RNS Number : 4561D
Visual Defence Inc.
15 September 2008
Visual Defence Inc
("Visual Defence", the "Company" or the "Group")
Interim Results for Six Months Ended 30 June 2008
RICHMOND HILL, ONTARIO - September 15, 2008 - Visual Defence, the security convergence company, today announces its interim results for
the six months ended 30 June 2008. All Dollar amounts are in Canadian Dollars.
Financial Highlights
* Revenues declined by 16 per cent. against the comparative period last year to $8.5 million (six months 30 June 2007: $10.2
million).
* Gross Profit increased by $0.2 Million against the comparative period to $3.4 million as gross margins increased to 40.2% (six
months 30 June 2007: $3.2 million and 31.7%)
* Net loss was reduced by $1.3 million against the comparative period to $2.5 million (six months 30 June 2007: $3.8 million)
Operating Highlights
* Significant contract wins included:
* The Norwegian State Railway to supply advanced mobile digital video storage solutions ($1.5M CAD)
* The Societe de Transport de Montreal to provide Video Analytics integration ($0.9M CAD)
* Euromaint of Stockholm to provide advanced mobile digital video recording storage and management solutions ($1.9M CAD)
* Zurich Airport ($0.13 M CAD) to add to our existing applications a map based Command and Control Centre (3C) solution
* Commencement of collection and ramp up of operations in Cote D'Ivore of our 50% owned subsidiary Avisecure
* Development of partnership and representation agreement with Taldor of Israel and associated closure of our Israel office
Barry Tal, CEO for Visual Defence, Inc. said:
"The results for the first 6 months of the year, while below our expectations, do demonstrate the effects of our cost cutting measures
reflected in our improved gross profit and reduced operating loss versus the comparable period of 2007. Continued development of our sales
channels is underway and expected to yield benefits in 2009 and beyond. Recently the Company was awarded the contract to provide Command and
Control applications to Zurich airport. This win represents the continuing development of our presence in the control centre market. In
addition, I am pleased with the progress of our subsidiary operation in Cote D'Ivoire where the company will deploy its newly developed Door
Management System as part of our comprehensive 25 year BOT airport security management program.
"As announced earlier this year, for the remainder of 2008 the Company will be impacted by decisions by key customers to delay the
delivery and implementation of projects and solutions from 2008 to 2009. These delays will impact the full year results for 2008 and as a
result the Company expects full year (to 31 December 2008) revenue at $20 million CAD, with Operating Earnings below the Board's previous
expectations. With the encouragement of the Board, the Company is engaging in appropriate cost reduction and mitigation activities
throughout its operations. As a result of these measures and the Company's continued investment in new technologies and its sales
infrastructure I am confident that the Company is well positioned for future growth and success."
Enquiries:
Visual Defence Inc +(1) 905 731 1254
Barry (Oved) Tal, Chairman and Chief Executive Officer
Bill Watson, Chief Financial Officer
KBC Peel Hunt Ltd (Nominated Adviser and Broker) +44 (0) 20 7418 8900
David Anderson
Oliver Stratton
About Visual Defence
Visual Defence prides itself on mastering the "Art of Integration" and providing customized solutions. The Company provides advanced
security solutions for leading government, airport, mass transit and commercial clients around the world. Leveraging 3C�, its proven
Security Management Software Platform, and suite of modular Integration, Video, VoIP Communication, and Situational Awareness applications,
Visual Defence delivers solutions that meet exact business objectives. Visual Defence turns functionality and interoperability requirements
into intelligent, scalable and easy-to-manage solutions that provide end-users with the security insight they need to improve operations and
effectively prevent and mitigate risk. Additional information about Visual Defence is available at: http://www.visualdefence.com
Visual Defence Inc.
