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EVSNF FINRA Deleted Symbol
http://otce.finra.org/DLDeletions
Merger/Acquisition
"Shareholders of Elbit Vision Systems Ltd. (EVSNF) will receive $3.40 for each share of Elbit Vision Systems Ltd."
Great notes, thank you, rado.
Some notes from the CC.
They mentioned being excited about future growth many times.
They said they have an increase in order levels from all regions including China that was weak.
They expect sales pace to return to former pace.
The US continues to grow
One of the largest non-woven muli-nationals in the world got first order in what the client called their "global rollout plan".
They expect this to be significant in 2018
A question was posed asking about who they were, but they declined to answer as they have found that many potential competitors listen to the CC and they prefer to expose as little information as possible.
They have done an extensive evaluation with them. It took them 1 year when it was expected to take 1 or 2 months, but now it is done.
They believe it will be a standard part in their mfr operations.
Asked about new hiring they said it is hard to say about hiring.
In January show they will attend a large home retailer show in Frankfurt.
They said they have some big orders, not sure if they will be in this quarter or next quarter.
They are now moving into denim.
They have a lend-and-extend approach where they are getting new software ideas from each new client they pick.
Selective about partnering with their clients to go into an area where the client helps them with product development.
They showed confidence that noone can touch their technology.
Gross margin went down because they decided to have more trials.
They realized they need to be more aggressive in putting more trials.
The engineers were confident they could handle more trials.
CEO said "Instead of having 5 trials we can have 20."
It takes more time and resources, but eventually it's working.
Currently investing in airbag and printed circuit board glass fabric.
Elbit Vision Systems Announces Third Quarter 2017 Results
Tue December 5, 2017 8:30 AM|GlobeNewswire|About: EVSNF
Q3: 12-02-17 Earnings Summary
News
EPS of $0.04 Revenue of $2.53M (+ 2.0% Y/Y)
Third quarter 2017 highlights
Revenue at $2.5 million, up 10% sequentially;
Gross and operating margins at 50% and 14%, respectively;
Net income of $350 thousand, representing 14% of revenues;
Shareholders’ equity reached $7.1 million with cash and equivalents at $4.0 million;
CAESAREA, Israel, Dec. 05, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTCBB:EVSNF), a pioneer in the science of machine vision inspection for textile fabrics and technical webs, today presented its consolidated financial results for the quarter ending September 30, 2017.
Sam Cohen, CEO of EVS commented, “As we expected, the third quarter shows sequential improvement in our revenues due to a growth in orders across all of our product lines. Although we have seen exciting growth in the US and Europe, slower sales in China have kept our revenues flat. However, November saw some significant successes in iBar trials with customers in Asia and we believe this will improve our results in the upcoming quarters in Asia.
We know from our customers that for EVS to realize its full potential, we must continue to improve our capabilities and expand our features. To that end we have hired new skilled field engineers and increased our software development team.”
Third Quarter 2017 Results
Revenues for the quarter were $2.5 million, a 2% increase over the $2.5 million reported in the third quarter of last year and a 10% increase compared to the $2.3 million reported in the previous quarter.
Gross profit for the quarter was $1.3 million, representing 50.0% of revenues. This is compared to $1.4 million for the third quarter of 2016, which represented 54.9 % of revenues and $1.3 million as reported in the previous quarter.
Operating income for the quarter was $343 thousand (13.6% of revenue), compared to $554 thousand (22.3% of revenues) in the third quarter of 2016 and $427 thousand (18.7% of revenues) as reported in the previous quarter. The lower level of operating income in the quarter was due primarily to increase R&D and sales and marketing expenses.
Net income was $350 thousand (13.9% of revenue), compared to $528 thousand (21.3% of revenues) in the third quarter of 2016 and $396 thousand (17.4% of revenues) in the prior quarter.
Conference call details
The Company will also host a conference call later today at 9:00 am ET. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 888 668 9141 at 9am Eastern Time
Israel: 03 918 0609 at 4pm Israel Time
International: +972 3 918 0609
For those unable to participate, the teleconference will be available for replay on Elbit Vision Systems’ website at http://www.evs.co.il/ beginning the day after the call.
About Elbit Vision Systems Ltd. (EVSNF) (EVS): www.evs.co.il
Elbit Vision Systems Schedules Third Quarter 2017 Results Release for December 5, 2017
CAESAREA, Israel, Nov. 27, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (EVSNF), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced that it would be releasing its financial results for the third quarter of 2017 on Tuesday, December 5, 2017 before the US markets open.
The Company will also host a conference call the same day, Tuesday, December 5, starting at 9 am ET. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 888 668 9141 at 9 am Eastern Time
Israel: 03 918 0609 at 4 pm Israel Time
International: +972 3 918 0609
For those unable to participate, the teleconference will be available for replay on Elbit Vision Systems’s website at http://www.evs.co.il/ beginning 24 hours after the call.
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
EVS offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. EVS' systems are used by over 800 customers, many of which are leading global companies.
This press release and other releases are available on www.evs.co.il
I looked at some of your results from a few months ago and it looks like alot of your trades worked out. What is your trading strategy?
EVS Receives Order From Taiwan for Multiple Systems
CAESAREA, Israel, Sept. 19, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTC:EVSNF), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced today that it has received an order that totaled over $650,000 from a Taiwanese customer.
The order, which contained both IQ-TEX4 and SVA systems, was placed by a customer which had previously bought a single IQ-TEX4 system. The systems will be installed in factories in both Taiwan and the United States during 2017.
