08:00 Mon 23 Apr 2018
SimiGon Limited - Final Results
SimiGon Ltd
("
Audited Full Year Results
Financial Highlights
· Audited final results slightly ahead of trading update on
· Revenues of
· Net loss of
· Gross margin 78% (2016: 69%)
· Basic and diluted loss per share of
Operational Highlights
· Continued success in securing additional business in core defence-related market:
o Successfully leveraged the USAF T-6A Flight Training Devices ("FTD") upgrade to win Contractor Logistics Support modification;
o Successful support for Lockheed Martin's
· Delivery milestones for
· Delivery milestones completed for large scale contract as prime contractor, including the successful completion of all systems delivery milestones for
· Continued support for major military flight training programmes including advanced jet training program and the
·
· Continue to identify additional opportunities and expand into the commercial and civilian training markets.
Post Period Event
· Signed a contract with the
· Awarded a 28 month contract amendment by the USAF for additional Contractor Logistics Support ("CLS") services for SIMbox-based T-6A Level 5
· Bought back 225,000 ordinary shares of
Mr.
"As previously announced the financial results for the Period have been adversely affected by a number of contributing factors resulting in both revenue and profit performance being behind what we had hoped to achieve at the outset of the year. Procedural delays in concluding the signatory processes for the significant contract with the
Despite these frustrating setbacks, related to the timing of revenue recognition rather than actual underperformance, the board remain optimistic about the long term growth profile of the business. We are confident that the work we have continued to do in relation to research and development and repositioning the Company to be seen as a leading technology partner across a number of markets will come to fruition. This confidence is underlined by the fact that we have a backlog of over
Enquiries:
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+1 (407) 951 5548 |
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finnCap (NOMAD & Broker) |
+44 (0) 20 7220 0500 |
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Overview
While the Company's financial performance for year 2017 has been disappointing, the underlying business remains profitable and continues to perform well with new business won and recurring revenues from existing strategic partners. The pipeline of new business in the Company's core military, aviation and non-military verticals remains strong and the Board is encouraged by new opportunities identified in the mass application market. This is demonstrated in the Group's ten year backlog of over
As announced in the trading update in
The Company maintains a strong balance sheet with liquid cash balances of
Notwithstanding the financial performance having been adversely affected by events outside our control, during the year, the Company continued to progress operationally with the underlying business, including the successful delivery milestones of its long term contracts. This includes, final deliveries for a
The Company's R&D team continues to stay ahead of the market with major advances in simulation streaming, graphic engine and Image Generation capabilities, Machine Learning and Training Management System infrastructure to boost SIMbox technology and increase market penetration across military and civilian training markets. Significant progress has been made in adapting the platform for expansion into new domains in order to leverage the Company's technology beyond the core defence market into commercial verticals and civilian / consumer applications and to be in line with a fundamental shift in training through immersive experiences, including Virtual Reality, Augmented Reality and Mixed Reality, rather than reading manuals.
In addition to its traditional licenses business,
Operational Review
The Company remains at the forefront to of design and application of highly technical simulation and training solutions.
Markets
The Company characterizes its target markets as follows:
Military and defence related industry
The Company's track record of on-time and cost-effective solutions and deliveries in the military and defence industry has led to winning new military and non-military related contracts in different geographic territories, as well as add-on contracts with existing customers.
The Company is constantly working to position itself to win large military training mandates opportunities.
Civilian and Commercial vertical markets
The civilian, Smart Education and Learning market is expected to grow nearly 25% annually, from
The Company has identified opportunities within the market as training techniques develop and begin to encompass more Virtual Reality, Mixed Reality and Augmented Reality. The emerging trend towards Simulation Based Training, led by dynamic Virtual Instructors is gaining momentum, with consumers demanding more immersive training in learning and training regimes.
The Company's disruptive, commercial off-the-shelf (COTS) technologies can be used to create top layer application content to deliver training environments in vertical commercial markets, including commercial aviation, homeland security, driver safety, medicine, energy. These targeted verticals share similar requirements to the defence-related industries in that they are highly regulated and require workers to be highly skilled and constantly developing and training.
Among the Company's advances in the civilian segment include a
Business Model
With SaaS-based contracts, the recurring maintenance and support stream is already included in the contract terms. In addition, the Company maintains flexibility with its traditional perpetual license fee model where the Company is paid for software license and support, as well as providing turnkey solutions for customers and partners as a Prime contractor or Sub-contractor.
Growth Strategy
The multiple market opportunities provided the Virtual Reality market which is estimated at more than
R&D
The Company's commitment to R&D is integral to growth, ensuring it remains at the forefront of new technologies. This allows the Company to pursue new opportunities while maintaining a business of solutions, upgrades and enhancements to deepen its relationship with existing clients and capture new customers.
On the marketing side, the Company has boosted marketing efforts and collateral, including the launch of a new corporate website along with improvements to its digital marketing capabilities. These have been designed to support the Group as it ramps up its campaigns to enter new markets and engage new customers as well as growing market presence in markets it already operates.
