08:00 Mon 30 Sep 2019
SimiGon Limited - Half-year Report
("
Interim Results for the six months ended
Financial Highlights
· Revenues increased by 12% to
· Operating loss decreased by 32% to
· Loss decreased by 39% to
· Basic and diluted loss per share of
· Cash, cash equivalent, short term investment and deposits of
· Trade receivables decreased by 9% to
Operational Highlights
· During the Period,
o Secured additional
o Signed a Blanket Purchase Agreement with the
o Secured an additional year of software and hardware warranties and support services for the United States Air Force T-6A Level 5
· Continued to support major military flight training programmes including:
o The USAF Air Education and Training Command Undergraduate Remotely Piloted Aircraft Training ("URT");
o Support for Lockheed Martin's
o Provide software and services as part of long-term relationship with a strategic European customer.
· Completed multiple delivery milestones for the
· During the Period,
Post Period Events (previously announced)
· Awarded a strategic contract by the
·
·
· Successful completion of systems delivery milestones for
· Awarded a BPA from the USAF for the supply of VR and MR Systems.
·
· Appointment of a Chief Operating Officer of
The Company is executing its strategy to deliver program milestones of long-term strategic contracts and continuing to position itself in the market as a leading technology provider for VR and MR training solutions. We entered 2019 with more clients, more partners, stronger technology and greater utilization of our SIMbox technology across more domains than any other year in our history.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
Enquiries:
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+1 (407) 951 5548 |
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finnCap (NOMAD & Broker) |
+44 (0) 207 220 0500 |
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Overview
During the Period,
Successful deliveries and advanced proven technology has led
Over the Period, the Company continued its strategic focus on three main areas:
Sustain the baseline - Continue to successfully deliver Distributed Learning Solutions to our core strategic partners worldwide.
Expand market reach - Expand the utilization of our SIMbox technology to multiple domains. This was successfully achieved by targeting several high opportunity markets such as maintenance training providers, commercial equipment operators, as well as training and research labs that utilize SIMbox as part of their research.
Strengthen our technology capabilities - Improve the technological capabilities of the SIMbox technology in order to enable the growth of the Company as detailed above. Beyond the expansion of our graphics engine, simulation and learning management system, we have added and delivered VR solutions to multiple clients around the globe.
The Company's R&D efforts are focused on utilizing commercial, consumer hardware to advance VR, MR and AR technologies for advanced training and simulation, together with continued development of the Company's simulation software development tools, high fidelity Image Generator ("IG"), user monitoring and performance tracking with simulation data analytics. This comprehensive solution developed by
During the Period, revenue was
Operational Review
Markets
Aerospace and defense related industry
The Company's historical core market is the aerospace and defense arena, particularly military aviation, where the Company continues to cement its position as a preferred technology supplier for the world's largest military training programmes. The Company's track record of delivering on time and within budget has led to winning new military-related contracts around the world, as well as serving to further entrench the Company with existing customers into new programmes.
Civilian and Commercial vertical markets
The global smart education and learning market size is expected to reach
Millennials and Generation Z users learning experience is transforming the training industry as students are exposed to digital devices from a young age. Adaptive learning, simulation-based learning, blended learning, and collaborative learning, all part of
The simulation-based learning segment is anticipated to grow at a fast pace, enabling professional organizations and educational institutions to virtually experience real world environments for trainees to practice, navigate, explore, and obtain more information through a virtual medium before they start working on real-life tasks.
Growing awareness among people and rising popularity of smart education are encouraging solution providers to invest in research and development for creating more reliable, better, and cost-effective solutions.
The Company is very excited by increased market opportunities occurring in the civilian and mass consumer training segments being supported with new technologies such as VR and AR.
As an Open System Architecture ("OSA") software framework,
The Company's significant capabilities, proven in the defense sector, are being leveraged to pursue new civilian training contracts. Examples of potential civilian applications well within reach are aircraft maintenance training, civilian UAS training and aircraft deicing technician training.
Marketing
The Company's marketing mix includes digital and print advertising, social media and booths at four industry symposiums, including the 2018 Singapore Airshow, ITEC in
General
The Company continues to further develop its disruptive, baseline, commercial off-the-shelf ("COTS") product with additional top layer application content and capabilities to reach more end users and vertical markets. Targeted verticals such as commercial aviation maintenance training, security training, language training and vocational training have common requirements to the defense-related industries the Company continues to target. Specifically, they are highly regulated, require complex and specialized skill training and have zero tolerance for error.
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
Long term contracts
The Company maintained its solid portfolio of long term partnerships:
Ongoing USAF contracts for the continued maintenance and support including onsite hardware and software support for the sixteen SIMbox-based T-6A Level 5 FTD's.
