229 |
|
Total liabilities and stockholders’ equity |
|
$ |
23,302 |
|
|
$ |
23,604 |
|
The accompanying notes are an integral part of
these condensed consolidated financial statements.
Reconciliation of GAAP to Non-GAAP Results
VISLINK TECHNOLOGIES,
INC. RECONCILIATION OF GAAP to
NON-GAAP RESULTS QUARTER ENDING SEPTEMBER 30,
2020 (IN THOUSANDS)
Reconciliation of net income to EBITDA |
|
|
|
Net loss |
$ |
(2,793 |
) |
|
interest
expense |
|
(53 |
) |
|
Amortization and depreciation |
|
337 |
|
|
EBITDA |
$ |
(2,403 |
) |
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