Condensed Consolidated Balance Sheets
Canadian dollars in thousands
30 June 30 June
31 December
2008 2007
2007
ASSETS (Unaudited) (Unaudited)
(Audited)
CURRENT ASSETS:
Cash and cash equivalents $1,261 $3,478
$5,274
Available for sale securities 7,103 8,560
7,592
Trade receivables 7,928 8,763
9,564
Other accounts receivable and 1,532 659
813
prepaid expenses
Inventories 1,291 1,402
1,149
19,115 22,862
24,392
NON-CURRENT ASSETS:
Restricted cash 2,370 2,423
2,325
Property and equipment 1,224 1,559
1,355
Other intangible assets 2,788 3,151
2,821
Goodwill 7,835 7,835
7,835
14,217 14,968
14,336
Total assets $33,332 $37,830
$38,728
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $1,194 $2,645
$3,589
Other accounts payable and 1,730 2,007
2,425
accrued expenses
2,924 4,652
6,014
EQUITY:
Share capital - -
-
Additional paid-in capital 51,766 51,325
51,609
Foreign currency translation (427) 345
(462)
adjustments
Accumulated deficit (20,931) (18,492)
(18,433)
30,408 33,178
32,714
Total liabilities and equity $33,332 $37,830
$38,728
The accompanying notes are an integral part of the condensed consolidated financial statements.
The financial statements were approved and authorized for issue by Board of directors on 10 September 2008 and were signed on its behalf
by:
Bill Watson Barry (Oved) Tal
Chief Financial Officer Chief Executive Officer and Chairman of the Board of Directors
Visual Defence Inc.
Condensed Consolidated Statements of Income (Loss)
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June Year ended 31
December
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
Revenues $8,530 $10,195 $28,368
Cost of revenues 5,098 6,955 18,966
Gross profit 3,432 3,240 9,402
Operating expenses:
Research and development 977 1,208 2,227
Selling and marketing 2,307 2,518 5,442
General and administrative 2,907 2,526 5,285
Totaloperating expenses 6,191 6,252 12,954
Operating (Loss) (2,759) (3,012) (3,552)
Interest Income 184 311 562
Financial expenses (26) 16 (39)
Foreign exchange gain (loss) 103 (1,076) (673)
Net (loss) ($2,498) ($3,761) ($3,702)
Basic and diluted (loss) per ($0.04) ($0.05) ($0.05)
share
The accompanying notes are an integral part of the condensed consolidated financial statements.
Visual Defence Inc.
Condensed Consolidated Statements of Changes in Equity
Canadian dollars in thousands (except share data)
Common shares Additional paid-in Foreign currency Retained
earnings Total equity
capital translation
(accumulated
adjustments
deficit)
Number of shares Share capital
Balance as of 31 December 2006 70,556,095 $- $50,886 ($42)
($14,731) $36,113
(Audited)
Net profit (loss) - - - -
(3,761) (3,761)
Foreign currency translation - - - 387
- 387
adjustments
Total recognized profit (loss) 387
(3,761) (3,374)
for the period
Issuance of Common shares upon 90,000 - 1 -
- 1
exercise of share options
Share-based compensation - - 438 -
- 438
Balance as of 30 June 2007 70,646,095 - 51,325 345
(18,492) 33,178
(Unaudited)
Net profit (loss) - - - -
59 59
Foreign currency translation - - - (807)
- (807)
adjustments
Total recognized profit (loss) (807)
59 (748)
for the period
Issuance of Common shares upon - - - -
- -
exercise of share options
Share-based compensation - - 284 -
- 284
Balance as of 31 December 2007 70,646,095 - 51,609 (462)
(18,433) 32,714
(Audited)
Net profit (loss) - - - -
(2,498) (2,498)
Foreign currency translation - - - 35
- 35
adjustments
Total recognized profit (loss) 35
(2,498) (2,463)
for the period
Issuance of Common shares upon - - - -
- -
exercise of share options-
Share-based compensation - - 157 -
- 157
Balance as of 30 June 2008 70,646,095 $- $51,766 ($427)
($20,931) $30,408
(Unaudited)
The accompanying notes are an integral part of thecondensedconsolidated financial statements.
Visual Defence Inc.
