FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
Vicon Industries: Joan Wolf
631/952-2288
Bliss, Gouverneur & Associates: John Bliss
212/840-1661
VICON INDUSTRIES REPORTS THIRD QUARTER RESULTS
HAUPPAUGE, NY, August 14, 2003 - Vicon Industries, Inc. (Amex: VII), a leading
designer and producer of digital video management systems, today reported
operating results for the third fiscal quarter and nine months ended June 30,
2003. The announcement was made by CEO Ken Darby, who said revenues from new,
higher margin network video products offset the effect of lower sales.
Net sales for the third fiscal quarter were $13.1 million, a decrease of 9%
compared with $14.3 million for the previous fiscal year period. Net income was
$30,000 ($.01 per share diluted), compared with net income of $28,000 ($.01 per
share diluted) for the same period last fiscal year.
For the nine months, net sales were $38.2 million, a decrease of 6% from $40.7
million reported for the year-ago period. A net loss of $4.8 million ($1.03 per
share diluted) was incurred compared with a net loss of $786,000 ($.17 per share
diluted) for the year ago period. The current nine-month period loss includes
the combined effects of a goodwill impairment charge and a deferred tax asset
valuation allowance aggregating $3.5 million or $.75 per share diluted. Both
non-cash charges were taken in the second fiscal quarter.
Commenting on the third quarter, Mr. Darby said sales of Vicon's new network
(digital) video products, ViconNet/Kollector Elite (VK), helped gross profit
margins increase to 40.3% compared with 35.5% in the year ago quarter. The third
quarter was the first full quarter of product shipments for the initial VK
models, and additional ViconNet based products are planned for shipment later
this calendar year.
Darby said the quarter also included a performance compensation charge of
$278,000 relating to the sale of certain quantities of VK products. The
performance compensation obligation of up to $810,000 maximum was part of the
1999 acquisition of QSR, Ltd., an Israeli digital video development company. The
success of VK products to date has resulted in performance compensation charges
of $325,000 and $278,000 in the second and third fiscal quarters respectively.
Product development expense, including the performance compensation charges,
totaled 10.3% and 9.9% of sales for the three and nine-month periods,
respectively. Development efforts are principally focused on enhancing existing
VK products and creating new network enabled products. The Company will showcase
the latest version of its ViconNet network video management system, together
with soon to be available ViconNet compatible cameras, at the industry's biggest
trade show, ASIS, in September.
1
Vicon Results
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Vicon Industries, Inc. designs, manufactures, assembles and markets a wide range
of video systems and system components used for security, surveillance, safety
and control purposes by a broad group of end users worldwide.
This news release contains forward-looking statements that involve risks and
uncertainties. Statements that are not historical facts, including statements
about the adequacy of reserves, estimated costs, Company intentions,
probabilities, beliefs, prospects and strategies and its expectations about
expansion into new markets, growth in existing markets, enhanced operating
margins or growth in its business, are forward-looking statements that involve
risks and uncertainties. Actual results and events may differ significantly from
those discussed in the forward-looking statements and the Company undertakes no
obligation to publicly update or revise any forward-looking statements.
2
(Table of Operations Attached)
Vicon Industries, Inc.
Vicon Industries, Inc.
Summary of Operations
Three Months Nine Months
Ended June 30, Ended June 30,
----------------------- ----------------------------
2003 2002 2003 2002
---- ---- ---- ----
Net sales $13,051,000 $14,274,000 $38,151,000 $40,671,000
Gross profit 5,257,000 5,062,000 13,798,000 13,769,000
Operating income
(loss) 83,000 97,000 (1,510,000) (1,048,000)
Income (loss)before
income taxes 59,000 46,000 (1,564,000) (1,166,000)
Income tax provision
(benefit)(Note 1) 29,000 18,000 1,839,000 (380,000)
Income (loss) before
cumulative effect
of a change in
accounting principle 30,000 28,000 (3,403,000) (786,000)
Cumulative effect
of a change in
accounting principle
(Note 2) - - (1,373,000) -
--------- ---------- ----------- ------------
Net income (loss) $30,000 $28,000 $(4,776,000) $(786,000)
======== ========== =========== ============
Basic and diluted earnings (loss) per share:
- --------------------------------------------
Earnings (loss)
before cumulative
effect of a change
in accounting
principle $ .01 $ .01 $ (.73) $ (.17)
Cumulative effect
of a change in
accounting principle $ - $ - $ (.30) $ -
--------- -------- ----------- -----------
Earnings (loss)
per share $ .01 $ .01 $ (1.03) $ (.17)
========= ======== =========== ===========
Shares used in computing earnings (loss) per share:
- ---------------------------------------------------
Basic 4,627,000 4,670,000 4,637,000 4,658,000
Diluted 4,666,000 4,734,000 4,637,000 4,658,000
Note 1: Nine month figure includes a $2.1 million deferred tax asset valuation
allowance charge.
Note 2: Nine month figure represents goodwill writeoff as a result of adopting a
new accounting standard.