SENSIO Technologies Inc.

SENSIO Technologies Inc.

September 22, 2010 08:00 ET

SENSIO Presents its Results for the 2009-2010 Financial Year, Indicating an Increase in Sales and a Strong Position for the Coming Year

MONTREAL, QUEBEC--(Marketwire - Sept. 22, 2010) - SENSIO Technologies Inc. (SENSIO) (TSX VENTURE:SIO), inventor of SENSIO® 3D technology, presented its financial results for the fiscal year ended May 31, 2010. During this fiscal year, SENSIO has made major inroads in critical sectors of the 3D industry, facilitating the establishment of the 3D-at-home.

"Enabling this ecosystem is the key to our differentiation in the marketplace and ultimately to the commercial success of SENSIO® 3D technology. The 3D ecosystem comprises manufacturing of Consumer Electronics, chip-manufacturing for consumer products, and content creation, including broadcast equipment manufacturing and gaming. A strong presence is required in all sectors to mobilize the delivery of 3D to the home. SENSIO has achieved good penetration across the board in this last year, and we now hold a solid position as a key player and shaper in an industry that is still defining itself. Our recent financing has fuelled our momentum and given us the financial means necessary to achieve our main objective of making SENSIO® 3D the leading stereoscopic format in the marketplace," says Nicholas Routhier, President and CEO.

Building a solid position

  • Signature of a contract to integrate the SENSIO® 3D decoding format into the 3D televisions of Vizio Inc., America's #1 LCD HDTV vendor
  • Signature of an agreement for the integration of SENSIO® 3D decoding format into the new generation of 3D multimedia processors from Sigma Design
  • Ubisoft® launched Avatar: The Game in SENSIO format for PlayStation®3 and Xbox® 360
  • Cooperation with several partners such as Miranda, Grass Valley and Teranex to ensure delivery of the SENSIO® 3D format end to end in the broadcast supply chain
  • Use of SENSIO® 3D technology was announced for direct broadcast of the Soccer World Cup in live 3D
  • The SENSIO® 3D Decoder Core was used by ESPN to provide direct live 3D broadcast of an NCAA football game
  • More than 700 cinemas equipped with SENSIO® 3D decoding technology at the date of this report
  • SENSIO raised $13,946,945 from a bought deal offering and issue of shares and warrants throughout the year
  • Sales increased by 32.1% for fiscal year 2010 over previous year
  • Appointment of Patrick Whittingham, former president of Sony Electronics (USA) Broadcast and Production Systems Division, to the SENSIO Board of Directors

Live 3D – from proof-of-concept to viable business model

At the end of the 2009 fiscal year, only two live 3D events had been produced and screened in 85 movie theatres in the USA only. Over the 12 months from June 2009 to May 2010, SENSIO worked hard to transform what was little more than a commercial proof-of-concept into a viable business model. Providing the technology for such high-profile events as the French Open men's final at Roland Garros, the NCAA football championship game and the RBS 6 Nations rugby, SENSIO's finest hour so far was its participation in the successful broadcasting of the 2010 FIFA World Cup.

"The SENSIO 3D Live Global Network™ is a ready-to-go live-3D distribution channel for the industry," says Routhier. "By the end of the fiscal year, we had already exceeded the threshold of 500 screens that event-producers deemed their break-even point – incidentally, following the same growth curve as digital cinema – and we have since expanded our network to 700 screens in 33 countries. With more high-profile worldwide sporting events coming up in the next year, and 3D taking hold in the broadcasting industry as evidenced at the recent IBC show, we are confident that the network will continue to grow, and live 3D will contribute to our financial success in the coming year."

Major breakthroughs in Consumer Electronics

In the previous fiscal year, the industry was envisaging 3D. After the Consumer Electronics Show (CES) in January 2010, there was no doubt that 3D had arrived. On the technical side, the Blu-ray Disc Association brought out a 3D specification, and HDMI 1.4 was updated to 1.4a to include 3D. Spatial compression, the family of 3D codecs to which SENSIO® 3D belongs, became the dominant technology, as it allows 3D content to be distributed over the existing 2D infrastructure. As for content, BSkyB in the UK announced the launch of the first 3D TV channel, followed by ESPN in the US. Finally, a number of 3DTVs hit the market.