Significant contracts
New contracts
In
Long term contracts
The Company maintained its solid portfolio of long term partnerships developing further business and providing revenue visibility. Many of these partnerships are expected to continue with additional contracts through 2018 and beyond.
The support of
A maintenance and support contract awarded to
During 2017,
As announced by the Company on
Share buy-back programme and Annual Dividend
On
The Board does not intend to recommend the payment of a dividend.
Financial Performance
Revenue for the year ended
Gross profit for the year ended
Net loss for the fiscal year of
Total operating expenses for the year ended
The Company has recorded a net income tax credit of
As a consequence of the factors above, operating loss for the year ended
As at
Outlook
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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2017 |
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2016 |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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4,868 |
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5,221 |
Short-term bank deposit |
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1,010 |
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1,005 |
Short-term investments |
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1,912 |
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1,913 |
Restricted cash |
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337 |
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- |
Trade receivables, net |
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1,748 |
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2,919 |
Other accounts receivable and prepaid expenses |
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149 |
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61 |
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Total current assets |
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10,024 |
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11,119 |
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NON-CURRENT ASSETS: |
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Restricted cash |
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337 |
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374 |
Long-term prepaid expenses |
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34 |
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39 |
Deferred tax |
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226 |
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223 |
Property, plant and equipment |
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94 |
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111 |
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1,068 |
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1,072 |
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Total non-current assets |
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1,759 |
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1,819 |
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Total assets |
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11,783 |
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12,938 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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2017 |
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2016 |
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EQUITY AND LIABILITIES |
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CURRENT LIABILITIES: |
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Trade payables |
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133 |
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98 |
Deferred revenues |
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401 |
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558 |
Other accounts payable and accrued expenses |
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675 |
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684 |
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Total current liabilities |
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1,209 |
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1,340 |
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NON-CURRENT LIABILITIES: |
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Long-term deferred revenues |
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- |
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38 |
Employee benefit liabilities |
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289 |
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222 |
Other non-current liabilities |
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704 |
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732 |
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Total non-current liabilities |
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993 |
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992 |
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Total liabilities |
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2,202 |
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2,332 |
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EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: |
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Share capital |
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125 |
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125 |
Additional paid-in capital |
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16,639 |
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16,629 |
Accumulated deficit |
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(7,177) |
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(6,144) |
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Total equity attributable to equity holders of the Company |
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9,587 |
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10,610 |
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Non-controlling interests |
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(6) |
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(4) |
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Total equity |
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9,581 |
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10,606 |
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Total liabilities and equity |
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11,783 |
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12,938 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Year ended |
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2017 |
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2016 |
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2015 |
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(except share and per share amounts) |
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Revenues |
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4,335 |
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6,018 |
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6,935 |
Cost of revenues |
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975 |
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1,882 |
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1,534 |
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Gross profit |
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3,360 |
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4,136 |
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5,401 |
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Operating expenses: |
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Research and development |
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2,092 |
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1,714 |
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1,472 |
Selling and marketing |
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1,170 |
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1,092 |
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1,245 |
General and administrative |
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1,056 |
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1,107 |
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1,048 |
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Total operating expenses |
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4,318 |
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3,913 |
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3,765 |
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Operating profit (loss) |
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(958) |
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223 |
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1,636 |
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Finance income |
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126 |
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172 |
|
74 |
Finance expenses |
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125 |
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103 |
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82 |
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Income (loss) before income taxes |
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(957) |
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292 |
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1,628 |
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Income tax benefit |
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3 |
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69 |
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154 |
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Net income (loss) |
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(954) |
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361 |
|
1,782 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Year ended |
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2017 |
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2016 |
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2015 |
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(except share and per share amounts) |
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Net income (loss) |
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(954) |
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361 |
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1,782 |
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Other comprehensive income not to be reclassified to profit or loss in subsequent periods: |
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Remeasurement gain (loss) from defined benefit plan |
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(11) |
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(2) |
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4 |
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Total comprehensive income (loss) |
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(965) |
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359 |
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1,786 |