Sam Cohen, CEO of EVS, commented, “We are very pleased with this follow-on order from a very important and influential customer. Their positive experience with our systems and the quick return on their investment demonstrates how an initial penetration of our technology leads to a strong, lasting partnership. ”
Elbit Vision Systems (EVSNF) CEO Sam Cohen on Q2 2017 Results - Earnings Call Transcript
Aug. 11, 2017 2:15 PM ET| About: Elbit Vision Systems Ltd. (EVSNF)
Q2: 08-05-17 Earnings Summary
Press Release News
Elbit Vision Systems Ltd. (OTCQB:EVSNF) Q2 2017 Earnings Conference Call August 9, 2017 10:00 AM ET
Executives
Ehud Helft - GK Investor Relations
Sam Cohen - CEO
Yaron Menashe - CFO
Analysts
Michael Brcic - National Securities
Tomer Cohen - Five Roads Capital
Operator
I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Ehud, please go ahead.
Ehud Helft
Thank you, operator. Welcome to EVS' second quarter 2017 conference call. I would like to welcome all of you to the conference call and I would like to thank EVS' management for hosting this call.
Before we start, I would like to point out that this conference call contains projections or other forward-looking statements regarding future events or the future performance of the company. These statements are only predictions and EVS cannot guarantee that they will in fact occur. EVS does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing market trends, reduced demand and the competitive nature of EVS' industry, as well as otherwise risks identified in the documents filed by the company with the Securities and Exchange Commission.
With us on the call today are Sam Cohen, CEO and Yaron Menashe, the CFO. Sam will start by discussing some of the key highlights of the second quarter, while Yaron will summarize some of the financial highlights of the second quarter. After this, we will open the call for the question-and-answer session.
Now, I would like to hand over the call to Sam Cohen, EVS' CEO. Sam, go ahead please.
Sam Cohen
Thank you, Ehud. I would like to welcome all of you to our conference call and thank you for your continued interest in our company. While we have seen a drop in our current backlog, we are extremely excited about the business we see in our near future. Over the past few weeks, we have seen a significant increase in orders from Europe and I've just returned from an extensive stay in US where I met with multiple top managers of many, many sectors. These current potential customers, each assured me that business is coming in the near future. From these discussions, we know that we are at the final stages of the sales process in a number of accounts globally and look forward to bring our backlog back in line.
Our backlog decrease is primarily driven by delay in capital spending from few large orders in US and a softer than expected market in China. We understand what is needed and are implementing the necessary corrective action. We will continue to make significant improvement to our products and have added features that will benefit our customers. Our efforts in software enhancements have begun to show significant momentum in our market by giving our customer base a strong, stable operating system with much needed tools and features to expedite their return on investment.
We have continued to pursue other ways to our solutions that boost performance, lower costs and provides customers with necessary automation to grow and thrive in today's market. We have spent time and resources over the past several months improving and refining our iBar product. Each of the upgrades and revisions will enable us to make the product significantly more attractive from a return investment perspective and will help advance our sales and marketing strategy.
We currently have multiple customers with over 20 units installed as well as won customers with nearly 80 units. In total, we have about 250 units running in production as of today. However, given the quality of land owners we have closed in the last few weeks, we believe this number will grow significantly in the upcoming quarters. Obviously, the iBar sales have not progressed on the timelines we originally expected, but over the past two years, we have acquired a vast amount of knowledge regarding how to better promote the product. Despite the delays, we do see high level of interest from all the players in our market and this will eventually lead to increased order momentum and size.
Just to summarize. As we close the first half of 2017, we feel very optimistic about the future of EVS. The decrease in our backlog has been offset by the positive momentum we have seen recently in our sales activity. Our commitment to the complete automation of the textile market and to create global quality standardization has not changed. Though we continue to build toward full potential of the iBar, we've never felt more confident in our future.
And with that, I would like to hand over to Yaron Menashe, our CFO. Yaron, go ahead.
Yaron Menashe
Thank you, Sam. Revenues for the second quarter of 2017 were $2.3 million compared with $2.6 million in the second quarter of last year and $2.5 million in the previous quarter. Second quarter gross profit was $1.3 million, an 8% reduction compared with last year with gross margin 55.9%. Operating income in the second quarter of 2017 was $427,000 versus $630,000 in the second quarter of last year. Our operating margin was 18.7% compared with 24.7% last year. Our OpEx was higher in the second quarter, primarily due to a higher level of R&D expenses.
We expect R&D to remain at this level for the remaining of the year and we expect to increase marketing and sales toward the end of the year. Net income for the second quarter of 2017 was $396,000 compared with $587,000 in the second quarter of last year. Our net margin was 17.4% compared with 23% in the second quarter of last year. Our diluted EPS was $0.04 versus $0.06 last year. Cash and cash equivalent and short term deposit as of June 30, 2017 were 4.3 million compared with 4.5 million as of December last year. As of June end, our shareholder equity strongly improved and stood at $6.7 million from $5.8 million reported at the end of last year.
And with that, we'd be happy to take your questions. Operator?
Question-and-Answer Session
Operator
[Operator Instructions] The first question is from Michael Brcic of National Securities. Please go ahead.
Michael Brcic
Hi. Sorry. I missed the first couple of minutes from the call, but I do have a bunch of questions. You mentioned some large US orders that you expected to close in the first half that didn't. Have they started closing in this quarter or what's the status of that?
Sam Cohen
In the last few weeks, I was in the US and met with all of them and we did have some delays. It's difficult to predict, but the customers show me that business is coming, it should come and that's it. I cannot really tell you, some customers can say okay, it's coming and it's going to take 3 months, some customers, it will take 3 weeks. It's very difficult to predict. But I don't feel like we're missing anything or I think that these are internal processes inside the organization.
