Vicon Steep Revenue Decline

CP
Carlton Purvis
•Published May 15, 2013 04:00 AM
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We have been following Vicon's slow, downward spiral since 2009 and the company's struggles continue. The company's revenue fell steeply in the second quarter of FY 2013, and the company is even selling its New York headquarters to save money, according a financial report [link no longer available] filed this week. In this post we examine the report. 

Revenue / Profit

  • Vicon quarterly revenue fell 30% from $12.5 million to $8.6 million. Vicon cites weak European markets and technical problems related to the new release of the company’s software.
  • In both its geographic markets revenue was down significantly. In North America it was down 27% while in EMEA sales decreased 38%. It is clearly far more than Europe.
  • The backlog of unfilled orders increased $1.6 million over six months, but that would only contribute to a fraction of Vicon's overall drop in revenue. 
  • Quarterly losses increased from $280,527 to $1.4 million (16% operating loss)
  • Gross profit margins fell 39.7% to 38.9%. Typically surveillance companies are in the 50% or higher range, placing Vicon on the bottom tier of gross margins. 

Cash Position / Office Sale

  • Cash decreased $1.7 million. They started the fiscal year with $6.2 million and are now down to 4.5 million.
  • Vicon is selling its headquarters building for $6 million and has purchased a new facility for $3.3 million. The company hopes the two transactions will generate $2.5 million to help it meet its operating costs and expenditures for the next year.

Market Capitalization

The stock price is down more than 50% in the last 3 years (see stock chart) and their market capitalization is ~$12 million USD.

R&D Expenditures

Research and development expense decreased year over year from $1.31 million to $1.06 million, a drop of 19%. As a percentage of revenue, R&D is now 10%, down from 13%. Given their admitted challenges in shipping their release, such declines may make it even more challenging.

What's Next?

While Vicon was once one of the largest and most prestigious surveillance manufacturers, it will be very challenging for them to recover from this steep decline.

Calls and emails to Vicon about the report were not returned.

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