SENSIO Technologies Inc.
TSX VENTURE : SIO

SENSIO Technologies Inc.

October 16, 2013 16:00 ET

SENSIO Releases its Financial Results for the First Quarter of Fiscal 2013-2014

Increase in revenues and decrease in the loss for the quarter further to the strategic repositioning announced last April

MONTREAL, QUEBEC--(Marketwired - Oct. 16, 2013) - SENSIO Technologies Inc. ("SENSIO" or the "Company") (TSX VENTURE:SIO) today released its financial results for the first quarter of the 2013-2014 fiscal year. The Company's revenues made significant progress in the quarter, reaching $310,479 compared to $76,267 the previous quarter, an increase of $234,212 or 307%. In comparison to the corresponding quarter the previous year, revenues grew by $199,615 or 180%. The increase is primarily due to the first influx of income from the agreement between WiLAN and Panasonic for the licensing of the SENSIO® S2DSwitch. The additional revenue can also largely explain the reduction in the Company's net loss, which amounted to $729,917, a decrease of $246,253 or 25.2% compared to the previous quarter, and $165,331 or 18.5% compared to the first quarter the previous year.

"The first quarter results are encouraging and are an indication of the impact the strategic repositioning plan will have on our financial performance in the mid-term," reported Nicholas Routhier, President and CEO. "The receipt of the first income from the agreement between WiLAN and Panasonic is encouraging and a good sign for our future revenue growth. In the coming quarters, we will continue with our cost-cutting plan, and the impact will begin to be felt as early as the next quarter. Although we still face challenges in terms of the regular progression of our revenues, we should be able to reduce our losses and gradually move toward profitability. With the recent closing of our financing, we have the financial resources we need to pursue our development plan and demonstrate our capacity to generate income. We will soon be entering the year's strongest season in terms of electronics sales and movie rentals on 3DGO!™ and we are looking forward to this period with enthusiasm."

Highlights of the first quarter ended August 31, 2013

  • Panasonic signs an agreement to make 3DGO!™ accessible on its 3DTVs in the U.S.;
  • First revenues come in from the WiLAN agreement further to Panasonic's purchase of a licence for the SENSIO® S2DSwitch;
  • Revenues of $310,479 are posted in the first quarter of the year compared to $110,864 in the first quarter a year earlier; and
  • Quarter's loss reduced by 18.5% compared to the corresponding period last year.

Consumer Electronics Market: Strong Contribution by the SENSIO® S2DSwitch

In the first quarter of fiscal 2014, the Company posted $302,010 in licence revenues compared to $110,864 in the quarter ended August 31, 2012. The $191,146 increase is largely due to royalties from the agreement signed between WiLAN and Panasonic for the patents associated with the SENSIO® S2DSwitch. An increase in recurring royalty revenues received for the SENSIO® Hi-Fi 3D technology also contributed to the increase.

"In recent years, the SENSIO® S2DSwitch licensing program has contributed significantly to the Company's revenues and that was true again in the last quarter," said Routhier. "While we did expect to reduce our costs related to this program by signing the licence agreement with WiLAN, the initial income was expected to come in much later, and we are very pleased at this quick development. In the coming quarters, we foresee a progression in the licensing program for the SENSIO® Hi-Fi 3D technology which will be stimulated by the deployment of 3DGO!™ on new units and by the growth in sales of 3DTVs worldwide. We are satisfied with our progression in this important market and believe we have built a solid base to ensure our growth in the mid- to long-term."

Content Rentals: Introduction of 3DGO!™ Into the Market

The 3DGO!™ video-on-demand platform was launched in June and gradually became available to owners of Vizio 3DTVs during the quarter. It generated $8,469 of revenue in the period ended August 31, 2013. As at that date, 3,089 users had subscribed to the service, with 894 active users having rented 1,333 paid titles during the quarter.

"3DGO!™ is still in its infancy in the market, and we are pleased with and proud of its launch, which went off successfully in the first quarter of the year," commented Routhier. "Our goal in these first months of operation was to make sure the platform worked properly and that the first users to sign up for the service were satisfied. During this breaking-in period, we made a few corrections and minor adjustments, but there were no big problems or major outages. Meanwhile, 3DGO!™ received many favourable reviews and good media coverage, and even won a New Product Award from the International 3D & Advanced Imaging Society. Since the launch of 3DGO!™, the number of users and rentals has been rising steadily. Now that the breaking-in phase is over, we will focus our efforts on expanding the library of 3D titles, the deployment on new products, and increasing the number of users and rentals."

Summary of Financial Results

SENSIO posted revenues of $310,479 for the quarter ended August 31, 2013 compared to $110,864 as at August 31, 2012, an increase of $199,615 or 180.1%. This positive variance can largely be explained by the income generated from the agreement signed between WiLAN and Panasonic for the patents associated with the SENSIO® S2DSwitch, along with an increase in recurring royalty revenues from the SENSIO® Hi-Fi 3D technology. The launch of the 3DGO!™ video-on-demand platform also contributed, by generating its first income in the period ended August 31, 2013. During the same period, SENSIO earned a gross profit of $300,182, or 96.7% of its revenues, compared to $107,970, or 97.4% of its revenues, in the comparative quarter.

The Company also slightly reduced its operating expenses. Selling costs totalled $480,040 compared to $500,742 in the corresponding quarter the previous year, a decrease of $20,702 or 4.1%. A lower payroll offset by higher costs for the launch of 3DGO!™ in the three-month period ended August 31, 2013 explain the variance. Research and development expenses totalled $156,857 compared to $179,545 in the first quarter the previous year, a decrease of $22,688 or 12.6%. The decrease is essentially attributable to the subsidy obtained from the National Research Council of Canada under the Industrial Research Assistance Program. As for the administrative expenses, they amounted to $328,529 for the quarter ended August 31, 2013 compared to $324,693 for the first quarter the previous year, an increase of $3,836 or 1.2%.

SENSIO's net loss for the quarter ended August 31, share, compared to $895,248, or $0.02 per share, as 2013 amounted to $729,917, or $0.01 per at August 31, 2012.

Selected Financial information
Fiscal
year 2014
Fiscal year 2013 Fiscal year 2012
T1 T4 T3 T2 T1 T4 T3 T2
Revenues 310,479 $ 76,267 $ 112,792 $ 92,433 $ 110,864 $ 90,651 $ 679,913 $ 109,702 $
Gross profit 300,182 $ 27,469 $ 110,740 $ 88,726 $ 107,970 $ 30,832 $ 676,404 $ 105,479 $
Net loss (729,917 ) $ (976,170 ) $ (980,761 ) $ (1,010,819 ) $ (895,248 ) $ (1,322,159 ) $ (870,844 ) $ (1,182,931 ) $
Basic and diluted loss per share (0.01 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.02 ) $ (0.03 ) $ (0.02 ) $ (0.02 ) $
Basic and diluted weighted average number of shares 63,019,342 63,019,342 63,019,342 60,696,110 52,512,544 52,487,797 52,487,797 52,487,797

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

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.

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 first quarter ended August 31, 2013. We disclaim any intention and assume no obligation to update or revise any forward- looking statements.

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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