Michael Brcic
Got it. Thank you. And this might also be too hard to answer, but do you expect the year-end revenues to be higher than last year or lower or flat or do you have any insight into that yet or is it too early?
Sam Cohen
It is too early. It's hard to predict. We're working hard globally, Europe, Asia and North America. It's very difficult to predict. It can be flat, it can be a little bit lower and it can be much higher. It really depends on what's going to happen in the next two months. But as I said in the conference, we are very focused, we feel very strong about our business. Our business model didn't change. I don't feel anything that fundamental change what we're doing. That's it. It's a small company, it may happen that one quarter here, one quarter there. If you miss one or two deals that were larger than $0.5 million, you may have fluctuations in your results. And that's exactly what happened.
Michael Brcic
Finally, any sort of sense you can give us on possibly listing on the major exchange, because we have a lot of problems here in the US, not being able to buy the stock. Is there any sort of timeframe you can sort of give or a little bit of color on that?
Sam Cohen
Okay. I don't know of any problem that you may have being on the OTC, however, we don't have any timeline. It's in our to-do list. We're looking for the right timing to do that and it happens, now, it wasn't the right time to do this. But we're preparing everything, we did some reverse cleaning a few months ago. So everything is getting ready, it's just technicality at this point. So saying that, it's just timing. When we feel this is the right timing, we will do it.
Michael Brcic
Okay. Is there a chance it could happen this year or is that out of the question?
Sam Cohen
There is always a chance. There is always a chance.
Michael Brcic
Finally on cash balance, if that keeps growing, is there any sense of maybe a special dividend or anything like that?
Sam Cohen
Could you repeat that? I didn't understand.
Unidentified Analyst
Regarding the cash balance, if that keeps growing, is there any thought of paying a special dividend or something like that?
Sam Cohen
Everything is on the table. I cannot say it's not, but this is not something that we are planning in next few quarters. We are investing back all the money back to the company.
Operator
The next question is from Tomer Cohen of Five Roads Capital.
Tomer Cohen
My first question has to do with the next generation of the iBar. I'm curious if you could give us an update on when you think you'll be able to launch that?
Sam Cohen
I cannot give you an update, I will say that we're working very hard on all aspects; hardware, software, mechanics, everything on this project, but I cannot give you any indication at this point.
Tomer Cohen
I see, okay. And then as far as your competitive position…
Sam Cohen
I must add another thing here. I was in an exhibition in May in Frankfurt and in that exhibition I realized that everybody are watching and listening and reading and following EVS [indiscernible] details and it's very difficult for us to expose any information at this point as far as, you know, when are we going to launch it, what's the status, what it's going to contain because competitors, customers, partners, companies that produce weaving machines, all kinds of companies are watching EVS and watching every step. So we need to be very careful in what we are saying or writing in our PRs and conference calls. So I'd like to apologize in advance because meeting with all these guys and they're telling me, okay, we're following this, we read that, it's very critical for us now to be very careful.
Tomer Cohen
That makes sense I understand that. Could you walk me through, you mentioned that your sales and marketing expense would increase, is that because you're expecting to hire new sales people?
Sam Cohen
Basically we are now spending more money in sales and marketing, business development and R&D that's what we're doing right now. Right now we feel this is the bottleneck. Starting with R&D, I can tell you that R&D is something that is very critical to keep us with advantage - the technical and chronologically advantages that we have. And following that we are going to spend more money in sales and marketing distribution channel and so on.
Tomer Cohen
As far as new sales people, could you walk me through, are these people who are going to be out a customer sites helping with integration or are they going to be chasing entirely new customers, or where do you think they'll sit in the sales cycle.
Sam Cohen
Both. But chasing new customers, chasing customers in general mainly, mainly in Asia and North America.
Tomer Cohen
And then my last question has to do or you know what actually I'll jump back in line and ask my other questions later. Thanks.
Operator
[Operator Instructions] The next question is from Jason Harmon [ph]. Please go ahead.
Unidentified Analyst
I was wondering if you could comment a little bit more on the market conditions in China whether these factors are affecting just your company or they are conditions that are affecting a number of your competitors and sort of the textile industry overall in China. Thank you.
Sam Cohen
Well, we don't feel that - we don't know exactly what's happening with competition in China at this point. We are following other companies and I don't know if it impacts other similar companies to EVS, capital equipment to the textile industry companies have an impact at this point, we don't know. We know that for EVS we have seen a drop in getting new orders. We worked hard to really understand what happened there. It's a combination of culture. It's a combination of them understanding how to implement our systems and the cycle of getting repeat orders from Chinese customers.
The answer is we know what happened in EVS, he hope we know what happened in EVS, and we already started to implement a correction action. And this is the answer. I don't really know of any competition, real competition in China. Many customers stand during the negotiation that they are looking to competition, almost everyone in China telling us this. We have some competition in [indiscernible] some competition in film application, but we really don't have any competition in textile.
Unidentified Analyst
I appreciate the additional color on that and you did mention that you know making a correction. Is that just in terms of just changing your sales approach or also in terms of pricing, I'm just wondering if you could comment on whether your pricing has received some additional pressure than usual in China or in any other markets
Sam Cohen
We definitely feel that the pricing strategy in China, only in iBar was not the correct one. We started very high price and we feel today that at least in China it wasn't the correct approach or the correct strategy. So this is something that we implanted few weeks ago, two months ago, but it will also take time for us to go and meet with these customers, explain that okay we improved our production, we improved our purchasing, all kind of things. We improved our product, so we can sell it now in lower cost and they will accept it very openly and positively, I'm pretty sure about it.
