Final Results

RNS Number : 9797D

Seeing Machines Limited

23 September 2008

 



23 September 2008

Seeing Machines Limited

('Seeing Machines' or the 'Company')

Final Results for the year ended 30 June 2008

Seeing Machines Limited (AIM: SEE), a leading developer of advanced computer based imaging software systems, announces final results for the year ended 30 June 2008, revealing strong revenue growth and maiden profits.

Financial Highlights

• Revenue up 55% to A$4.40 million (2007: A$2.84 million);

• Maiden profits of A$327k (2007: Loss before tax of A$467k);

• Earnings per share of 0.11 cents (2007: Loss per share of 0.18 cents);

• Cash reserves at 30 June 2008 of A$2.77 million (30 June 2007 A$1.38 million).

Operational Highlights

• Successful secondary placing in October 2007 raising A$3.20m to fund product commercialisation;

• faceLAB® achieved record sales figures of A$2.51m (2007: A$2.04m);

• Long term contract signed with Dycom Industries for Driver State Sensor (DSS);

• Progress made towards securing a commercial partner to produce an OEM version of the DSS;

• Release of faceLAB® 4.5 targeted at precision gaze applications;

• FDA marketing clearance for the TrueField Analyzer®;

• Established a North American operation.

Fulton Muir, Chairman, stated. 'The 2008 financial year, with its significant revenue diversification and revenue growth along with our maiden profit was a tremendous result for the company and provides a strong foundation for our forward development. In the current financial year we are aiming to build on these recent successes with further strong sales of faceLAB® and the DSS and the launch of faceAPI and the TrueField® Analyzer'.

The Seeing Machines Annual Report for 2007-2008 including the audited Financial Statements is available for download from the investor section of the Company's website  www.seeingmachines.com. The Annual Report will be mailed to shareholders in October 2008 along with details of the Company's Annual General Meeting in November.  

The Directors Report Review of Operations and the Balance Sheet, Income Statement, Statement of Recognised Income and Expense and Cashflow Statement are set out below.  

Enquiries:

Seeing Machines Limited	Grant Thornton UK LLP	SVS Securities plc	Parkgreen Communications Ltd
Nick Cerneaz, CEO	Fiona Owen	Peter Manfield	[phone]
[phone]	[phone]	[phone]	Paul McManus:      [phone]
www.seeingmachines.com			Ben Knowles:      [phone]

Review of Operations

Financial Results

Total revenue for the year increased 55% to A$4,399,747 (2007: A$2,844,763). Revenue from sale of goods was A$3,880,726, an increase of 90% over the previous year (A$2,042,427). Contract income of A$247,046 (2007: A$603,077) is down due to the AutoCRC project having a reduced budget for 2008. Contract work from other areas has increased during the year. Other income was $A271,975 up from A$199,259 in the previous year due to higher grant income and interest earned on larger cash deposits.

Net expenditure for the year was A$4,073,003 up by A$761,287 on the prior year (A$3,311,716). Cost of sales increased A$383,457 to A$944,512 (2007: $561,055) and this was directly attributable to the increased revenue from products including faceLAB® and the Driver State Sensor (DSS). Marketing and travel costs increased during the year in support of the faceLAB® and DSS businesses. The Company also established an operation in North America in April 2008 to take advantage of the increased commercialisation opportunities for the DSS in the private fleet and mining markets.

The Company has capitalised development costs in line with the accounting standards.

The Company achieved a net profit of A$326,744 for the year ended 30 June 2008. This result is the maiden profit reported by the Company and is an improvement of A$793,697 on the prior year (2007: (A$466,953)). The profit is largely due to the revenue performance of the faceLAB® and DSS businesses and tight control of expenditure. faceLAB® achieved sales of A$2,510,410 its highest sales year to date and the DSS achieved sales of A$1,429,793.

The Company had A$2,771,247 in cash at 30 June 2008 compared to A$1,375,428 at 30 June 2007. The Company completed a secondary placing in October 2007 raising A$3,199,282 to fund its product commercialisation activities. Net assets increased to A$7,090,437 at 30 June 2008 compared to A$3,268,429 at 30 June 2007. This increase is largely due to the increase in cash and trade receivables and capitalised development costs.

