Vislink Technologies Reports Q2 2019 Financial Results • Vislink
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Vislink Technologies Reports Q2 2019 Financial Results

HACKETTSTOWN, NJ — August 14, 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 first quarter ended June 30, 2019. As previously announced, and in lieu of holding a conference call, the Company has issued a Corporate Update that includes a review of the financial results and an update on corporate developments (more information below).

Recent Highlights:

  • Introduced the INCAM-HS, an integrated 4K UHD wireless camera transmitter unit designed for SONY’s HDC-5500 multi-format live camera system.
  • Partnered with Grass Valley on an all-in-one broadcast solution that includes the Vislink INCAM-HG 4K UHD transmitter and Grass Valley’s LDX 86N Series camera.
  • Introduced the HCAM+ULRX wireless camera solution, which provides end-to-end, ultra-low latency when working with 4K content for broadcast sports and major entertainment event coverage applications.
  • Received $650,000 in airborne video downlink orders from California and Minnesota law enforcement agencies.
  • Deployed its wireless camera equipment to cover events at the OGN Super Arena, the largest esports studio arena on the U.S. West Coast, and the first esports venue in North America designed specifically for popular “battle royale” esports games.
  • 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 second quarter, the Company also closed on a $12 million public offering that allowed it to pay off convertible debt incurred during 2018 in full and ahead of schedule.

“We successfully completed a company-wide restructuring over the last year and expected to have a revised capital structure in place in early 2019,” said Roger Branton, CEO of Vislink Technologies. The delay in finalizing that impacted our Q2 results and was reflected in the revenue and profit figures we announced. The Company succeeded in finalizing a new capital arrangement in July 2019 which allowed us to strengthen our balance sheet and become debt-free. We are optimistic that the difficult steps taken over the last year are behind us and we are in a much better position to reach our objective of sustainable and profitable growth.”

GAAP RESULTS

  • Revenues for the three and six months ended June 30, 2019 were $7.4 million and $15.6 million compared to $9.4 million and $19.2 million in the corresponding periods in 2018.
  • Gross margins remained steady at 52.1% of revenue in the second quarter 2019, compared to 52.3% of revenue in the second quarter of 2018.
  • Net loss attributable to common shareholders was $3.6 million, or $(1.79) per share in the second quarter of 2019 compared to a net loss of $6.4 million, or $(3.95) per share in the second quarter of 2018. Net loss attributable to common shareholders was $6.7 million, or $(3.41) per share for the six months ended June 30, 2019 compared to net income of $9.7 million, or $(6.24) per share for the six months ended June 30, 2018.
  • EBITDA (earnings before interest, taxes depreciation and amortization) was a negative $1.9 million for the three months ended June 30, 2019, compared to a negative $2.8 million for the three months ended June 30, 2018.
  • Ended the second quarter 2019 with $416,000 in cash, compared to $324,000 at the end of the first quarter of 2019.

NON-GAAP RESULTS¹

  • For the quarter ended June 30, 2019, adjusted net loss attributable to common shareholders was $2.5 million and $4.4 million for the six months ending June 30, 2019.
  • For the quarter ended June 30, 2019, adjusted EBITDA loss was $.8 million and $1.8 million for the six months ending June 30, 2019.

Corporate Update

Vislink Technologies has issued a Corporate Update for its shareholders and other stakeholders that includes a review of the second 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 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. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS
(IN THOUSANDS EXCEPT NET (LOSS) INCOME PER SHARE DATA)

  For the Three Months Ended  For the Six Months Ended 
  June 30,  June 30, 
  2019  2018  2019  2018 
Revenue$7,352$9,424$15,558$19,157
Cost of revenue and operating expenses
Cost of components and personnel3,5164,4877,6439,277
Inventory valuation adjustments4212189234
General and administrative expenses5,5506,02810,73311,860
Research and development expenses8662,9251,7925,367
Impairment charge168168
Amortization and depreciation5888181,1771,705
Total cost of revenue and operating expenses10,56214,54721,43428,611
Loss from operations(3,210)(5,123)(5,876)(9,454)
Other income (expense)
Changes in fair value of derivative liabilities7476056731,654
Loss on conversion of debentures(48)(48)
Other income expense3838
Interest expense, net(1,064)(1,903)(1,414)(1,950)
Total other income (expense)(365)(1,260)(789)(258)
Net loss$(3,575)$(6,383)$(6,665)$(9,712)
Basic and diluted loss per share$(1.79)$(3.95)$(3.41)$(6.24)
Weighted average number of shares outstanding:
Basic and diluted2,0021,6151,9541,556
Comprehensive loss:
Net loss$(3,575)$(6,383)$(6,665)$(9,712)
Unrealized gain (loss) on currency translation adjustment34(109)1328
Comprehensive loss$(3,541)$(6,492)$(6,664)$(9,384)