Operator
The next question is a follow up from Tomer Cohen of Five Roads Capital. Please go ahead.
Tomer Cohen
I'm just curious if you could update us on your competitive positioning. I know you've talked a little - you told investors about companies that are further along in our products. But I'm curious if you could talk about people who are start-ups if there's anybody coming into this space that's innovating that you think might affect you?
Sam Cohen
I mentioned before that we had a very important exhibition in May, in textile in Frankfurt, technical textile exhibition in one of the largest, if not the largest in textile. This was a great exhibition for EVS and we also believe, this is a side note that the first quarter wasn't so strong in Europe, mainly because of that, the people waited for this exhibition. But immediately after that we picked up many, many more from Europe. We have seen two or three competition, three competitors rather in that exhibition. All of them were in really early stages as far as the architects, you can see that there are some people that presented a big machine vision that was in okay situation I would say, probably maybe two, three years. We are two years ahead of them based on what we've seen.
They don't have good experience and they don't have large customer base and installation base like we do. As far as shade variation analyzer, we didn't see anything with shade variation analyzer. In iBar, I would say that what we seen over there is really in a mock up stage. And this is one of the reasons; I mean, one of the competitors showed something mechanically it looks similar to what we have, mechanically. But definitely from the inside it looks far, far away from what we currently have and what we are able to generate. So this is like I said before, it is very important, but we will keep the cards close to our chest not to talk too much about it. But we feel even after this exhibition, we feel like we are at least two, three years ahead of all the competitors.
Tomer Cohen
Great that's helpful. Keep up the good work and hopefully the quarters to come will yield all the fruits of your hard work.
Operator
There is a follow-up question from Michael Brcic of National Securities. Please go ahead.
Michael Brcic
Just as an aside on the listing thing, I used to be at Oppenheimer and Company and they would definitely not let us recommend anything that was not listed on the main exchanges, here at National, it's similar and probably a little bit more stringent. But my question is regarding competition, do you have any sort of intellectual properties sort of safeguards or anything like that can extend your time in elite.
Sam Cohen
Yes, we do have a patent on the iBar and if you go into details with this patent, you will see there is really strong patent that blocks anybody else to do what we're doing [indiscernible] something there that address a real strong issue with questionable defect, which is the biggest problem. If you have a hole in a fabric that's not a questionable defect that's a defect, but if you have something related to density and stuff like this, this is questionable, it depend on the application and the patent that we have address exactly this issue. And without this you cannot - you simply cannot have a system, you cannot really have a machine, and on the other side, if you have this then you really standardize the weaving process. That's the direction we are taking.
Operator
[Operator Instructions] There are no further questions at this time. Before I ask Mr. Cohen to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available tomorrow on Elbit Vision Systems www.evs.co.il. Mr. Cohen would you like to make your concluding statement.
Sam Cohen
Thank you. On behalf of the management of EVS I would like to thank you for joining us today. Thank you. Have a good day.
Bad quarter and the stock goes up. News must have leaked beforehand, and expectations going forward must be decent. I suppose if these orders are just "delayed" as was stated we might end up with a larger than expected quarter coming up.
Elbit Vision Systems Announces Second Quarter 2017 Results
Revenues at $2.3 million; Net Income of $0.4 million
Second quarter 2017 highlights
Revenue at $2.3 million;
Gross and operating margins at 55.9% and 18.7%, respectively;
Net income of $396 thousand, representing 17.4% of revenues;
Shareholders' equity reached $6.7 million with cash and equivalents at $4.4 million;
CAESAREA, Israel, Aug. 09, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. EVSNF, -3.12% a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, today presented its consolidated financial results for the quarter ending June 30, 2017.
Sam Cohen, CEO of EVS commented, "We have experienced some delays in several large orders from the US, and we have seen a softer than expected market in China. However, all indications point to a healthy backlog by year end. Moreover, our recent successes in iBar placements give us a reason to be excited about the future. We have received land orders in recent weeks that represent several hundred potential units in the Automotive and Technical Textile markets. These orders prove that our drive to automate this industry is certainly within reach."
Second quarter 2017 ResultsRevenues for the quarter were $2.3 million, an 11% decrease compared to $2.6 million in the second quarter of 2016.
Gross profit for the quarter was $1.3 million, representing 55.9% of revenues, a decrease of 8% compared to $1.4 million for the second quarter of 2016, which represented 54.3% of revenues.
Operating income for the quarter was $427 thousand (18.7% of revenue), a decrease of 32% compared to $630 thousand (24.7% of revenues) in the second quarter of 2016.
Net income was $396 thousand (17.4% of revenue), a decrease of 32% compared to $587 thousand (23.0% of revenues) in the second quarter of 2016.
Conference call detailsThe Company will also host a conference call later today at 9:00 am ET. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 866 668 9141 at 10 am Eastern Time
Israel: 03 918 0610 at 5 pm Israel Time
International: +972 3 918 0610
It is their usual practice of reporting,
in both timing and holding a CC.
Fingers crossed for splendid results!
Looks like they are reporting mid-week before the market opens and planning on a holding a conference call. That seems like a good sign.
Elbit Vision Systems Schedules Second Quarter 2017 Results Release for August 9, 2017
GlobeNewswire•August 3, 2017Comment
CAESAREA, Israel, Aug. 03, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (EVSNF), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced that it would be releasing its financial results for the second quarter of 2017 on Wednesday, August 9, 2017 before the US markets open.
The Company will also host a conference call the same day, Wednesday, August 9 starting at 10 am ET. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 866 668 9141 at 10 am Eastern Time
Israel: 03 918 0610 at 5 pm Israel Time
International: +972 3 918 0610
For those unable to participate, the teleconference will be available for replay on Elbit Vision Systems’s website at http://www.evs.co.il/ beginning 24 hours after the call.