Condensed Consolidated Statements of Cash Flows
Canadian dollars in thousands
Six months ended Year ended 31
30 June December
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
Cash flows from operating
activities:
Net (loss) ($2,498) ($3,761) ($3,702)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 592 579 1,155
Share-based compensation 157 438 722
expenses
Decrease in accounts 1,636 3,737 2,936
receivable
Decrease (increase) in other (719) 96 (58)
accounts receivable and
prepaid expenses
Decrease (increase) in (142) 96 349
inventories
(Decrease) increase in trade (2,395) (943) 1
payables
(Decrease) increase in other (695) (254) 164
accounts payable and accrued
expenses
Net cash provided by (used in) (4,064) (12) 1,567
operating activities
Cash flows from investing
activities:
Purchase of property and (150) (604) (659)
equipment
Proceeds from disposal of 30 39 16
property and equipment
Development of intangible (254) - -
property
Increase in restricted cash (45) (2,423) (1,575)
Proceeds from available for 489 4,941 5,909
sale securities
Net cash provided by investing 70 1,953 3,691
activities
Cash flows from financing
activities:
Proceeds from issuance of - - 1
Common shares upon exercise of
options
Net cash provided by financing - - 1
activities
Effect of exchange rate (19) 388 (384)
differences on cash and cash
equivalents
(Decrease) Increase in cash (4,013) 2,329 4,875
and cash equivalents
Cash and cash equivalents at 5,274 1,149 399
the beginning of the period
Cash and cash equivalents at $1,261 $3,478 $5,274
the end of the period
The accompanying notes are an integral part of the condensed consolidated financial statements.
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 1: NATURE OF BUSINESS
Visual Defence Inc ("VDI" or "the Company") having its principal place of business at 9225 Leslie Street, Suite 7, Richmond Hill, ON
L4B3H6, Canada was incorporated on 22 February 2005 in Ontario Canada. The Company provides security systems using digital Audio-Visual (AV)
signals transmitted over wireless and physical IP networks, enabling digital AV and data to be captured from a variety of sources, such as
fixed or mobile cameras, microphones, infra-red sensors, access controls and burglar alarms, and delivered to local or remote locations
where it can be managed and monitored.
NOTE 2: BASIS OF PREPARATION
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB"), applicable to interim consolidated
financial statements as described in International Accounting Standard (IAS) 34 Interim Financial Reporting. The Company's unaudited
condensed consolidated financial statements do not conform in all respects to the requirements of International Financial Reporting
Standards for annual financial statements. The Company's condensed consolidated financial statements should be read in conjunction with the
31 December, 2007 audited consolidated financial statements and notes thereto.
The preparation of these unaudited condensed consolidated financial statements requires management to make certain estimates and
assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results
could differ from these estimates and the operating results for the six month period presented are not necessarily indicative of the results
expected for the full year. In the opinion of management, these unaudited condensed consolidated financial statements reflect adjustments
necessary to state fairly the results for the periods presented.
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 3: PROPERTY AND EQUIPMENT
Computers and Office furniture and Leasehold Motor vehicles Total
peripheral equipment equipment improvements
Cost:
Balance at 31 December 2006 $1,075 $490 $262 $230 $2,057
(Audited)
Additions 99 244 5 260 608
Disposals - - - (39) (39)
Foreign currency translation
adjustments - (12) - - (12)
Balance at 30 June 2007 1,174 722 267 451 2,614
(Unaudited)
Additions 34 19 7 - 60
Disposals - - - - -
Foreign currency translation - - - - -
adjustments
Balance at 31 December 2007 1,208 741 274 451 2,674
(Audited)
Additions 81 50 19 - 150
Disposals - - - (104) (104)
Foreign currency translation (34) 17 2 - (15)
adjustments
Balance at 30 June 2008 1,255 808 295 347 2,705
(Unaudited)
Accumulated depreciation
Balance at 31 December 2006 450 173 80 133 836
(Audited)
Additions 120 73 20 39 252
Disposals - - - (33) (33)
Foreign currency translation - - - - -
adjustments
Balance at 30 June 2007 570 246 100 139 1,055
(Unaudited)