Operational Highlights

Highlights for the year ended 30 June 2008 included:

• achieving the Company's maiden profit of A$326,744;

• the success of the secondary placing which secured a further A$3,199,282 to fund product commercialization;

• the further investment of key shareholders in the secondary placing particularly the Australian National University and Volvo Technology AB;

• faceLAB® achieved record sales figures of A$2,510,410 for the year;

• the long term contract signed with Dycom Industries for their use of the Company's driver monitoring technology the DSS;

• the initial commercial success of the DSS providing revenue of A$1,429,793 and a strong foundation for future growth of the DSS business particularly in the private fleet and mining markets;

• the progress made towards securing a commercial partner to produce an OEM version of the DSS product;

• revenue diversification strategy starting to pay off with revenue from multiple product sources achieved during the year;

• release of a significant new version of faceLAB® 4.5 targeted at precision gaze applications;

• the progress made towards producing a marketable product in the TrueField Analyzer®;

• marketing clearance from the United States Food and Drug Administration (FDA) for the TrueField Analyzer®;

• reception given to the TrueField Analyzer® at the American Academy of Ophthalmology Annual Meeting in New Orleans in November 2007 and the Association for Research in Vision and Ophthalmology (ARVO) meeting in New Orleans in April;

• establishment of North American operation and appointment of Dean Croke as Vice President North American Automotive Business;

• the appointment of Chris McKee as Chief Financial Officer adding significant skills to the Company's management team.  

faceLAB®

The 2008 financial year was another record year for the Company's original product faceLAB® with sales in excess of A$2.5 million.  

faceLAB® 4.5 was debuted at the Driving Assessment Conference in Washington State in July 2007. This version of faceLAB® introduced a new class of precision gaze algorithms initially developed for the Truefield Analyzer® (TFA). The algorithms bring dramatic improvements to the performance and accuracy of faceLAB® when used to track gaze direction on computer and video screens particularly for applications such as website usability analysis and market research.  

In July 2008 we released faceLAB® 4.6 which adds linked precision functionality allowing multiple faceLAB® systems to be linked together in precision mode.  

During the year faceLAB was sold to organizations on 4 continents including:

• Canon Information Systems Research;

• United States Department of Homeland Security;

• Honda R&D Europe UK Limited;

• Naval Postgraduate School;

• SAS Institute Inc;

• Toyota;

• Wright Patterson Air Force Base;

• NASA AMES Research Center;

• Mitsubishi Electric Research Laboratories;

• Michigan Technological University.

Driver State Sensor (DSS)

The growth in the DSS business this year has been excellent with revenue of A$1,429,793. This growth is very significant and it means that we are able to report our maiden profit. It is also the first year where we have had significant revenue from products other than faceLAB® and we expect the DSS revenue growth to exceed faceLAB® revenue growth in future years.

This growth is directly related to the maturing of both the Seeing Machines technology and the maturing of the market into which the DSS is being sold. The levels of performance and the reliability and robustness of the DSS in all manner of driving conditions make it a superior choice for driver monitoring systems for the detection of fatigue and distraction.  

In March of 2008 we announced the largest commercial deal in the Company's history with Dycom Industries Inc for use of the DSS technology in their Vehicle Information System. This agreement is long term and includes:

• an enterprise license for the use of Seeing Machines driver monitoring software; 

• long term support and maintenance services; 

• the provision of custom hardware; 

• training and consulting services.  

A further agreement with Dycom Industries Inc was signed at the same time that allows for the combined technology to be offered to others following the initial deployment at Dycom.

In April this year we established a North American operation and appointed Dean Croke as the Vice President of North American Automotive Business. The North American operation will enable us to move forward more quickly with the significant commercial opportunities for the DSS across the region and it will also enable us to better support existing customers.  

We have also continued to work with and progress with Hella KGaA Hueck & Co the development of technology for the OEM market. This will continue during 2009.