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
EVS offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. EVS' systems are used by over 800 customers, many of which are leading global companies.
This press release and other releases are available on www.evs.co.il
Safe Harbor Statement
This press release contains forward-looking statements. Such statements are subject to certain risks and uncertainties, such as market acceptance of new products and our ability to execute production on orders, which could cause actual results to differ materially from those in the statements included in this press release. Although EVS believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. EVS disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or otherwise. EVS undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances.
Contact:
Company Contact Information:
Yaron Menashe, CFO
Tel: +972 4 6107609
yaron@evs.co.il
Investor Relations Contact:
Ehud Helft
Tel: +1 646 201 9246
evs@gkir.com
In this proxy vote it looks like there is going to be $220K paid to some old employees from 2012 when the company was low on money.
http://www.evs.co.il/images/downloads/YA_14920124_1_EVS-2017-Notice-and-Proxy-Statement-YA-11-7-2017.PDF
Seems like someone is trying to get out ahead of the annual meeting.
Wonder what the fees are? Looking to re-enter. I liken the CEO recent comments. DD underway..
Glta
Elbit Vision Systems Announces First Quarter 2017 Results
Revenues at $2.5 million: up 7% year-over-year
Net income at $0.5 million: up 5% year-over-year
First Quarter 2017 highlights
Revenue at $2.5 million, up 7.4% year-over-year
Gross and operating margins at 54.1% and 20.2%, respectively
Net income of $482 thousand, representing 19.3% of revenues
Shareholders’ equity reached $6.3 million with cash and equivalents at $4.5 million
CAESAREA, Israel, April 27, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTCBB:EVSNF), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, today presented its consolidated financial results for the quarter ending March 31, 2017.
Sam Cohen, CEO of EVS commented, “Obviously, we are pleased with our continued growth and the overall positive trend in our results; however, this is not our sole priority. We are focused on the much bigger goal of total automation within the textile market. Given our sustained, steady growth in IQ-TEX4 sales, along with the excitement we see in the industry regarding iBar, EVS is perfectly positioned to become the dominant technology supplier to the second largest consumer market in the world.”
First Quarter 2017 Results
Revenues for the quarter were $2.5 million, representing an increase of 7.4% compared to $2.3 million in the first quarter of 2016.
Gross profit for the quarter was $1.4 million, representing 54.1% of revenues, an increase of 1% compared to $1.3 million for the first quarter of 2016, which represented 57.8% of revenues.
Operating income for the quarter was $505 thousand (20.2% of revenue), an increase of 1.8% compared to $496 thousand (21.3% of revenues) in the first quarter of 2016.
Net income was $482 thousand (19.3% of revenue), an increase of 4.8% compared to $460 thousand (19.8% of revenues) in the first quarter of 2016.
Management will not hold a conference call this quarter due to the close proximity of the previous call held two weeks ago. Investors are welcome to contact management or the investor relations team should they have any questions.
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
EVS offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. EVS' systems are used by over 800 customers, many of which are leading global companies.
This press release and other releases are available on www.evs.co.il
Indeed true although the volume
is pitifully low!
The day EVS will announce the
transfer to a superior listing
will be D day!!!
Indeed true although the volume
is pitifully low!
The day EVS will announce the
transfer to a superior listing
will be D day!!!
Looks like the market took a day to process the news and now it thinks it was a good quarter.
Elbit Vision Systems' (EVSNF) CEO Sam Cohen on Q4 2016 Results - Earnings Call Transcript
Apr. 6, 2017 12:54 PM ET| About: Elbit Vision Systems Ltd. (EVSNF)
FQ4: 04-03-17 Earnings Summary
News
EPS of $0.05 | Revenue of $2.78M (+ 18.3% Y/Y)
Elbit Vision Systems Ltd. (OTCQB:EVSNF) Q4 2016 Earnings Conference Call April 6, 2017 9:00 AM ET
Executives
Gavriel Frohwein - GK IR
Sam Cohen - CEO
Yaron Menashe - CFO
Analysts
Brian Kinstlinger - Maxim Group
Michael Siegel - National Securities
Kevin Dede - Rodman and Renshaw
Mike Schellinger - MicroCapClub
Ian Cassel - MicroCapClub
Gavriel Frohwein
Thank you, operator and my apologies for that interruption. Welcome to EVS' fourth quarter and full year 2016 conference call. I would like to welcome all of you to the conference call and I would like to thank EVS' management for hosting this call.
With us on the call today are Sam Cohen, CEO and Yaron Menashe, CFO. Sam will introduce EVS and discuss some of the key highlights of the fourth quarter, while Yaron will summarize some of the financial highlights of the fourth quarter. After this, we will open the call for the question-and-answer session.
Now, I would like to hand over the call to Sam Cohen, EVS' CEO. Sam, please go ahead.
Sam Cohen
Thank you. I would like to welcome all of you to our conference call and thank you for your interest in our company.
These results [both] the success in our plans for continued year-over-year growth in sales and revenue, but more importantly they demonstrate the significant step forward to realize our goals of the complete text information and quality standardization.
Our overall R&D expenses increased by 80% year-over-year in 2016. However, we want to emphasize that R&D expenses increased specifically in Q4 by about $200,000 due to a one-time retirement grant expense given to two employees. On the bottom line, we reported fourth quarter net income of $449,000, up 35% year-over-year despite this single R&D expense.