SENSIO has made major breakthroughs in the Consumer Electronics market over the last year. In the content arena, SENSIO was able to successfully position itself in the gaming sector, collaborating with top games publisher Ubisoft to secure another pioneering moment – this time for the first stereoscopic 3D console game, James Cameron's Avatar. Further down the supply chain, SENSIO signed agreements with manufacturers of chips for consumer electronics products, setting in motion a strategy of building incumbency in this area. Finally, SENSIO® 3D technology was selected by Vizio, America's no. 1 LCD HDTV vendor, as the premium-quality 3D format to differentiate its 3DTV line.

"The mass availability and value-for-money price point of Vizio's products is significant for SENSIO's positioning in the market," specifies Routhier. "In addition, the decision to separate out the S2D Switch from the SENSIO® 3D encoding and decoding technology will enable us to increase our revenue potential as well as our penetration. At the current time, the structure is in place and the sales process is under way. From this strong base, SENSIO aims to continue to enhance the value of our technologies and build our brand in the consumer electronics sector in the years ahead."

The SENSIO® S2D Switch enables consumers to view 3D material in 2D at the touch of a button, giving them flexibility and maximum accessibility to content.

Capital injections totalling $13,946,945

SENSIO raised funding of $13,946,945 following a bought deal offering and issue of shares and warrants throughout the year. This reinforcement of SENSIO's financial position endows the company with the flexibility to meet its objectives and seize opportunities as the market evolves.

Summary of financial results

SENSIO's revenues for the fiscal year ended May 31, 2010 were $693,368 compared to $524,744 in 2009, an increase of $168,624 or 32.1%. The revenues generated during the fiscal year came principally from live 3D event licensing.

Variations in Operating Expenses

Sales and marketing expenses increased during the fiscal year ended May 31, 2010 compared to the previous fiscal year, from $1,129,235 to $1,834,632. This increase of 62.5% can be explained mainly by the addition of personnel to support marketing initiatives, the hiring of external consultants specializing in business development, and the increase in representations undertaken by SENSIO in Asia, Europe and the United States, as well as SENSIO's participation in the major industry shows, NAB for the Professional and Broadcasting sector, and CES for Consumer Electronics.

During the 2010 fiscal year, research and development expenses were $516,119 compared to $384,080 in 2009. This increase of 34.4% can be explained by the addition of human resources and an increase in expenses for new product development.

Administrative expenses were $1,279,443 for the fiscal year ended May 31, 2010 compared to $998,098 for the previous fiscal year, an increase of 28.2%. This increase can be explained mainly by the recruitment of additional human resources (recruitment costs, increase in payroll, and increase in associated overheads) and also costs related to the financing raised in December 2009.

Principal Financial Information  
  Years ended   Quarters ended  
  May 31   May 31  
  audited   unaudited  
  2010   2009   2010   2009  
Statement of results                
Sales 693 368   524 744   274 942   247 193  
Gross profit 535 967   393 047   258 402   151 794  
Net loss and fully-diluted results 3 174 454   2 264 222   852 100   562 344  
Net loss per common share (0,0670 ) (0,0633 ) (0,0165 ) (0,0166 )
Balance sheet                
Cash, cash equivalents and term deposit 10 569 648   852 015   10 569 648   852 015  
Total assets 11 931 358   2 075 054   11 931 358   2 075 054  
Long-term debt including short-term portion 126 900   291 018   126 900   291 018  
Total liabilities 661 534   891 172   661 534   891 172  
Shareholders' equity 11 269 824   1 183 882   11 269 824   1 183 882  

About SENSIO Technologies Inc. (SENSIO):

SENSIO Technologies Inc. (TSX.V: SIO) — With its significant expertise in the field of 3D video, SENSIO develops and markets stereoscopic 3D digital compression, decompression, and display- formatting technologies. Its solutions are deployed on a global scale by content creators, games developers, broadcasters, specialty channels, and digital cinemas, allowing customers to generate substantial additional value-added revenue streams.

Its flagship technology, SENSIO® 3D, allows the high-quality distribution of 3D content through conventional 2D broadcast networks (cable, satellite, IP) and playback on any 3D display device, as well as home theatre and digital cinema projectors. This technology and the SENSIO 3D Live Global Network™ of over 700 cinemas in 33 countries have allowed SENSIO to make its mark by enabling broadcast of high-profile live 3D events in cinemas worldwide. SENSIO is listed on the Toronto TSX Venture Exchange. For more information, please visit We.Deliver.3D.Today.

SENSIO® is a registered trademark of SENSIO Technologies Inc.

'We.Deliver.3D.Today.' and 'SENSIO 3D Live Global Network' are trademarks of SENSIO Technologies Inc.

This news release contains forward-looking statements that reflect the company's expectations with regard to future events. Actual events could differ significantly from those anticipated in this document.

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.

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