In June this year we received the first of an order for 8 systems to supply the DSS into Swedish Michigan Naturalistic Field Operational Test (SeMiFOT). SeMiFOT will be followed by a larger European FOT and the Company should be well placed to supply systems into this FOT as well.

Seeing Machines is aggressively pursuing commercial opportunities for the DSS including:

• OEM opportunities Hella KGaA Hueck & Co for both passenger and commercial vehicles;

• opportunities to sell the DSS into large private truck fleets such as Dycom Industries Inc and we have trial systems installed in several North American locations;  

• opportunities to sell the DSS into mining and other operations concerned with fatigue and distraction in the operator and we have systems already installed in a number of mining sites;

• opportunities to sell further DSS systems into Field Operational Tests (FOTs) particularly in the United States and Europe;

• further sales to research organizations.

TrueField Analyzer®

During the year we continued to progress the development of the Truefield Analyzer® (TFA) in order to bring this key product to market. All streams of this project were progressed during the year including:

• scientific trials;

• large scale clinical studies;

• regulatory approval;

• IP Protection (including trademarks in several jurisdictions);

• industrial design and hardware development;

• software development; and

• commercialisation activities.

In August 2007 we received marketing clearance from the United States Food and Drug Administration (FDA) and in November the TFA was showcased at the American Academy of Ophthalmology Annual Meeting in New Orleans.  

There has been significant progress on the scientific front and we are about to start the final phase of work required to launch the product including the collection of a large normative database required in the production version and independent clinical studies.

The next major outing for the TFA will be at the American Academy of Ophthalmology Annual Meeting in Atlanta in November 2008.  

Several opportunities to bring the product to market with large OEMs are being progressed.  

faceAPI™

Seeing Machines has progressed the development of its faceAPI® product, specialized image-processing software for developers that turns a web-camera into a 3D face-tracking device. A significant new release has been under development and was announced August 25th 2008 at the Nvidia Nvision conference in San Jose California.  

The new release of the faceAPI boasts a large number of new features and improvements. One of the major additions is the unique ability to track lip and eyebrow movements, enabling games and virtual worlds to read a user's facial expression, as well as head orientation and movement.

These face-tracking capabilities are being developed for applications ranging from enhanced 3D effects and increased interactivity in video games to real-time avatar animation in virtual worlds.

We expect this version of the faceAPI to be the springboard for the commercial success of this product.  

James Fulton Muir	Nick Cerneaz
Chairman	Chief Executive Officer

Balance Sheet

As at 30 June 2008
		Consolidated		Parent
		2008	2007	2008	2007
	Note	A$	A$	A$	A$
ASSETS
Current Assets
Cash and cash equivalents	11	2,771,247	1,375,428	2,765,564	1,375,428
Trade and other receivables	12	866,949	350,813	872,458	350,813
Inventories	13	288,243	136,571	288,243	136,571
Derivative financial instruments	14	12,297	-	12,297	-
Other		77,611	34,825	77,611	34,825
Total Current Assets		4,016,347	1,897,637	4,016,173	1,897,637
Non-current Assets
Investments in subsidiaries	15	-	-	174	-
Property, plant and equipment	16	259,906	244,953	259,906	244,953
Intangible assets	17	357,307	277,962	357,307	277,962
Capitalised development costs	17	5,849,250	3,719,471	5,849,250	3,719,471
Other		-	3,586	-	3,586
Total Non-current Assets		6,466,463	4,245,972	6,466,637	4,245,972
TOTAL ASSETS		10,482,810	6,143,609	10,482,810	6,143,609
LIABILITIES
Current Liabilities
Trade and other payables	18	1,053,638	756,736	1,053,638	756,736
Government grants	19	2,221,018	1,661,193	2,221,018	1,661,193
Total Current Liabilities		3,274,656	2,417,929	3,274,656	2,417,929
Non-Current Liabilities
Provisions	20	117,717	97,251	117,717	97,251
Total Non-Current Liabilities		117,717	97,251	117,717	97,251
TOTAL LIABILITIES		3,392,373	2,515,180	3,392,373	2,515,180
NET ASSETS		7,090,437	3,628,429	7,090,437	3,628,429
EQUITY
Contributed equity	21	9,646,776	6,553,932	9,646,776	6,553,932
Accumulated losses	22	(3,278,481)	(3,605,225)	(3,278,481)	(3,605,225)
Other reserves	22	722,142	679,722	722,142	679,722
TOTAL EQUITY		7,090,437	3,628,429	7,090,437	3,628,429