Looking ahead we expect our quarterly operating expenses to return to the average level seen in early quarters in 2016. In terms of revenue, our first quarter 2017 revenue looks in line to slightly ahead of those of the first quarter of last year. Our current backlog is similar to that at the same time last year.
However, it is too early to make an average estimate for 2017 since we have a number of potential iBar opportunities in the pipeline, which we are actively working on and which could have a significant positive impact on the year.
Throughout this year, iBar sales continued its positive trend. We have seen year-over-year growth exceed 50% and today we have over 200 units running in production. We currently have multiple customers with over 20 units installed as well as one customer with nearly 80 units. We are also excited to report that we currently have about 10 trial placements that represent potential sales of over 500 units in variety of textile products.
Obviously, the iBar sales have not progressed on the timeline we originally expected, but over the past two years, we have acquired a vast amount of knowledge regarding how to better promote the product. For example, we now understand that most commodity weavers tend to calculate a return on investment strictly from labor stating.
However, iBar provides multitude of cost savings like reduced raw material cost, downtime reduction, significant quality improvement, lower inspection cost and direct from loan shipping. When these factors are brought to light, payback become obvious to all.
And other strategy we are working on is large scale leasing. No one can argue that having an iBar unit can save a minimum of $3,000 to $5,000 per year even on the lowest price commodity goods. By aligning annual capital expenditure with the bare minimum of saving calculations even the greatest of critics can see the benefits.
This further understanding of the market tendencies, coupled with architect sales that include iBar trials has allowed us to capture sales in many customers who were initially reluctant to buy. We know this will be a winning strategy moving forward.
As we have discussed many times in the past, EVS is an automation company specializing in machine region. It is clear to everyone that replacing repetitive human labor is no longer a choice but a necessity to survival. EVS has positioned itself as the automation leader of the second largest industry in the world with over $7.5 billion in potential machine region sales.
Given that, this market is only beginning to adopt automation, EVS is well positioned for long-term sustainable, substantial revenue growth.
Last week our stock performed at 10 to 1 reverse share split. Under the mechanics of the split, our ticker was temporarily changed to EVSND but we returned EVSNF next week. The reverse split brings our share to well above $1, which is a price that institutions are more comfortable investing it and this action combined with our above $5 million in shareholder equity reported today with the conditions required to operate to the NASDAQ capital market.
Though we have no immediate plans to uplift the step we have taken to prepare the groundwork to make this move when we feel the time is right. In summary, we remain very pleased with our performance in 2016 and look forward to continued growth ahead.
And with that, I would like to hand over to Yaron Menashe, our CFO. Yaron go ahead.
Yaron Menashe
Thank you, Sam. Today, we announced solid financial results for both the quarter and full year of 2016. Revenue for the first quarter of 2016 were $2.8 million representing year-over-year growth of 18%. For 2016 as a whole, we reported $10.1 million and recognized a new level and up 11% year-over-year.
Fourth quarter gross profit was $1.5 million, 22% ahead of those of last year with the gross margin of 54%. In 2016, we reported gross profit of $5.6 million up 7% year-over-year with gross margin of 55.4%. Operating income in the first quarter of 2016 was $478,000, 23% ahead of the first quarter of last year with a operating margin of 70.2%.
As Sam mentioned, our OpEx was higher in the first quarter of 2016, primarily due to high level of R&D expenses, which amount to $614,000 versus $253,000 last year. We expect our R&D expenses to return to the level of the third quarter last year. For the year, operating income was $2.2 million versus $2.3 million last year with operating margins of 21.3%. Net income for the first quarter of 2016 was $459,000 an increase of 25% over last year and represented a net margin of 16.1%.
For the full year, we reported net income of $2 million versus $2.5 million reported last year with the net margin of 19.9%. Our diluted earnings per share for the year was $0.022 per share versus $0.025 last year. Cash and cash equivalents and short term deposits as of December last year were $4.5 million compared to $3.3 million as of December 2015.
As of year-end, our shareholder equity strongly improved and stood at $5.8 million up by $2.1 million or $3.7 million reported at the end of last year.
And with that, we will be happy to take your questions. Operator?
Question-and-Answer Session
Operator
Thank you. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. [Operator Instructions] The first question is from Brian Kinstlinger of Maxim Group. Please go ahead.
Brian Kinstlinger
Hi good morning, Sam.
Sam Cohen
Good morning.
Brian Kinstlinger
So, 11% growth is solid in '16, but like you said progress has been a little bit slower than you would have expected. So, based on your pipeline when do you think growth can accelerate to say 25% or more and what kind of sales and marketing investments do you think is necessary to sustain that kind of growth?
Sam Cohen
You know the opportunities are there. As we reported, we have more than 10 trials running right now and the potential is more than 500 units. But it's very difficult to exactly -- pinpoint exactly the timing when it's going to happen. Obviously if it's going to happen, it represents a very large growth.
But even if it will happen, I believe that these customers will say okay, we would like to hold 150 units, but we would like to consume it in 12 month or in 18 months or something like that. So, it's very difficult to predict exactly when it will be 25% or 30% growth.
But we feel very strong that obviously, it will happen. It's clear that we didn’t started to scratch the potential here, but exactly when it's going to happen, it's hard to say, sorry.
Brian Kinstlinger
So, I was going to say what point did the company step up sales and marketing to get double the number of trials or triple the number of trials. So, you have more shots on goal to say per se?
Sam Cohen
Right now, what you decided as kind of tactic, I don’t want to say strategy, but as a tactic, every time when we say likely that for our legacy business like if it's for SVA, we also offer almost as an automatic, we're offering an iBar together with it.