The Company continues to support and further expanded its long-term relationship with a major existing European customer that it has been supplying with software and services since 2009.
Financial Performance
Revenue for the Period was
Total operating expenses for the Period decreased by 12% to
As a consequence of the factors above, the Company recorded loss for the Period of
Basic and diluted loss per share was to
As at
Outlook
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
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2019 |
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2018 |
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Unaudited |
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Audited |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
|
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3,233 |
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3,143 |
Short-term bank deposit |
|
|
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1,021 |
|
1,014 |
Short-term investments |
|
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1,894 |
|
1,845 |
Short-term restricted cash |
|
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22 |
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278 |
Trade receivables, net |
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2,304 |
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2,571 |
Other accounts receivable and prepaid expenses |
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42 |
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93 |
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Total current assets |
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8,516 |
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8,944 |
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NON-CURRENT ASSETS: |
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Restricted cash |
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559 |
|
559 |
Long-term prepaid expenses |
|
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31 |
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32 |
Property, plant and equipment |
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62 |
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66 |
Right of use assets |
|
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404 |
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- |
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1,068 |
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1,068 |
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Total non-current assets |
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2,124 |
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1,725 |
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Total assets |
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10,640 |
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10,669 |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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2019 |
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2018 |
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Unaudited |
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Audited |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Trade payables |
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187 |
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159 |
Current maturities of lease liability |
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288 |
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- |
Deferred revenues |
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233 |
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327 |
Other accounts payable and accrued expenses |
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738 |
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691 |
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Total current liabilities |
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1,446 |
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1,177 |
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NON-CURRENT LIABILITIES: |
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Lease liabilities |
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125 |
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- |
Employee benefit liabilities |
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311 |
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287 |
Other non-current liabilities |
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704 |
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712 |
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Total non-current liabilities |
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1,140 |
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999 |
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Total liabilities |
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2,586 |
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2,176 |
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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 |
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(105) |
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(105) |
Additional paid-in capital |
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16,650 |
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16,647 |
Accumulated deficit |
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(8,616) |
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(8,174) |
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Total equity attributable to equity holders of the Company |
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8,054 |
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8,493 |
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Non-controlling interests |
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*) - |
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*) - |
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Total equity |
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8,054 |
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8,493 |
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Total liabilities and equity |
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10,640 |
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10,669 |
*) Represents an amount lower than
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Six months ended |
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Year ended |
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2019 |
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2018 |
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2018 |
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Unaudited |
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Audited |
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(except per share data) |
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Revenues |
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2,680 |
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2,395 |
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5,029 |
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Cost of revenues |
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924 |
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546 |
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1,210 |
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Gross profit |
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1,756 |
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1,849 |
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3,819 |
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Operating expenses: |
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Research and development |
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1,101 |
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1,030 |
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2,083 |
Selling and marketing |
|
567 |
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503 |
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1,032 |
General and administrative |
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530 |
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964 |
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1,464 |
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Total operating expenses |
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2,198 |
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2,497 |
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4,579 |
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Operating loss |
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(442) |
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(648) |
|
(760) |
Financial income |
|
88 |
|
52 |
|
27 |
Financial expenses |
|
79 |
|
76 |
|
49 |
|
|
|
|
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Loss before income taxes |
|
(433) |
|
(672) |
|
(782) |
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Income tax expense |
|
- |
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(34) |
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(224) |
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Loss |
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(433) |
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(706) |
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(1,006) |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Six months ended |
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Year ended |
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2019 |
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2018 |
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2018 |
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Unaudited |
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Audited |
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(except per share data) |
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Loss |
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(433) |
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(706) |
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(1,007) |
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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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(9) |
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9 |
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16 |
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Total comprehensive loss |
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(442) |
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(697) |
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(991) |
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Loss attributable to: |
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Equity holders of the Company |
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(433) |
|
(714) |
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(1,013) |
Non-controlling interests |
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- |
|
8 |
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6 |
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|
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|
|
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(433) |
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(706) |
|
(1,007) |
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Total comprehensive loss attributable to: |
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Equity holders of the Company |
|
(442) |
|
(705) |
|
(997) |
Non-controlling interests |
|
- |
|
8 |
|
6 |
|
|
|
|
|
|
|
|
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(442) |
|
(697) |
|
(991) |
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|
|
|
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Basic and diluted loss per share attributable to equity holders of the Company (in |
|
(0.01) |
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(0.01) |
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(0.02) |
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Weighted average number of shares used in computing basic and diluted loss per share (in thousands) |
|
51,018 |
|
51,399 |
|
51,259 |
INTERIM CONDENSED 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 |
|
51,394,189 |
|
125 |
|
16,639 |
|
- |
|
(7,177) |
|
9,587 |
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(6) |
|
9,581 |
|
|
|
|
|
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|
|
|
|
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Total comprehensive loss |
|
- |
|
- |
|
- |
|
- |
|
(997) |
|
(997) |
|
6 |
|
(991) |
Purchase of |
|
(535,571) |
|
- |
|
- |
|
(105) |
|
- |
|
(105) |
|
- |
|
(105) |
Share-based compensation |
|
- |
|
- |
|
8 |
|
- |
|
- |
|
8 |
|
- |
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of |
|
*) 50,858,618 |
|
125 |
|
16,647 |
|
(105) |
|
(8,174) |
|
8,493 |
|
**) - |
|
8,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
- |
|
- |
|
- |
|
- |
|
(442) |
|
(442) |
|
- |
|
(442) |
Share issuance |
|
5,000 |
|
**) - |
|
1 |
|
- |
|
- |
|
1 |
|
- |
|
1 |
Share-based compensation |
|
- |
|
- |
|
2 |
|
- |
|
- |
|
2 |
|
- |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of |
|
*) 50,863,618 |
|
125 |
|
16,650 |
|
(105) |
|
(8,616) |
|
8,054 |
|
**) - |
|
8,054 |
*) Includes a total of 535,571 shares held in treasury.
