Vicon Reports Net Sales of $13.1M in 3Q
Vicon Industries Inc., a manufacturer of network video products, reported operating results for the third fiscal quarter and nine months ended June 30, 2003. The announcement was made by CEO Ken Darby, who said revenues from new, higher margin network video products offset the effect of lower sales.
Net sales for the third fiscal quarter were $13.1 million, a decrease of 9 percent compared with $14.3 million for the previous fiscal year period. Net income was $30,000 (1 cent per share diluted), compared with net income of $28,000 (1 cent per share diluted) for the same period last fiscal year.
For the nine months, net sales were $38.2 million, a decrease of 6 percent from $40.7 million reported for the same period last year. A net loss of $4.8 million ($1.03 per share diluted) was incurred compared with a net loss of $786,000 (17 cents per share diluted) for the year-ago period. The current nine-month period loss includes the combined effects of a goodwill impairment charge and a deferred tax asset valuation allowance aggregating $3.5 million, or 75 cent per share diluted. Both noncash charges were taken in the second fiscal quarter.
Commenting on the third quarter, Darby said sales of Vicon’s new network (digital) video products, ViconNet/Kollector Elite (VK), helped gross profit margins increase to 40.3 percent compared with 35.5 percent in the same quarter last year. The third quarter was the first full quarter of product shipments for the initial VK models, and additional ViconNet based products are planned for shipment later this calendar year.
Darby said the quarter also included a performance compensation charge of $278,000 relating to the sale of certain quantities of VK products. The performance compensation obligation of up to $810,000 maximum was part of the 1999 acquisition of QSR Ltd., an Israeli digital video development company. The success of VK products to date has resulted in performance compensation charges of $325,000 and $278,000 in the second and third fiscal quarters respectively.
Product development expense, including the performance compensation charges, totaled 10.3 percent and 9.9 percent of sales for the three and nine-month periods, respectively. Development efforts are principally focused on enhancing existing VK products and creating new network enabled products. The company will showcase the latest version of its ViconNet network video management system, together with soon to be available ViconNet compatible cameras, at ASIS in September.
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