Avigilon Announces Solid Financials to End 2015

By John Honovich, Published Mar 01, 2016, 12:00am EST

2015 was brutal for Avigilon.

Most of the management team was ousted or quit, culminated by the 'retirement' of their leader / COO. The stock price, sales growth and profits all declined.

But the end of 2015 provides hope for Avigilon. In this note, we examine Avigilon's 2015 year end financials, looking at the strengths and weaknesses of the results.

Sales **** ******** ********* *************

*********, **** ***** **** turnover ******** ******* ******** as ** ******** *****. While ******** *** *** return ** ***** *** huge *******, ******* *** they **********.

Solid ******* ******

*******'* ** **** ******* growth, ** ******** ********, was **%.

***** *** ******* *************** and ***** *********** ******* for * - **% growth (*.*.,****) *** ********'* ********** issues, ~**% *** ******** is ****.

Profits ******** ** *******

** *** ******** ****, profits ******** ** *******. Net ******* *** ** 2015 **** ~*%, ******* down **** **** **** 10%+ ******* **** ******. The ************ ** *** ~$100 ******* ******* ******* this ** **** ** heavy ******** ********* ** the ***** ************.

$500M **** ** **** ** ************

**** ******** **** ******, they *** * **** for $*** ******* ** 2016. ********, *** ******** goal *** $*** ******* for *** **** *** later **** ******* ** to '*** ****', *.*., a ****** ******* ** $125 ******* ***, ***** they ****** **** *** in ** **** (***** Q4 **** ******* *** $109 ******* ***).

*******, ******** *** ********* dramatically **** *** ********* of *** ******** ****** during *** *******. **** is *** **** ***** quarter *** *** ******* growth ** ** **** higher **** *** ******* revenue (*.*., **** ******* net ******* *** +**%, but ******** ******** *** ~20%). ******* ******** ********, they ***** *** *** this ******.

Avigilon ********* ** *** **********

******** ** ****, ******** will ** ********* ** USD, ****** **** ***. For *******, **** ******* was ~$*** ******* ***, which ** ~$*** ******* USD. ** ********, * few ***** ***, *** ratio *** ~*:*.

2016 ********** - ~$*** ******* *** *******

*** *** ***** ****, Avigilon ** ****** **** year ****** ******** **** a ****** ******* ** $335 ** $*** *******. This ***** ***** * growth ****, ** *** of **-**%, ***** ***** be *****, ***** *** market **********. [****: ******* version ****** ~**%]

Sales ******** ******** ********** ******

******** *** *** *** back ** **** ***** expenses, **** ***** *** marketing ***** ********** ****** than *******, ********** **% in **. ** ***** anticipate **** ******** ***** start ******* ***** ** the ****** ** ********** tough *** ********* **** to ** ********* **** short **** *******.

Inventories **** **** ******

*** ********** ****** ** that *********** **** **** doubled **** ~$** ******* to ~$** *******. ** is *** ***** ** us *** *** ** might ** *** ** the *** ********** ******** in ***** *** **** was *** ** ********. We **** ****** ** we **** **** ******* here.

Investor ****

*** ********* ** * recap ** *** ******** call:

  • ******** *** ******* **** ********* on *** **** - 'future ** *** ********', 'resurgence ** ***** *********'
  • $* ******* *** ********** revenue ****** *** ** 2015
  • ****** ******* ********* ** 'really **** **' ****, licensing ******* '****** ********', already ******** ****** ** companies '************' *** *** early ****** ******* ****
  • ******** ***** **** *** undervalued ************** *** ****** ****** **** **** **** have **** ** *** the **** ***** ** someone ***** ** ******** them.
  • ***-*** ****** ******* ** new ** *******
  • ******* ****** ********* *** ***** ***** Asian ************* ******, ******** *** ****** that **** ** ***** valuation *********** ** ***** end ** ***.
  • ******* ******* ** **** on **** (****** ** say **** *** ******* it *** ******** ** us *** *** ******** about ********* ********** *** growth). ******** *** ********* that ** "***** *** websites **** *** ***** in **** *** *****". 

Industry ******* **** *******

********, ****** ***, *** estimates ****** ****** ******** growth **** ** ~*%, down **** **** ****'* estimate ** **%. **** does *** ******** ** given *** ******** ****** the ******** *****, ****** Avigilon ********** **** ************ in ***** ***** **********, also *** **********. *********** **** ******** *** / *** ***********.

Outlook ******** *** ****

**********, ** ** **** where ******** ** ***** it **** **** ***** the *** ** **** to *** *** ********** settles / ****** ***. However, **** ** * solid **** ** ***. We ***** ** ** unlikely **** **** **** significantly ********** **** **** pace ***, ***** *** industry's ******* *********, ** they *** ********* ****** this *****, ******** *** go ******* ** * moderately ******** ************, ** not *** ***** ****** they **** ***** ** be.

Comments (4)

Also, Avigilon's CEO continues:

"I mean it's a fact, there is over US$20 billion spent per year today and that's growing a significant amount per year, more than US$1 billion a year of new business."

So that's a 5% growth rate, which sounds roughly right. The fact that industry growth is slowing overall is no knock against Avigilon. But it is much a smaller tailwind for all companies, including Avigilon, than in year's past when the growth rate was integer multiples higher than that.

Investors are positive about the news:

Though still down more than 50% from the highs of 2 years ago:

I like all websites and commentary that are based in fact and truth and are balanced.

Obviously no one ever told him about IPVM! Not anymore.

Invite sent.

An undisclosed source pointed out that trade receivables were up sharply, far higher than revenue growth. This can be a sign of risk.

Excerpt from report:

Notice that past due accounts tripled year over year, from ~$4 million to ~$12 million. This is worth tracking this year to see if this reverts back to lower levels or continues to outgrow revenue.

If it is the later and growing the risks included, "customers are taking longer to pay their bills, which may be a warning that customers are dissatisfied with the company's product or service, or that sales are being made to customers that are less credit-worthy, or that salespeople have to offer longer payment terms in order to generate sales."

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