AGM and Business Update

RNS Number : 9429T

Seeing Machines Limited

14 December 2011

 



14 December 2011

Seeing Machines Limited

("Seeing Machines" or the "Company")

Annual General Meeting and Business Update

Seeing Machines Limited (AIM: SEE), a leading developer of facial image processing software for applications that rely on understanding the movement of human faces and eyes, announces that at its Annual General Meeting ("AGM") held today in Canberra all resolutions were duly passed. A copy of the notice of meeting with details of the resolutions is available from the Company's website www.seeingmachines.com.

During the AGM, the Chairman, Bill Mobbs and CEO, Ken Kroeger addressed the meeting. Highlights and full transcripts of the statements made by the Chairman and the CEO follow below and are also available on the Company's website.

Highlights

DSS            - now the accepted leader in fatigue detection and management arena for mining vehicles

                    - growing pipeline with site-wide deployments the expected norm going forward

                    - expanded offering and new services and more ruggedised platform to be available shortly

faceAPI    - strong interest from consumer electronic OEMs,  automotive and advertising industries

- several production licenses signed including one with the advertising industry

faceLAB    - 12-month development underway of next generation product

Truefield  - final trials underway with discussions with commercial partners expected in New Year

Ken Kroeger, CEO of Seeing Machines commented: "Our focus for 2012 will be on building stronger marketing and sales capability around all products in order to capitalise on the many opportunities we are currently encountering. In addition, we will look to leverage our relationships with alliance partners in order to reach broader markets and thereby increase revenues. Our current pipeline of business gives us confidence that 2012 will see the Company move into profitability."

Chairman's Address

Welcome to the Seeing Machines Annual General Meeting for 2011. Firstly I will address the meeting and then I will hand over to our relatively new CEO Ken Kroeger, who took over the role at the beginning of July. I will concentrate largely on the 2011 financial year and Ken will focus on our plans for the future to grow revenue, deliver a profit and ultimately to provide a return to our loyal investors. At the end of these addresses we will be happy to take any questions you may have on these addresses or any other matters.

Seeing Machines started off the 2011 financial year with a significant number of orders for its DSS product that provided a sound basis for revenue in 2011 especially during the first half of the year.  We saw record revenue of $4.019 million for the half year to 31 December and again record revenue of $7.161m for the full year to 30 June 2011. Despite this  growth, revenue for the full year was below what we would have expected with the second half not as strong as the first. One reason for this was that a significant project in Indonesia, which was expected to occur in the second half of the year, was delayed until this year. This site, when fully deployed, will be the largest DSS installation in the world. 

2011 was the year in which the Company believed it would move into profitability but this proved not to be the case due to the lower than expected revenue and the costs associated with establishing the DSS globally.

The Company has a number of significant DSS opportunities which we are expecting to convert this year along with a host of opportunities across the other areas of our business which Ken will discuss.  There are plenty of opportunities in the faceAPI space and we are also looking forward to a rejuvenation of our offering in the research space with the development of faceLAB X and our close partnership with EyeTracking Inc. We may even have some good news regarding the long anticipated release of the Truefield product later in the year. However we are not factoring this into our expectations at this point.

During the year we have seen a number of changes to the Board with the resignation of Fulton Muir as a director in February and the resignation of Dr Nick Cerneaz when his term as CEO ended at the beginning of July. Fulton was a founding director of the Company and was Chairman from 2003 to 2009. My focus as Chairman has been to ensure that the Company has the right strategy and management in place to deliver on its potential and, to this end, securing a CEO with the right background and credentials was a key task. I believe, with the appointment of Ken Kroeger as the CEO at the beginning of July, that we have found the right person to steer the Company in the direction for success. Ken is an accomplished entrepreneur and his background in technology, R&D, business management and international sales and marketing provide Seeing Machines with the strong commercial focus needed. 

I'd like to take this opportunity to announce that I will be stepping down as Chairman at the end of this month due to the time required by my other business commitments and that the Board has decided that at least initially Mr David Gaul a longstanding director and highly successful Canberra technology entrepreneur will take over as Chairman from the 1st of January 2012. 

The Board also intends to appoint Mr Ken Kroeger as a Director and into the role of Managing Director pending completion of the processes required for AIM.

Before handing over to Ken, to cover in more detail the opportunities for the business and its products, I would like to take this opportunity to thank the entire team at Seeing Machines, including our shareholders, my fellow directors, and our staff. I strongly believe in the enormous potential for Seeing Machines and I look forward to us continuing to work together as a team to further build the business and deliver our growth objectives.

Bill Mobbs
Chairman
14 December 2011

CEO Address

Thank you very much for the opportunity to present to you here at the AGM and for your continued vested interest in the organisation.

It has been nearly six months since my start with Seeing Machines. I came here with an open mind and must convey that I am very impressed with the potential held within the Company. We have a terrifically talented group of people and a suite of intellectual properties that are world-class. On arrival, I first spent time learning about the business - including its people, the industry sectors that we service and the technologies that we promote and sell. I have met with customers, investors, partners and potential partners and have worked hard to become part of the Company. Working in all aspects of the business to my fullest ability I have also been made very welcome by all at Seeing Machines.