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Net income (loss) attributable to: |
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Equity holders of the Company |
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(952) |
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365 |
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1,786 |
Non-controlling interests |
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(2) |
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(4) |
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- |
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(954) |
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361 |
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1,786 |
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Total comprehensive income (loss) attributable to: |
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Equity holders of the Company |
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(963) |
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363 |
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1,786 |
Non-controlling interests |
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(2) |
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(4) |
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- |
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(965) |
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359 |
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1,786 |
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Net basic and diluted earnings (loss) per share attributable to equity holders of the Company in |
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(0.02) |
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0.01 |
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0.04 |
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Weighted average number of shares used in computing basic earnings per share (in thousands) |
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51,444 |
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51,097 |
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50,683 |
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Weighted average number of shares used in computing diluted earnings per share (in thousands) |
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51,444 |
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51,319 |
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50,818 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
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Attributable to equity holders of the Company |
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Number of shares |
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Share capital |
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Additional paid-in capital |
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Accumulated deficit |
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Total |
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Non-controlling interests |
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Total equity |
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U .S. dollars in thousands (except share amounts) |
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Balance as of |
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50,079,690 |
|
121 |
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16,350 |
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(7,687) |
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8,784 |
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8,784 |
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Total comprehensive income |
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- |
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- |
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- |
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1,786 |
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1,786 |
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- |
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1,786 |
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Dividend distribution |
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- |
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- |
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- |
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(300) |
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(300) |
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- |
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(300) |
Share-based compensation |
|
- |
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- |
|
65 |
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- |
|
65 |
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- |
|
65 |
Share issuance |
|
285,000 |
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1 |
|
107 |
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- |
|
108 |
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- |
|
108 |
Exercise of stock options |
|
628,464 |
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2 |
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4 |
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- |
|
6 |
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- |
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6 |
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Balance as of |
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50,993,154 |
|
124 |
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16,526 |
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(6,201) |
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10,449 |
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- |
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10,449 |
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Total comprehensive income |
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- |
|
- |
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- |
|
363 |
|
363 |
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(4) |
|
359 |
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|
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Dividend distribution |
|
- |
|
- |
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- |
|
(306) |
|
(306) |
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- |
|
(306) |
Share-based compensation |
|
- |
|
- |
|
65 |
|
- |
|
65 |
|
- |
|
65 |
Share issuance |
|
100,000 |
|
*) - |
|
38 |
|
- |
|
38 |
|
- |
|
38 |
Exercise of stock options |
|
301,035 |
|
1 |
|
- |
|
- |
|
1 |
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- |
|
1 |
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Balance as of |
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51,394,189 |
|
125 |
|
16,629 |
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(6,144) |
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10,610 |
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(4) |
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10,606 |
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Total comprehensive income (loss) |
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- |
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- |
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- |
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(963) |
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(963) |
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(2) |
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(965) |
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|
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|
|
|
|
|
|
|
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Dividend distribution |
|
- |
|
- |
|
- |
|
(70) |
|
(70) |
|
- |
|
(70) |
Share-based compensation |
|
- |
|
- |
|
10 |
|
- |
|
10 |
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- |
|
10 |
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Balance as of December 31, 2017 |
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51,394,189 |
|
125 |
|
16,639 |
|
(7,177) |
|
9,587 |
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(6) |
|
9,581 |
*) Represents an amount lower than $ 1 thousand.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Year ended December 31, |
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2017 |
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2016 |
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2015 |
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Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
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Net income (loss) |
|
(954) |
|
361 |
|
1,782 |
|
|
|
|
|
|
|
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities: |
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Adjustments to the profit or loss items: |
|
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|
|
|
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|
|
|
Depreciation and amortization |
|
55 |
|
87 |
|
88 |
Deferred tax |
|
(3) |
|
(64) |
|
(159) |
Finance income, net |
|
(36) |
|
(71) |
|
(34) |
Share-based compensation |
|
10 |
|
65 |
|
65 |
Change in employee benefit liabilities, net |
|
57 |
|
28 |
|
19 |
|
|
|
|
|
|
|
Changes in asset and liability items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables |
|
1,171 |
|
796 |
|
(3,209) |
Decrease in other accounts receivable and prepaid expenses (including long-term) |
|
(105) |
|
18 |
|
11 |
Increase (decrease) in trade payables |
|
35 |
|
(25) |
|
(30) |
Increase (decrease) in deferred revenues |
|
(195) |
|
22 |
|
(351) |
Increase (decrease) in other accounts payable and accrued expenses |
|
5 |
|
(167) |
|
99 |
|
|
|
|
|
|
|
|
|
994 |
|
689 |
|
(3,501) |
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
40 |
|
1,050 |
|
(1,719) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Year ended December 31, |
||||
|
|
2017 |
|
2016 |
|
2015 |
|
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|
||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in short-term investments |
|
- |
|
- |
|
1,086 |
Increase in restricted cash |
|
(300) |
|
- |
|
- |
Increase in short-term bank deposits |
|
- |
|
(1,001) |
|
- |
Increase in long-term deposits |
|
- |
|
(26) |
|
(2) |
Purchase of property, plant and equipment |
|
(34) |
|
(66) |
|
(16) |
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
(334) |
|
(1,093) |
|
1,068 |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from share issuance |
|
- |
|
*) - |
|
1 |
Exercise of stock options |
|
- |
|
- |
|
5 |
Dividend distribution |
|
(70) |
|
(306) |
|
(300) |
Repayment of refundable grants |
|
11 |
|
25 |
|
- |
|
|
|
|
|
|
|
Net cash used in financing activities |
|
(59) |
|
(281) |
|
(294) |
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
(353) |
|
(324) |
|
(945) |
Cash and cash equivalents at beginning of year |
|
5,221 |
|
5,545 |
|
6,490 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of year |
|
4,868 |
|
5,221 |
|
5,545 |
(a) |
Supplemental disclosure of non-cash financing activities: |
|
|
|
|
|
|
|
Receivable in respect of issuance of shares |
|
- |
|
1 |
|
2 |
|
|
|
|
|
|
|
|
|
Issuance of shares in respect of 2014 annual bonus to directors and employees |
|
- |
|
38 |
|
107 |
*) Represents an amount lower than $ 1 thousand.
This information is provided by RNS
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