SENSIO Technologies Inc.
TSX VENTURE : SIO

SENSIO Technologies Inc.

January 23, 2015 08:00 ET

SENSIO Presents its 2014-2015 Second Quarter Financial Results

Company's patent licensing activities enable profit for the first six months of its fiscal year

MONTREAL, QUEBEC--(Marketwired - Jan. 23, 2015) - SENSIO Technologies Inc. ("SENSIO" or the "Company") (TSX VENTURE:SIO) today released its financial results for the second quarter of the 2014-2015 fiscal year. For this quarter, the Company posted revenues of $880,821, an improvement of 580.1% over the corresponding quarter of the previous year. After two quarters, the Company's revenues amounted to $1,201,289 compared to $440,001 for the comparative period of the 2013-2014 fiscal year. Meanwhile, the second-quarter operating expenses (excluding cost of goods) amounted to $640,813, a decrease of $278 341 or 30.3% compared to the corresponding quarter of the previous year. With the combination of higher revenues and lower operating expenses, the Company was able to post earnings of $213,580 in the second quarter, for a total of $13,579 in the first half of the fiscal year.

"After the first six months of the year, we can be very satisfied with the progress made and the results posted," commented Nicholas Routhier, the Company's President and CEO. "Due to tight cost-control, a new patent licencing program, and the agreement that was reached with Wi-LAN during the second quarter, we have had the first profitable semester in our history, an achievement we can be proud of. In the remainder of the year, we will be counting on 3DGO!™ as our main source of revenues and all of our internal efforts are already geared towards reaching our goal of generating 50,000 active users. With the recent launch of 3DGO!™ on LG's 3DTVs, the upcoming Canadian launch of the service, and the many marketing initiatives that will soon be deployed, we are putting everything in place to help us reach this goal and get us closer to the Company generating steady profitability."

Highlights of the second quarter ended November 30, 2014

  • Renewal of the U.S. distribution deal with Universal and signature of a new agreement for Canada;
  • New multi-year licensing partnership with WiLAN, which includes the temporal interpolation program;
  • Second-quarter net earnings of $213,580 and six-month net earnings of $13,579;
  • Quarterly revenues increased by 175% compared to the previous quarter and 580% compared to the corresponding quarter of the previous year;
  • Operating expenses reduced by 48.3% for the quarter and by 48.2% for the semester when compared to the corresponding periods of the previous year.

Consumer electronics market - Important increase in revenues

In the second quarter of fiscal 2015, the Corporation posted revenues of $867,442 compared to $111,294 last year, an increase of $756,148. The rise is mainly explainable by an increase of revenues coming from patent licensing activities. 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.

"As planned, our patent licensing activities contributed significantly to the Company's revenues and profit margin in the year's second quarter," said Routhier. "The new deal with Wi-LAN now includes both of our patent licensing programs, namely the SENSIO®S2D Switch and temporal interpolation. Before we see any significant new revenues from this latest agreement we will have to be patient, given the normal time frames inherent in the negotiation of patent licensing deals with the manufacturers. Licensing activities in the consumer electronics market will nevertheless continue contributing to the Company's profit margin in the coming quarters, but our focus will now be directed to 3DGO!™ in order to increase the Company's revenues."

3DGO! - More users despite low Vizio's 3DTV sales

During the quarter, the number of registered 3DGO! ™ users rose from 20,420 to 21,634 an increase of 1,214 users. This more modest growth in number of users is attributable to the net decrease of Vizio's 3DTV sales which historically were the main source of new users. The 3DGO!™ video-on-demand service generated $13,379 for revenues of $31,163 for the first six months of fiscal year 2014-2015 compared to $26,697 for the first six months of the previous year.

"In view of Panasonic's weak sales of 3DTVs and the phasing out of 3DTV sales by Vizio in the U.S., the slower growth in the number of new users in the second quarter was foreseen and is consistent with our expectations," explained Routhier. "However, this does not impact the achievement of our goal of 50,000 active users by the end of the fiscal year. Indeed, our growth plan has always been based on the addition of new users originating from buyers of LG's 3DTVs, the upcoming launch in Canada and the numerous marketing initiatives currently being developed for 3DGO! ™ with an impact originally anticipated as of the third quarter. It is worth repeating that with a total estimated 4.7M 3DTVs compatible with 3DGO!™ in the U.S., we believe that we have only brushed the surface of our potential market. Because of the slightly delayed launch of 3DGO! ™ on LG's 3DTVs we had to defer a number of marketing initiatives, but we are confident that we can catch up in the remaining months and that we will see strong growth in the number of users. We are optimistic about the coming quarters."

Summary of financial results

In the second quarter of fiscal 2015, the Corporation posted revenues of $880,821 compared to $129,522 last year, an increase of $751,299. The rise of licences revenues is explainable by an increase of revenues coming from patent licensing activities. 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 which impacted 3DGO! ™ sales.

During the same period, the cost of sales amounted to $22,069 in comparison to $362,845 for the compared quarter one year ago. This decrease of $340,776 is mainly attributable to the decrease of the royalty impairment expense. For the quarter, this expense amounted to $5,128 compared to $345,397 for the comparative quarter one year ago.

As for selling expenses, they totalled $300,922 compared to $412,618 in the corresponding quarter the previous year, a decrease of $111,696. The variation is mainly explainable by a decrease in salaries, operating costs for the 3DGO!™ service and fees paid to consultants.

The research and development expenses amounted to $125,360 compared to $181,963 during the second quarter of the previous year, a decrease of $56,603. The decrease is explainable by a lower payroll net of R&D tax credit and grants related to the Corporation's research and development projects despite the decrease of such R&D tax credit and grants.

Finally, the administrative expenses amounted to $214,531 compared to $324,573 for the comparative quarter of the previous year, a decrease of $110,042. This decrease is mainly explainable by a reduction in salaries, professional fees, fees paid to directors and depreciation of assets expense.

SENSIO's net earnings for the quarter ended November 30, 2014, amounted to $213,580 ($0.00 per share) compared to a net loss of $1,163,646 ($0.02 per share) as at November 30, 2013, which represents a difference of $1,377,226.

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 November 30, 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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