As you know, the organisation is home to four products, three that are commercial and one that is in its final rounds of testing as we speak.

I would now like to provide you with some insight into the direction and strategy for our commercial offering.

Starting with faceAPI, this is the product that represents our core foundation technology kernel; the (technology) engine will eventually drive all of the things that we do at Seeing Machines. The current version of the software predominantly captures the users' head position and basic facial characteristics including eyes, lips and eyebrows. In order to increase the commercial interest in faceAPI, we are working to both increase the application's features and make it available to work on a wide variety of hardware platforms.

Commercially, we are receiving significant interest across a variety of industries including consumer electronic OEMs, automotive and advertising, and are talking to some of the major silicon companies about how they could benefit from licensing faceAPI into their products - making the built in camera a new genre of input device. Seeing Machines has recently signed two commercial license agreements including one with an advertising companies that will use the technology for digital billboards. We expect more of these types of agreements to be put in place, generating recurring revenues that can go straight to the bottom line.

Next, I'd like to talk about faceLAB, the Company's original eye tracking technological product used extensively by researchers worldwide. faceLAB has been a strong year-on-year performer for some time now, but has recently been surpassed by our competitors. To rectify this situation, we are commencing a ground-up redesign of the technology. This will be done over the next 12 months and will be developed in conjunction with the American company, Eye Tracking Inc. whose analytical software we currently bundle and distribute with faceLAB. We strongly believe that we can create a new product that moves eye tracking to the next level and repositions Seeing Machines firmly as the leader in the field.

Now on to DSS which is currently the major revenue generator in our commercial offering. As you know, DSS has been formally tested by a large number of global mining companies over the last year. It is clear that these trials have now positioned DSS as the accepted leader in the mine truck operator, fatigue detection and management arena. As a result, the DSS sales pipeline continues to grow and sales discussions are often focused on fleet-wide haul truck implementation strategies.  We will shortly release a new ruggedised DSS hardware platform designed specifically to meet the demands of the mining environment, which we believe overcomes any hardware reliability issues that have slowed us down in the past. This will allow us to further focus primarily on developing new opportunities rather than addressing outstanding issues.

In parallel, we have extended the DSS offering to include DSSi, an electronic performance monitoring and measurement capability that converts DSS data into usable information for our mining customers. DSSi will generate recurring revenue from those that use these services and reduce our reliance on new DSS unit sales. 

We've expanded our geographic coverage through additional sales and services staff and through the appointment of distributors for Africa and Latin America. These distributors are now starting to see initial business flowing on from the site trials that they have been managing.

In 2012, we will make available professional fatigue management services to existing DSS and non-DSS customers. These services will help customers implement and manage their fatigue management programmes more effectively, help extract the full value from the DSS enabled vehicles and help non-DSS customers better understand the benefits of in-vehicle fatigue detection and management.

I look forward to a steady stream of announcements about the new DSS business that we close over the remainder of the 2012 financial year and beyond.

The fourth product is Truefield, an ophthalmological medical device that is currently going through its final field trials as we speak. By early next year, we will have a clear indication of the device's accuracy and commercial potential. At this point, we are reassured by our research partner, the Research School of Biology at the Australian National University, that the testing is on track and that the technology will be able to not only detect the early onset of Glaucoma but also Age Related Macular Degeneration and Diabetic Retinopathy. While we believe their views to be accurate, we also recognise that the ability to detect these additional conditions will require further validation and testing. With Truefield, we expect to commence strategic discussion with potential commercialisation partners in the New Year.

As a result of these many developments and opportunities our road to profitability is now becoming clear.

While the sales cycle for DSS is longer than one would like, the mining industry and OEM equipment suppliers are indicating that DSS is the preferred technology for the management of fatigue within the sector. It is therefore expected that fleet-wide sales or enterprise-wide pricing and service agreements will become the norm for us. We are in the process of building a product strategy to take the technology back into the road transport industry and are working with stakeholders to make this happen.

faceAPI will continue to attract increased license revenue through "glasses free 3D" and new yet to be thought of applications and we are hopeful that we will be in a position to announce a major new license agreement early next year.

While the redevelopment of faceLAB will take us well into 2012, the current version will continue to generate sufficient revenue to fund the sales and development teams.

Our focus will remain commercial going forward and will include building stronger marketing and sales capability around all products and leveraging relationships with alliance partners in order to reach broader markets and thereby increase revenues and profitability.

Ken Kroeger,
Chief Executive Officer
14 December 2011

Enquiries:

Seeing Machines Limited
Ken Kroeger, CEO	[phone]
Daniel Stewart & Company plc (Nomad & Broker)
David Hart	[phone]
Walbrook PR Ltd	[phone]
Bob Huxford	[e-mail]
Helen Westaway	[e-mail]

 

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