**) Represents an amount lower than
|
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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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|
|
|
|
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|||
Balance as of |
|
51,394,189 |
|
125 |
|
16,639 |
|
- |
|
(7,177) |
|
9,587 |
|
(6) |
|
9,581 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total comprehensive loss |
|
- |
|
- |
|
- |
|
- |
|
(705) |
|
(705) |
|
8 |
|
(697) |
|||
|
|
- |
|
- |
|
- |
|
(53) |
|
- |
|
(53) |
|
- |
|
(53) |
|||
Share-based compensation |
|
- |
|
- |
|
5 |
|
- |
|
- |
|
5 |
|
- |
|
5 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Balance as of |
|
*) 51,394,189 |
|
125 |
|
16,644 |
|
(53) |
|
(7,882) |
|
8,834 |
|
2 |
|
8,836 |
|||
*) Includes a total of 535,571 shares held in treasury.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Six months ended |
|
Year ended |
||
|
|
2019 |
|
2018 |
|
2018 |
|
|
Unaudited |
|
Audited |
||
|
|
|
||||
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
Loss |
|
(433) |
|
(706) |
|
(1,007) |
Adjustments to reconcile loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and expenses not involving operating cash flows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
159 |
|
22 |
|
46 |
Deferred tax |
|
- |
|
39 |
|
226 |
Financial income, net |
|
(57) |
|
9 |
|
64 |
Share-based compensation |
|
2 |
|
5 |
|
8 |
Change in employee benefit liabilities, net |
|
15 |
|
2 |
|
15 |
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in trade receivables |
|
267 |
|
(403) |
|
(823) |
Decrease in other accounts receivable and prepaid expenses |
|
52 |
|
64 |
|
59 |
Increase (decrease) in trade payables |
|
27 |
|
(25) |
|
26 |
Decrease in deferred revenues |
|
(94) |
|
(88) |
|
(74) |
Increase (decrease) in other accounts payable and accrued expenses |
|
52 |
|
37 |
|
- |
|
|
|
|
|
|
|
|
|
423 |
|
(338) |
|
(453) |
|
|
|
|
|
|
|
Net cash used in operating activities |
|
(10) |
|
(1,044) |
|
(1,460) |
*) Represents an amount lower than $ 1 thousand.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Six months ended June 30, |
|
Year ended December 31, |
||
|
|
2019 |
|
2018 |
|
2018 |
|
|
Unaudited |
|
Audited |
||
|
|
|
||||
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Decrease (increase) in restricted cash |
|
256 |
|
299 |
|
(164) |
Increase in long-term deposits |
|
- |
|
(2) |
|
(2) |
Purchase of property, plant and equipment |
|
(15) |
|
(10) |
|
(16) |
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
241 |
|
234 |
|
(182) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Repayment of lease liabilities |
|
(142) |
|
- |
|
- |
Proceed from share issuance |
|
1 |
|
- |
|
- |
Purchase of treasury shares |
|
- |
|
(53) |
|
(105) |
Receipt of refundable grants |
|
- |
|
22 |
|
22 |
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
(141) |
|
(31) |
|
(83) |
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
90 |
|
(788) |
|
(1,725) |
Cash and cash equivalents at beginning of period |
|
3,143 |
|
4,868 |
|
4,868 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
3,233 |
|
4,080 |
|
3,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash activities: Right-of-use assets and corresponding lease liabilities |
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58 |
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