Obviously, the customers most of them like it, like the idea. We like it because it's let's say multiply our sales power technical force because if I already have an engineer that is going to work for one month and installing IQ-TEX 4 at the same time or in parallel, he can install iBar and present and prove to the customer that the potential of the iBar.
We started to do it in U.S. and it worked very nice and now we're doing it in Europe and in Asia. So, this is part of how we kind of almost increasing the number of engineers that we have and we also trained all of our engineers globally. We trained them to know how to install and how to operate the iBar.
Brian Kinstlinger
Great. And with that said, the company is already profitable and I think you meet the requirements. So, what is it that management wants to accomplish before uplifting like you mentioned the company is not ready for that.
Sam Cohen
We think we didn't say the company is not ready. We said that it's not the right timing. It's important for us to feel -- not to feel, but everything will be in place. We are now let's say hiring more people in the management level that will be -- that will help us in operation, in marketing, in R&D and when everything is going to be in place, production is going to be -- everything will be in place, all of our people and territories will work flawless and we feel that the customer is adapting these products without real issues with folks still out or anything that can happen then we're going to do it.
Brian Kinstlinger
Okay. Thanks very much.
Sam Cohen
You're welcome.
Operator
The next question is from Michael Siegel of National Securities. Please go ahead.
Michael Siegel
Good morning. Thank you. You mentioned that you expect the first quarter to be flat to slightly up from last year on the revenue side. Do you see the same on the margin and profitability side or do you think there is some room for improvement there?
Sam Cohen
I feel it's the same probably better.
Michael Siegel
Okay. On the marketing side of the stock itself, you guys have any plans yet on getting the word out through various methods, conferences anything like that?
Sam Cohen
Can you explain. I don't understand your question.
Michael Siegel
Getting more shareholders. Getting more shareholders to know about your company.
Sam Cohen
Yes, yes, of course, of course. We're planning to have more seminars and we are going to work with our IR and more roadshows during 2017.
Michael Siegel
Okay. Great.
Sam Cohen
This is definitely going to be part of I believe that once we'll make a decision to uplift we then have to do a lot of work here in the U.S., Europe and in India by the way.
Michael Siegel
Right. Right. Finally, you mentioned a possible large scale leasing model. How would that impact margins and revenue recognition etcetera? Is it going to look more like a subscription type model?
Sam Cohen
I don't feel it's going to have a huge impact. On the other hand, it would give us kind of a market upgrade every two years. We have more customers right now that we're talking about two options, either three years leasing or five years leasing. So, if it's going to two of the three years leasing, then after three years, we're going to automatically upgrade to the new ones, to the iBars, which we're working on.
As you can imagine, we are working on new generations, all of our products, on all of our products. So, I like this because it gives the customers more -- they're more open for this expenditure. They're more -- they can accept this and some places it's taxable and other financial or should I say, tricks, but this is -- it's really good to push large number of systems and for us, we feel like this is a cash flow, positive cash flow, for us it's fantastic too.
Michael Siegel
Great. Thank you very much. Congratulations.
Sam Cohen
Thank you.
Operator
The next question is from [indiscernible]. Please go ahead.
UnidentifiedCapital
Hey Sam. Thanks for taking the questions. Do you have any sort of timeline on when that leasing program could be rolled out? It sounds like it's started, but maybe just on a global scale when it will start rolling out.
Sam Cohen
We started in the U.S. with two companies. One of them is pure North American operation and one of them is -- they have plans in North America and in Asia and Thailand and both of them really like it. Both of them really -- we are continuing the negotiation process with them.
We are excited about it. They are excited about it. I don't see, I feel like this is a good strategy. We should start in the U.S. or with North American companies because also North America it's more common to do things like this. I can tell you that every time I discussed it with companies from India, they were not open for that.
I just came from South Korea and they were open. One of them says okay, I’m willing to listen to such structure and other companies said no, we will buy everything we want. So, I think we are instead of growing globally one time, we’re going to do it step by step just to make sure it's working, its running because we also need to make sure that our system is capable to handle such a situation.
For example, if a customer decides not to not to pay for one month, we need to be in control and we got to make sure that the machines will not work in such case and that’s why we want to do it first in North America where with respectable companies, AAA companies and we know which are different, we know them, they know us. So, everything will work flawless.
Unidentified Analyst
Thank you. That’s helpful and then in the past couple quarters, you cited a number of engineers as not having enough engineers as kind of bottleneck from iBar sales. Is that still a bottleneck or has that kind of subsided or is that…
Sam Cohen
Let’s put it this way, it's not a bottleneck here, but it’s still a painful subject. We continue to improve this all the time and hiring more and more engineers, field engineers train them, especially in Asia. As a matter of fact. I was in Asia in the last two, two three weeks and I was very pleased with the progress of our engineers over there. It looks like they made huge progress especially in China. So, it's something that will be probably forever here and it’s good problem because it means that we're growing, we need to fulfil the demand.
Unidentified Analyst
Okay. Thank you. That’s all from me.
Sam Cohen
Thank you, Kirk.
Operator
The next question is from Kevin Dede of Rodman. Please go ahead.
Kevin Dede
Hi, Sam. Thanks for taking the question.
Sam Cohen
Hi, Kevin.
Kevin Dede
Yeah, could you just talk a little about the addressable market? I'm curious to see whether or not you think your potential customers are becoming more in tune with using machinery and vision systems to help improve their yields. So, could you talk a little bit about how you see that end market changing during 2000 -- from the end of 2015 through 2016.
Sam Cohen
Sure. Almost like any industry with return on investment. Of course, there are many hidden benefits to our products, but at the end of the day, people will always measure return on investment. And we're working very hard on these two things. We're working very hard to increase our value and we're working very hard to reduce the cost and we're doing it and in fact, we are very, very pleased with the progress we are making.
