EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION:
Vicon Industries: Joan Wolf
631/952-2288
Bliss, Gouverneur & Associates: John Bliss
212/840-1661
VICON REPORTS SECOND QUARTER RESULTS
HAUPPAUGE, NY, May 16, 2005 - Vicon Industries, Inc. (Amex: VII), a leading
designer and producer of digital video security and surveillance systems, today
reported operating results for the second fiscal quarter ended March 31, 2005.
The announcement was made by CEO Ken Darby.
Net sales for the second fiscal quarter were $12.8 million, an increase of 5%
compared with $12.2 million in the second quarter of the prior fiscal year. A
net loss of $1,169,000 ($.26 per share) was incurred compared with a net loss of
$901,000 ($.20 per share) in the prior year quarter.
For the six months, net sales were $28.4 million, an increase of 7% compared
with $26.6 million in the first six months of the prior fiscal year. A net loss
of $1,909,000 ($.42 per share) was incurred compared with a net loss of $779,000
($.17 per share) in the prior year six-month period.
Commenting on the second quarter results, Mr. Darby said U.S. sales declined 11%
to $6.2 million while foreign sales grew 26% to $6.6 million. The foreign
revenue growth was all attributable to Videotronic, Germany, whose operating and
intangible assets were acquired October 1, 2004. Shipments and new orders were
well below plan as the Company experienced a slowdown worldwide in closing
projects during the quarter, noted Mr. Darby.
At quarter end, U.S. senior sales management was restructured under Tom
Finstein, EVP, who assumed responsibility for business development, sales and
marketing functions. In addition, Bret McGowan, VP Marketing, moved to the
position of VP, U.S. Sales and Marketing, reporting to Mr. Finstein.
Mr. Darby said operating results for the quarter were influenced by the
following factors:
1. The Company incurred $249,000 of legal expenses ($395,000 for the six
months) defending itself in a patent infringement suit. On April 11, 2005
the U.S. Patent Office, in ruling upon Vicon's petition to re-examine
plaintiff's patent, issued an order granting re-examination of the patent.
The Company continues to vigorously defend itself in this matter.
2. The Company's new German subsidiary, Videotronic Infosystems, incurred an
operating loss of $87,000 in the quarter ($243,000 for the six months). The
operating losses were expected in view of the transitional issues
Videotronic would face emerging from bankruptcy. Since the acquisition on
October 1, 2004, Videotronic has made good progress in re-building its
customer base and Vicon's investment in Videotronic now totals $1.9
million. Also in the second quarter, the Company recorded an extraordinary
gain of $211,000 relating to the recovery of Videotronic assets in excess
of their purchase price.
3. In the second quarter, the Company recorded a $103,000 charge for employee
severance payments.
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4. A performance-based compensation charge of $90,000 was also taken in the
quarter relating to the 1999 acquisition of our Israeli software
development company, Vicon Systems, Ltd. The expense was part of the
original acquisition cost and was earned only when certain products were
developed by them and sold by Vicon.
While the operating results for the period are disappointing, the Company's
financial position remains strong. Other than mortgage debt of $2.6 million, the
Company has no bank debt and had over $4 million in cash at quarter end.
At a recent industry trade show in Las Vegas, the Company showcased ViconNet(r)
3.X, the next generation software application that powers a new Kollector(r)
family of video servers/recorders and IP cameras. ViconNet(r) 3.X is scheduled
for customer shipments later this year. "The significant digital video
development investment the Company has made over the last several years
positions us well for the future. Digital (IP) video applications are forecast
to dominate the video surveillance market and we will be ready for it" said
Darby.
Vicon Industries, Inc. designs, manufactures, assembles and markets a wide range
of video systems and system components used for security, surveillance, safety
and communication 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.
(Table of Operations Attached)
Table of Operations
Vicon Industries, Inc.
Condensed Statements of Operations
Three Months Ended March 31, Six Months Ended March 31,
--------------------------- --------------------------
2005 2004 2005 2004
==== ==== ==== ====
Net sales $12,802,000 $12,235,000 $28,384,000 $26,573,000
Gross profit 4,708,000 4,525,000 10,576,000 10,371,000
Operating loss (1,301,000) (838,000) (1,974,000) (553,000)
Loss before income taxes (1,338,000) (822,000) (2,065,000) (545,000)
Income tax expense 42,000 79,000 55,000 234,000
Loss before extraordinary
gain (1,380,000) (901,000) (2,120,000) (779,000)
Extraordinary gain 211,000 - 211,000 -
------------ ------------ ------------ ------------
Net loss $(1,169,000) $ (901,000) $(1,909,000) $ (779,000)
============ ============ ============ ============
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Basic and diluted loss per share:
- ---------------------------------
Loss before extraordinary
gain $(.30) $(.20) $(.46) $(.17)
Extraordinary gain $ .04 - .04 -
------ ------ ------ ------
Net loss per share $(.26) $(.20) $(.42) $(.17)
====== ====== ====== ======
Shares used in computing
basic and diluted
loss per share 4,566,000 4,605,000 4,564,000 4,606,000
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