Weak: Vicon / IQinVision Financials Out

By: John Honovich, Published on Dec 12, 2014

Combined Vicon / IQinVision financials are out for the first time since their combination closed.

And the numbers are weak, both top line and on margins.

************* / ******************** *** *** *** the ***** **** ***** their *********** ******.

*** *** ******* *** weak, **** *** **** and ** *******.

[***************]

Revenue ****

[**********:*****'* ********* ********* ************]

*****'* ******* ********* ******* was **** **% **** over ****, **** ** ~$8.7 ******* **** $**.* million ** ****** ** 2013 (******** **).

********** *********** $*.* ******* in * ***** *** 1 ***, ***** ******* them at ** ****** ***** run **** ** $** million.

*** *** ******** *** at ** ****** *** rate ** ~$** *******.

Gross ******* ****

*** **** ****** ******* is **** ***** ******* are **** ************* ** just **.*%, **** ***** excluding '************* ********* **********.' Worse, ***** ******** **** last **** *** * positive *******, ****** "********* favorable ******* ***** *** in *** ****** ******* of ****."

~**% ***** ******* *** really ***. ****'* ******* to *** / **-******** type *********, *********. **** ******** ************ generally ******** ******* ** the **%+ *****.

***, *** *********, ***** margins ******** **** *********** positioning *** ******* ******. Plus, ***** **** ******* in * ***** ** IQinVision's *******, **** ***** poorly *** ***** ***** margins / *********** ** well.

Decline *****

*****, ********* ***** ******* and ********* ******** ** the **** **** ** a ********* ***********. ***** may ** **** ** reduce ********* ***** ** the ********* *** ********** but **** **** **** to **** ****** *** margin *** ******* ******* to **** *** ****** at *********.

Cash ********

** *** ******** ****, Vicon *** **** *** big **** - ** their ************ ********, * contract *** $*.* *******. Though ** ** *** revenue, **** ** ****** it ****** ******* ****** cash. **** ** *****'* second **** ****** **** in ** **** *****, following ** ****'* ******** sale.

**** **** **** *** real ****** ****, ***** cash ** ****** ** be ***** $** *******, which ** *** **** for * ******* **** such ***** ***** *** needs *** ******** ********.

** ** *** ******* Vicon *** *** ***** buildings ** ****.

********

** *********, *****'* *** CEO ********* **** *** strategy *** ******* ******* and *** ** *** independent ******** ***** (***** we ********* ** ******* ********). ***, ** ******** that ********:

"*** ******** ** ** continue ** ****** **** Vicon *********** ********* *** IQeye *****-***** *******, ***** also *********** **** **** a ******** ********."

***, ** ******* **** are ***** ** **** solutions ** ****.

Stock **** ******

******** ******** ******* **% ** the **** *** ******, and ** *** ** ~$1.50 *** *****, *** an ****** ****** ************** of **** $** *******, which ** **** **** 1/4th ***** ***** ******. In **********, *** ***** dropped **% ***** ******** were *********.

*****'* *** *** *** a *** ** **** to **.

Comments (6)

It's worth noting that Vicon is not a real harware manufacturer, but rather an OEM so the gross margin number is not so surprising.

IQinVision is however, a 'real' hardware manufacturer, at least for a portion of their product line. The gross profit margin number is more of a reflection that you can't make money making 'commodity' hardware anymore unless you're Dahua or Hikvision.

I don't look at Vicon as a commodity (especially with IQInvision in mind), I believe they sell on solutions and that is where they are struggling competitively, with their solutions being overpriced versus competitors (Avigilon, etc). However, yes, you cannot get away with OEM anymore unless you have very strong brand power, and very huge volume. You need to have your own manufacturing or at the least your own design, etc.

IQinVision might have been "all that" a few years ago. Today there is absolutely nothing compelling about their lineup. The performance is IMO subpar compared to the competition ( Hik, Dahua, Vivotek, et al). No wonder their sales are declining.

That's been IQinVision's challenge the last few years leading up to this deal. Now, the question becomes, how do they differentiate against the legions of low cost, solid quality offerings now available.

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