Vicon's Q1 2011 Financial Performance Examined

This note examines the Q1 2011 financial performance of analog incument Vicon Security. During the recession, Vicon's revenue dropped sharply before finally having its first positive quarter in many years at the end of 2010.

Modest revenue growth continued in Q1 2011 with some signs of competitive deterioration. The Vicon Q1 2011 10Q SEC Filing shows the following:

• Revenue "increased 6% to $12.1 million compared with $11.4 million in the year ago period"
• However, "Gross profit margins for the second quarter of fiscal 2011 decreased to 38.9% compared with 41.1% in the year ago period.  The decrease in current quarter margins was the result of increased competitive pressures in the worldwide security market and less favorable product mix on certain project sales."  Gross margins were 44.6% in the same period 2 years ago (Q1 2009 filing).
• Despite the revenue increase, because of the decline in gross margins, total losses increased to $1.1 Million from $1.0 Million in the comparable quarter for 2010.
• US sales are rebounding but not international: "Domestic sales increased 14% to $7.1 million compared with $6.2 million in the year ago period while international sales decreased 3% to $5.0 million compared with $5.2 million in the year ago period."
• While revenue seems to have flattened, compared to 4 years ago, overall revenue is still down ~28% compared to 2007 (nearly $17 Million quarterly revenue in Q1 2007).