 

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)

 

 June 30, 2019  December 31, 2018 
 (unaudited) 
ASSETS
Current assets
Cash$416$2,005
Accounts receivable, net5,6376,191
Inventories, net12,73713,050
Prepaid expenses and other current assets916780
Total current assets19,70622,026
Right of use assets, operating leases2,427
Property and equipment, net2,0512,096
Intangible assets, net3,8134,691
Total assets$27,997$28,813
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$7,491$7,072
Accrued expenses3,6502,112
Convertible promissory notes, net of discount of $-0- and $16, respectively10400
Operating lease obligations, current1,444
Due to related parties364361
Customer deposits and deferred revenue2,1981,574
Derivative liabilities4451,118
Total current liabilities15,60212,637
Convertible promissory notes, net of discount of $7 and $47, respectively5,8035,886
Operating lease obligations, net of current portion1,038
Total liabilities22,44318,523
Commitments and contingencies (See Note 9)
Stockholders’ equity
Preferred stock – $0.00001 par value per share: 10,000,000 shares authorized as of June 30, 2019 and December 31, 2018; -0- shares issued and outstanding as of June 30, 2019 and December 31, 2018
Common stock – $0.00001 par value per share, 100,000,000 shares authorized, 2,255,728 and 1,877,698 shares issued and 2,255,727 and 1,877,697 shares outstanding as of June 30, 2019 and December 31, 2018, respectively
Additional paid in capital246,490244,562
Accumulated other comprehensive income276275
Treasury stock, at cost – 1 share at June 30, 2019 and December 31, 2018, respectively(22)(22)
Accumulated deficit(241,190)(234,525)
Total stockholders’ equity5,55410,290
Total liabilities and stockholders’ equity$27,997$28,213

 

The accompanying notes are an integral part of these condensed 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.

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

 Stock   Non
 GAAP Option One-Time DiscontinuedGAAP
In thousands of US$ Q2 Expense Expenses Operations Q2
Revenue $7,352130 $7,482
 Gross margin52.2%   53.0%
 
Cost of revenue and operating expenses
 Cost of components and personnel 3,516 3,516
 Inventory valuation adjustments 42 42
 General and administrative expenses5,550 (601)(146)(187) 4,616
 Research and development expenses 866(20) 846
 Amortization and depreciation        588  –  –  –                588
Total cost of revenue and operating expenses 10,562 (601)(166) (187)9,608
 
Income (loss) from operations (3,210)601296187 (2,126)
 
Other income (expense)
 Changes in fair value of derivative liabilities747747
 Loss on conversion of debentures(48)(48)
 Interest expense(1,064) – – (1,064)
Total other income (expense)(365) – –(365)
 
Net income (loss) $(3,575) $601$296 $187 $(2,491)
 
EBITDA$(1,923)                 $601          $296            $187  $(839)

 

 

VISLINK TECHNOLOGIES, INC.

RECONCILIATION OF GAAP to NON-GAAP RESULTS
SIX MONTHS ENDING JUNE 30, 2019

 

 Stock   Non
 GAAP Option One-Time DiscontinuedGAAP
In thousands of US$ H1 Expense Expenses Operations H1
Revenue $15,558221 $15,779
 Gross margin50.9%   51.6%
 
Cost of revenue and operating expenses
 Cost of components and personnel 7,643 7,643
 Inventory valuation adjustments8989
 General and administrative expenses10,733 (1,276)(275)(468) 8,714
 Research and development expenses 1,792(23) 1,769
 Amortization and depreciation            1,177  –  –                    –           1,177
Total cost of revenue and operating expenses 21,434 (1,276)(298) (468) 19,392
 
Income (loss) from operations (5,876) 1,276519 468 (3,613)
 
Other income (expense)
 Changes in fair value of derivative liabilities673673
 Loss on conversion of debentures(48) (48)
 Interest expense (1,415) – – (1,415)
Total other income (expense) (790) – – (790)
 
Net income (loss) $(6,666) $1,276$519 $468 $(4,403)
 
EBITDA$(4,074)              $1,276          $519            $468  $(1,811)

 

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August 14, 2019

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