SENSIO Technologies Inc.
TSX VENTURE : SIO

SENSIO Technologies Inc.

October 28, 2014 06:30 ET

SENSIO Announces Higher Revenues and Lower Loss for First Quarter

Company also announces grant of options to management and employees

MONTREAL, QUEBEC--(Marketwired - Oct. 28, 2014) - SENSIO Technologies Inc. ("SENSIO" or the "Company") (TSX VENTURE:SIO) today reported its financial results for the first quarter of the 2014-2015 fiscal year. During this period, the Company's revenues amounted to $320,468, a progression of $211,600 or 195% versus the previous quarter (Q4 2013-2014) and an improvement of 3.2% compared to the corresponding quarter of the previous year. Meanwhile, operating expenses amounted to $491,548 in the first quarter, a decrease of $338,642 or 40.8% versus the previous quarter and of $473,878 or 49.1% compared to the corresponding quarter of the previous year. Finally, the Company incurred no expenses for royalty advances impairment, which represents a decrease of $1.65M compared to the previous quarter and is identical to the corresponding quarter of the previous year. With the combination of higher revenues, lower operating expenses and no expenses incurred for royalty advances impairment, the Company was able to significantly improve its quarterly loss, which amounted to $200,001, a decrease of $2.2M versus the previous quarter and of $529,916 compared to the first quarter of fiscal 2013-2014.

"We are very satisfied with the first quarter results, which are in line with our strategic plan and demonstrate the extent of efforts made by SENSIO's management and employees to bring the Company closer to profitability " commented Nicholas Routhier, President and CEO. "Our patent and technology licensing activities have continued to provide an interesting revenue base, allowing us to focus our efforts on the development, marketing and sale of 3DGO! ™ in expectation of its U.S. launch on LG's 3DTVs by the end of the second quarter. Now that our cost-cutting program has been successfully implemented, we can devote all our efforts to revenue growth by creating new patent licensing programs and increasing the number of active 3DGO! ™ users, and consequently the number of rentals."

Highlights of the first quarter ended August 31, 2014

  • Signature of an agreement with LG for the international deployment of 3DGO!™ on connected TVs equipped with CINEMA 3D technology;
  • Signature of an agreement between WiLAN and Sony for the SENSIO® S2D Switch;
  • Issuance of a U.S. patent relating to temporal interpolation for 3DTVs, in addition to the Japanese and Chinese patents already granted;
  • Quarterly revenues increased by 195% compared to the previous quarter and 3.2% compared to the corresponding quarter of the previous year, notably due to 3DGO!™ and the SENSIO® S2DSwitch program;
  • Operating expenses reduced by 49.1% compared to the corresponding quarter of the previous year;
  • Quarterly loss reduced by 72.6% compared to the first quarter of the previous year.

Consumer electronics market - Revenues stable year to year

In the first quarter of fiscal 2015, the Company posted licence revenues of $302,684 from the consumer electronics market, which is comparable to the quarter ended August 31, 2013 when the Company posted revenues of $302,010. This however represents a significant increase of $223,455 or 282% compared to revenues posted in the previous quarter, which amounted to $79,229. The higher revenues from the SENSIO®S2DSwitch program, due namely to recurring revenues from Panasonic and the recognition during the quarter of revenues from the agreement between Sony and Wi-Lan, offset the decrease in technology revenues resulting from the gradual decrease of 3DTV sales by Vizio which was expected.

"Our patent licensing activities continued to be an important source of revenue for SENSIO during the last quarter and we expect that these activities will continue to make a very positive contribution to our profit margin in the coming quarters," said Routhier. "This is an essential revenue base for SENSIO on which we can depend while we invest in the growth and expansion of 3DGO! ™ in North America and internationally. With the issuance of our most recent U.S. patent, the development of our new temporal interpolation program has become one of our top priority. Accordingly we are satisfied with our progress in the consumer electronics market."

3DGO! - Continued increase in the number of users

In the first quarter, revenues from movie rentals amounted to $17,784 compared to $8,469 in last year's first quarter, an increase of 110%. Meanwhile, the number of registered 3DGO! ™ users rose from 18,231 to 20,420, an increase of 2,189 or 12.0% in one quarter. Growth in the number of users and movie rentals is seasonal and is also influenced by sales of 3DTVs in the marketplace. Since the end of the quarter, SENSIO has renewed its agreement with « Universal Pictures Home Entertainment» to distribute movies on 3DGO! ™ in the U.S. and has also signed a new agreement to distribute some of their titles in Canada in preparation for the upcoming international expansion of 3DGO! ™.

