Publicly Traded Video Surveillance Company DirectoryBy John Honovich, Published on Oct 20, 2009
This directory indexes publicly traded video surveillance companies, aggregating recent financial results and analyzing their impact. The directory includes 17companies that either only provide video surveillance or issue segment results for their video surveillance businesses.
- ADT / Tyco Security
- March Networks
- Samsung GVI
- Synectics / Quadnetics
Financial numbers are usually accurate. Publicly traded companies are subject to regulations that make their numbers more trustworthy than what private companies often provide.
With greater accuracy, better decisions can be made on company strength and market growth.
Most video surveillance companies are private. Many of the largest companies in video surveillance are subsidiaries of conglomerates that do not disclose their surveillance revenues. Both of these severely limits the number of video surveillance public financial reports.
Also, Europe and Asian companies are disproportionately represented as the barrier for US companies to IPO is higher.
|Company||Annual Revenue||Growth Rate||Sector||Notes|
|ADT||Not Disclosed||-13.00%||Analog||Segment Information|
|Axis||$300,000,000||-11.00%||IP||Local Currency Terms|
|March Networks||$100,000,000||-14.00%||Analog / IP|
|NICE||$148,000,000||-10.20%||Analog / IP||All Security sales|
|Optelecom-nkf||$45,000,000||-10.00%||Analog / IP|
|Synectics / Quadnetics||$115,000,000||-10.80%||Analog / IP|
|Tyco Security||Not Disclosed||-12.00%||Analog||Segment Information|
|Vicon||$60,000,000||-9.00%||Analog / IP|
ADT / Tyco Security
Tyco has released financial results for the Spring 2009 quarter (ending June 26, 2009). Those results include:
- 12% decline in organic revenue for electronic security categories. This is a broad category including access control and other products outside of video surveillance.
- 13% decline in organic revenue for ADT US Commercial
- US Residential revenue may have increased as ADT cites growth in both account base and average revenue per user. They do not cite directly growth so I am inferring from related statements.
Axis challenges continued in Q3 2009 with the company admitting for the first time the impact of "tougher competition."
While Axis emphasized higher sales quarter over quarter (e.g., Q3 vs Q2), the year over year trend (Q3 2009 vs. Q3 2008) shows more negative conditions (growth -11% in local currency for Q3 2009 compared to Q3 2008).
In local currency terms, Q3 2009 sales compared to Q3 2008 were down in all 3 regions: -11% in Americas, -12% in EMEA and -5% in Asia.
Gross margins were also down in Q3 2009 to 52.3% from 54.8% in Q3 2008 (Axis historic gross margins have been about 55%). Axis acknowledged that tougher competition impacted their gross margins.
Operating margins were higher relative to recent quarters (16.7% in Q3 2009, compared to under 10% in Q1 and Q2 2009) though historically Axis operating margins have been at or over 20%. However, Axis achieved this by significantly reducing costs across the board - R&D, sales and marketing and administration.
These challenges are especially noteworthy given that Axis has aggressively expanded their product offerings in 2009 with many major new launches including next generation box, dome and PTZ cameras. While the quality and innovation in these product offerings are clear, sales are weak and market share is certainly being lost to lower cost, lower quality product alternatives.
Throughout 2009, top line revenue growth has benefited from the depreciation of the Swedish Kroner (SEK) relative to many currencies (most significantly the US dollar where Axis does 50% of sales). For example, see SEK-USD comparison charts for 2008 and 2009. On the other hand, over the last 6 months, the SEK has been appreciating against many currencies, reducing the exchange rate benefit. Indeed, unless the SEK starts depreciating soon, Axis top line revenue growth (measured in SEK) will be negatively impacted in 2010 by this "swing back".
While short term currency exchange variances have a minor impact on overall competitiveness, they can distort financial metrics.
CSST is a publicly traded company on the NYSE (see quote). Their current market cap is $423M USD; which is less than their 2008 annual revenue (Price to Sales Ratio under 1). Despite the relatively low market capitalization, the company is fairly profitable with Net Income hovering about 15%, providing a low P/E ratio of about 13.
CSST's revenue growth was strong in Q2 2009 but profitability weakened [link no longer available]. CSST cited price pressure in the corporate sector and the desire to grow market share.
Everfocus is a publicly traded company on the Taipei stock exchange. Financial reports [link no longer available] are available (though only in Chinese). According to their most recent report (their Q1 2009 statement [link no longer available]), revenue dropped about 10% compared to Q1 2008 (from $614M NTD to $555M NTD).
Overall, FLIR generated over $1 Billion USD in 2008 revenue. FLIR's business, though, spans many markets and applications including government and thermography.
Video surveillance is part of the commercial division of FLIR. This division also includes maritime, transportation and aviation. Q2 2009 revenue for this division was approximately $50 Million USD up only 4% over Q2 2008. However, this number is likely impacted by negative demand for thermal products in autos and airplanes.