Income Statement

For the year ended 30 June 2008
		Consolidated		Parent
		2008	2007	2008	2007
	Note	A$	A$	A$	A$
Continuing operations
Sale of goods		3,880,726	2,042,427	3,880,726	2,042,427
Contract Income		247,046	603,077	247,046	603,077
Other Revenue	6	271,975	199,259	271,975	199,259
Revenue		4,399,747	2,844,763	4,399,747	2,844,763
Cost of sales		(944,512)	(561,055)	(944,512)	(561,055)
Employee benefits expenses	7	(1,486,082)	(1,395,088)	(1,486,082)	(1,395,088)
Depreciation and amortisation expense	7	(355,088)	(286,947)	(355,088)	(286,947)
Other expenses	7	(1,287,321)	(1,068,626)	(1,287,321)	(1,068,626)
Profit (Loss) before income tax		326,744	(466,953)	326,744	(466,953)
Income tax expense	8	-	-	-	-
Net Profit (Loss) for the period		326,744	(466,953)	326,744	(466,953)
		Cents	Cents
Earnings per share for profit attributable to the ordinary equity holders of the company:	10
Basic earnings per share		0.111	(0.182)
Diluted earnings per share		0.111	(0.182)

Statement of Recognised Income and Expense

For the year ended 30 June 2008
		Consolidated		Parent
		2008	2007	2008	2007
	Note	A$	A$	A$	A$
Cash flow hedges - gain taken to equity		12,297	-	12,297	-
Net Income recognised directly in equity	22	12,297	-	12,297	-
Profit (Loss) for year		326,744	(466,953)	326,744	(466,953)
Total recognised income and expenses for the year		339,041	(466,953)	339,041	(466,953)

Cashflow Statement

For the year ended 30 June 2008
		Consolidated		Parent
		2008	2007	2008	2007
	Note	A$	A$	A$	A$
Cash flows from operating activities
Receipts from customers (inclusive of GST)		3,688,380	3,232,553	3,688,380	3,232,553
Grants received (inclusive of GST)		754,337	1,301,390	754,337	1,301,390
Payments to suppliers and employees (inclusive of GST)		(3,666,404)	(3,016,722)	(3,671,913)	(3,016,722)
Interest received		118,682	87,902	118,682	87,902
Net cash flows from operating activities	23	894,995	1,605,123	889,486	1,605,123
Cash flows from investing activities
Proceeds from sale of plant and equipment		1,586	-	1,586	-
Purchase of plant and equipment		(140,505)	(150,707)	(140,505)	(150,707)
Purchase of intangibles		(104,553)	(76,762)	(104,553)	(76,762)
Costs incurred on research and development		(2,334,396)	(2,424,279)	(2,334,396)	(2,424,279)
Acquisition of subsidiary	24	-	-	(174)	-
Net cash flows used in investing activities		(2,577,868)	(2,651,748)	(2,578,042)	(2,651,748)
Cash flows from financing activities
Proceeds from issue of shares		3,199,282	15,000	3,199,282	15,000
Transaction costs on issue of shares		(106,438)	-	(106,438)	-
Net cash flows from financing activities		3,092,844	15,000	3,092,844	15,000
Net increase/(decrease) in cash and cash equivalents		1,409,971	(1,031,625)	1,404,288	(1,031,625)
Net foreign exchange differences		(14,152)	-	(14,152)	-
Cash and cash equivalents at the beginning of the period		1,375,428	2,407,053	1,375,428	2,407,053
Cash and cash equivalents at end of period	11	2,771,247	1,375,428	2,765,564	1,375,428

Ends

 

END

 

 

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