"Our marketing strategy so far having been based primarily on the visibility of our application to new 3DTV buyers, the growth in the number of users has been strongly correlated to sales of new 3DTVs in the marketplace," explained Routhier. "Slow sales of 3DTVs by Panasonic during the quarter and the gradual decrease in 3DTV sales by Vizio had an impact on the progression of the number of users and, under these circumstances, we are satisfied with the growth we have seen. In the coming quarters we will work on a new recruiting program to reach earlier buyers of 3DTVs from Vizio, Panasonic and LG in the U.S. and stimulate content rentals. With an estimated total of 4.3M 3DTVs compatible with 3DGO!™ in the U.S., we consider that we have only scratched the surface of our potential market. We are confident that we will see a significant increase in the number of users and rentals starting in the third quarter, concurrently with the deployment on LG's 3DTVs, the favourable seasonality and our new targeted marketing efforts."

Grant of options to management and employees

The members of the Board of Directors of the Company approved, effective on October 24, 2014, the grant of a total of 165,000 options to management and employees of which 90,000 are for management. These stock options entitle them to purchase that same number of shares at the price of $0.245 per share, representing the closing price of the stock on October 23, 2014. The options will be fully vested in three years and will expire on October 24, 2019.

Summary of financial results

For the quarter ended on August 31 2014, the Corporation posted revenues of $320,468 compared to $310,479 last year, an increase of $9,989 or 3.2%. The increase of licences revenues is explainable by an increase of revenues coming from SENSIO® S2D Switch. This increase compensated the decrease of revenues coming from the SENSIO® Hi-Fi 3D technology resulting from the expected decrease of Vizio's 3DTV sales. Meanwhile, the 3DGO!™ video-on-demand platform generated $17,784 during the quarter compared to $8,469 last year which represents an increase of $9,315.

For the three months period ending August 31, 2014, the cost of sales of the Company amounted to $14,585 in comparison to $10,297 for the compared quarter one year ago. This increase of $4,288 or 41.6% is mainly attributable to the 110% increase of revenues generated by the 3DGO!™ platform.

As for selling expenses, they totalled $218,912 compared to $480,040 in the corresponding quarter the previous year, a decrease of $261,128 or 54.4%. The decrease is mainly explainable by a significant decrease in salaries, fees paid to consultants and travelling fees.

The research and development expenses amounted to $108,582 compared to $156,857 in the first quarter of the previous year, a decrease of $48,275 or 30.8%. The decrease is explainable by a significant decrease in payroll net of R&D tax credit and grants related to the Corporation's research and development projects.

Finally, the administrative expenses amounted to $164,054 compared to $328,529 for the comparative quarter of the previous year, a decrease of $164,475 or 50.1%. This decrease is mainly explainable by a significant reduction in salaries, professional fees, fees paid to directors and depreciation of assets expense.

SENSIO's net loss for the quarter ended August 31, 2014, amounted to $200,001 ($0.002 per share) compared to $729,917 ($0.01 per share) as at August 31, 2013, which represents a decrease of $529,916 or 72.6%.

For more details, please see the Management Discussion and Analysis and the Financial Statements for the reference period on the SENSIO Website: www.sensio.tv

About SENSIO Technologies Inc. (SENSIO):

Founded in 1999, SENSIO Technologies Inc. (www.sensio.tv) is a pioneer in the 3D industry. Its vision, expertise and state-of-the-art solutions, based on diversified stereoscopic image-processing technologies, have been trusted by some of the biggest names in the broadcasting and consumer electronics sectors, as well as for live 3D events in cinemas, to power numerous industry firsts, initiate new business models and generate immediate revenue with a distinctive 3D offering.

SENSIO enables its clients to deliver the best possible 3D experience for the end-user through a broad portfolio of licensed products, based on quality, content, usability and compatibility. These include its flagship, award-winning technology, SENSIO® Hi-Fi 3D, the premium-quality frame-compatible format.

SENSIO's technologies are the object of patents and intellectual property protection proceedings worldwide. SENSIO is listed on the Toronto TSX Venture Exchange (SIO).

Caution Concerning Forward-Looking Statements

Certain statements made in this press release that are not historical facts are forward-looking statements and are subject to important risks, uncertainties and assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward looking statements. For more exhaustive information on these risks and uncertainties, the reader should refer to the risk factors described in the management's discussion and analysis of SENSIO for the quarter ended August 31, 2014. The forward-looking statements contained in this press release represent our expectations as of the date hereof. We disclaim any intention and assume no obligation to update or revise any forward-looking statements. Forward-looking statements are presented for the purpose of providing information about management's current expectations and plans and allowing investors and others to obtain a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SENSIO® is a registered trademark of SENSIO Technologies Inc.

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