Additions 163 44 24 36 267
Disposals - - - - -
Foreign currency translation (3) - - - (3)
adjustments
Balance at 31 December 2007 730 290 124 175 1,319
(Audited)
Additions 157 72 24 46 299
Disposals - - - (104) (104)
Foreign currency translation
adjustments - (33) - - (33)
Balance at 30 June 2008 887 329 148 117 1,481
(Unaudited)
Balance at 30 June 2008 (Unaudited) $368 $479 $147 $230 $1,224
Balance at 30 June 2007 (Unaudited) $604 $476 $167 $312 $1,559
Balance at 31 December 2007 (Audited) $478 $451 $150 $276 $1,355
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 4: OTHER INTANGIBLE ASSETS
Customer Technology and licensing agreements Total
relationships
Cost
Balance at 31 December 2006 $2,681 $822 $3,503
(Audited)
Additions - - -
Amortization (183) (139) (322)
Impairment loss - - -
Foreign currency translation - (30) (30)
adjustments
Balance at 30 June 2007 2,498 653 3,151
(Unaudited)
Additions - - -
Amortization (184) (133) (317)
Impairment loss - - -
Foreign currency translation (6) (7) (13)
adjustments
Balance at 31 December 2007 2,308 513 2,821
(Audited)
Additions - 254 254
Amortization (159) (133) (292)
Impairment loss - - -
Foreign currency translation - 5 5
adjustments
Balance at 30 June 2008 $2,149 $639 $2,788
(Unaudited)
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 5: EQUITY
* A summary of the Company's share option activity and related information is as follows:
Number Weighted average exercise price in Dollars
Outstanding as of 31 December 2,124,500 $1.01
2006 (Audited)
Granted - -
Exercised (90,000) (0.01)
Forfeited (313,500) 0.67
Outstanding as of 30 June 2007 1,721,000 1.10
(Unaudited)
Granted 200,000 0.41
Exercised - -
Forfeited (165,500) (0.41)
Outstanding as of 31 December 1,755,500 0.61
2007 (Audited)
Granted 88,000 0.40
Exercised - -
Forfeited (186,000) (0.45)
Outstanding as of 30 June 2008 1,657,500 $0.60
(Unaudited)
b. The following table summarizes share-based compensation expense recorded in the income statements:
Six months ended Year ended 31 December
30 June
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
Cost of revenues $11 $2 $6
Research and development 5 23 8
Selling and marketing 5 177 446
General and administrative 136 236 262
$157 $438 $722
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 6: DEPRECIATION AND AMORTIZATION
The following table summarizes depreciation and amortization expenses and impairment losses recorded in the income statements:
Six months ended Year ended 31 December
30 June
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
Research and development $134 $141 $272
Selling and marketing 159 185 367
General and administrative 299 253 516
$592 $579 $1,155
NOTE 7: JOINT VENTURE
The following amounts have been recognized in the Company's condensed consolidated financial statements representing its 50% share in
joint venture "Avisecure":
Six months ended Year ended 31 December
30 June
2008 2007 2007
(Unaudited) (Unaudited) (Audited)
Current assets $729 $- $396
Current liabilities - - -
Net current assets $729 $- $396
Revenue $310 $- $-
Expenses 234 - 34
Profit (Loss) after tax $76 $- ($34)
Visual Defence Inc.
Notes to the Condensed Consolidated Financial Statements
Canadian dollars in thousands (except share and per share data)
Six months ended 30 June 2008, 30 June 2007 and year ended 31 December 2007
NOTE 8: SEGMENTAL INFORMATION
The company manages its business on the basis of one business segment. All revenues are derived from customers located in North America
and Middle East, Europe and Africa however a substantial portion of the Company's assets are situated in North America. The following table
presents information by the Company's geographical segment for the six month period ended 30 June 2008 and 2007 and the year ended 31
December 2007
North America
Europe Other Total
Six month ended 30 June 2008
External revenue $2,802 $4,954 $774 $8,530
Total assets $32,789 $- $543 $33,332
Capital expenditure $404 $- $- $404
North America
Europe Other Total
Six month ended 30 June 2007
External revenue $4,253 $5,573 $369 $10,195
Total assets $37,460 $- $370 $37,830
Capital expenditure $604 $- $- $604
North America
Europe Other Total
Year ended 31 December 2007
External revenue $10,276 $17,315 $777 $28,368
Total assets $38,236 $17 $475 $38,728
Capital expenditure $648 $3 $8 $659
This information is provided by RNS
The company news service from the London Stock Exchange
END
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