Indigovision revenue surged in the 1st half of 2009 [link no longer available] compared to the previous period in 2008, bucking a broader trend of publicly traded IP video companies who saw revenue growth shrink significantly (see Axis and Mobotix's results).
Here is a summary of revenue over the past 2 years:
- Aug 2007 to Jan 2008 H108 - 9.2m GBP
- Feb to July 2008 H208 - 9.2m GBP
- Aug 2008 to Jan 2009 H109 - 10.7m GBP
- Feb to July 2009 H209 - 15.7m GBP
March Network's revenue shrank by 14% in Q2 2009 compared to a year ago (though their announcement obscures this with a focus on improved profitability through cost cutting).
Specifically, the North American market led the drop with a severe contraction of 27% (examine their presentation deck for details [link no longer available]). Retail was the major driver of reduced revenue. Wal-Mart was significant but if read the document correctly probably only half of the drop can be attributed to Wal-Mart's reducing purchasing.
By contrast, in Q1 2009, March grew revenue 2% relative to Q1 2008.
[Note: I use 'normal' calendar quarters to make it easier for readers to understand. However, March's fiscal calendar is 3 quarters ahead of the normal calendar]
Financial performance is not as strong as Mobotix portrays in their press release. In that release, they emphasize 27.1% revenue growth for the just finished fiscal year compared to the previous year.
However, an examination of their Q2 2009 performance, relative to their Q2 2008 performance indicates only 7-8% revenue growth. [This was calculated by analyzing a number of documents and was confirmed in an e-mail with Mobotix] Unlike some companies whose growth rate dropped immediately after the September 2008 crisis, Mobotix's rate dropped later. Of the entire year, the growth rate was the slowest in Q2 2009.
NICE's "Public Safety and Security Sector" reports $148 Million USD revenue in 2008, up from $122 Million USD revenue in 2007 (see page 55 of their 2008 annual report [link no longer available]). Q2 2009 revenue was down 10% year over year ($35 M USD Q2 2009 vs $39 M USD Q2 2008).
Transportation/Enterprise video surveillance specialist Optelecom-nkf reports 2008 annual revenue of approximately $45 Million USD. Revenue fell 10% from Q2 2009 compared to Q2 2008.
In the first half of 2009, Samsung GVI's revenue was down 8% relative to the first half of 2008 (Q1 09 revenue was about 7% less than Q1 08 while Q2 09 revenue was about 9.6% less than Q2 09 revenue). Read the Samsung GVI 10Q [link no longer available] for details.
Samsung GVI is on pace to do $45 Million USD in revenue in 2009 (down from about $50 Million USD in 2008). However, their market capitalization is under $10 Million USD (as of Sept 1, 2009).
Synectics / Quadnetics
UK CCTV systems supplier reports approximately $115 Million USD Revenue for the fiscal year ending May 31, 2009. This is down approximately 10.8% from the previous year.
Their IP video division, Synectics reports 5% year over year growth. Revenue for the segment was not disclosed.
Review Synectics 2009 annual report for details.
Techwell's surveillance division suffered drops in revenue of 35% in Q2 2009 (compared to Q2 2008) and 39% for the first half of 2008. Read Techwell's Q2 10k report [link no longer available]. In 2008, total surveillance revenue was about $50 M USD annually. This year, Techwell is only on pace for $30 M USD annual revenue.
Examining their geographical revenue breakdown, it appears they a lost a major or major Taiwanese distributor in the last year. For instance, in H1 2008, 33% of $32 M USD came from Taiwan. In H1 2009, only 16% of $22 M USD came from Taiwan. That's a drop in $7 M USD just from that 1 region (70% of their total revenue drop). By contrast, revenue from China increased from about $10 M USD in H1 2008 to about $12 M USD in 2009.
[Note: Techwell's Q2 PR announcement emphasizes that revenue increased from Q1 to Q2. However, that is misleading and they know it. As they acknoweldge in their 10Q, Q1 revenue is lower because most of their customers are in Asia where Lunar New Year celebrations lower Q1 business.]
In Q2 2009, Vicon's revenue dropped 9%. In the past 3 quarters (Q4 08 to Q2 09), revenue dropped 4.5%. As such revenue decline accelerated in Q2 09 relative to Q1 09. Read the Vicon Q2 10Q for details.
Top 10 IP camera manufacturer Vivotek's revenue dropped significantly in the 1st half of 2009 compared to the 1st half of 2008. These results are provided in Vivotek's H1 financial update (only available in Chinese but Page 6 has the income statement).
In the first half of 2008, revenue was approximately $20 M USD. By contrast, in the first half of 2009, revenue was only about $14.5 M USD. This is a 25% drop in revenue.
In an e-mail, Vivotek cited, "The main reason is the big sales drop from one of our ODM customer. Our VIVOTEK brand sales is growing."