Today iBar we can sell iBar probably half of what we used to sell a year ago and still make the same profit, the same ratios. So, we feel like, it's all a question of performance and the price, once and both of them, we're working both with both of them.
So, if the price will be in the range of $7,000, $6,500, $8,000, these kind of numbers, if I’m talking about iBar, then I don't feel -- I feel like let’s say at least 70%, 80% of the addressable market, which is one million weaving machines will adapt this, this kind of technology.
As I said in the script, in the conference that we feel that just to find $3,000 per year it's no brainer, it's very difficult for me and you can -- I would be happy to discuss it with any weaver that can show me that he cannot justify $3,000 per machine and this is one year.
So, it you take $6,000 or $7,000 you have less than three years, about two years to pay back on these machines and of course if we have more value, which means more statistical tools, all kind of managements and operations and all these, all the detection that we have on these machines that improve the first quality, reduce the off quality then this is where the payback is. This is where the payback is coming from and this is where we feel strong that weavers or textile companies will adapt our product.
Moreover, we feel very strong about OEMs agreement. Those about 50,000 weaving machine, new weaving machines being sold every year. These company all the weaving machineries manufacturers companies are looking at EVS, they are investigating EVS. We see them on every exhibition.
I must say that we are not pushing them at this point. We want to be more mature as a company. We want to be -- we want to have their product much more matured than it is right now. We want it to be more closer to plug and play. We want our customers to push their suppliers to have EVS.
So, when a company want to buy provide, let's say they bought new weaving machineries, they want to ask their -- the weaving machine suppliers why don’t you contact EVS and see if I can have these machines already integrated with iBar system. So, we want to be in that situation.
This is our strategy. This is how we are -- this is why we feel so strong about the market and regarding addressable market, as I mentioned, it is about one million weaving machines and even if you take $7,000 or $8,000 you can see per machine, you can see that it's about $6.5 billion.
Regarding our legacy business, our legacy business addressable market is less between $1 billion to $2 billion if you take into consideration the non-woven industry.
So, if you take the pure textile, it's about 10,000, 10,000 finishing lines. If you sell IQ-TEX for about $100,000 together, then it's about $1 billion and as I said if you had the non-woven production lines and film production lines, all kind of plastics and coated material that has nothing to do with textile, all kinds of surface, then you feel that the potential is even higher.
Kevin Dede
Okay, thanks. Thanks Sam. Could you talk a little bit about the sales cycle and the backlog and how that's changed over the past year? Now you mentioned and I apologize I didn’t catch the number, but I know you talked about the number of machines that you have in backlog and not it being about the same level as last year.
But given that your pricing has come down and the ROI picture that you are offering your customers has improved, can you talk a little bit about how the sales cycle has changed through 2016 and how you hope it changes in 2017?
Sam Cohen
How the sales cycle of iBars you mean this question?
Kevin Dede
Yes, just curious to see if you think that customers are going to make a decision faster.
Sam Cohen
Customers don’t make decision faster because our systems are better and our engineers who work on the system are better and they have much better understanding and they're not going to have -- they're not going to have to tweak out the system for three or four weeks like we used to have in the past. And we're adding more and more features, new features, new capabilities that are more even find more companies that's good enough for them.
And when we started, even though we had a business plan and we defined the product from a marketing point of view, all this is good and fine, but I clearly put 100 machines in production, you really -- you are going to miss many things and we already factored a stage. So today the system I'm not saying is perfect, I will put it, we have a lot of things to do, but it is much better than it was a year ago or a year and half ago and have much more capabilities.
So once the machine, let's say if the machine is completely automatic, it's going to take one day for the customers to say okay, I'm happy, let's talk about more systems.
Today it should take two weeks, one month, maximum two months to get to the point where the customer is ready to talk about more systems and budgetary questions and quotations and negotiations etcetera.
Kevin Dede
Okay. And then how do you think that changed from last year and then how do you think that's changed the backlog.
Sam Cohen
It didn’t change much the backlog, but it changed a lot the potential. We feel very -- with a potentially right now, the real potential, but we have in the pipeline is more than 500 machines. So, once we are going to do everything if the customers will realize what we have done, we have the potential to get very large, let’s say hundreds of orders. In fact, we have today something that we didn't have a year ago. We are talking to at least three customers on more than 100 machines on each one of them.
Actually, one of them is we are talking to him about more than 200 machines. So, it’s changed a lot from a year before. A year before we talked about okay, once we put one machine or two machines and the customer says okay it's glad to have and says okay, let’s buy 10 more, let’s buy 14 and then we'll see.
So, now we are -- very quickly, we are getting to the point where customers are talking about much more than additional five machines. So, it didn’t change the backlog, but it changed dramatically the potential.
Kevin Dede
Understood, understood. Okay. Yeah thank you for that color Sam. My last question is can you talk about the number of customers that you had in 2015 versus the number of customers you have now or the end of 2015?
Sam Cohen
You know Kevin, it’s almost the same as far as iBar and as far as potential, if you're talking about -- if you're talking about number of trials or number of customers that are trying these machine whether they bought it or not, it doesn’t really matter, but it's not significant. But obviously, we have much more customers for iBars today. I think we have about 20 customers that are using iBar successfully. So right now, we're working with in parallel globally with 10 new customers and we have 20 customers who are already using these -- the iBar for a long time.
Kevin Dede
Okay. Okay. Perfect Sam. Thank you so much for indulging me and the additional color. I appreciate it greatly.
Sam Cohen
You’re welcome. Thank you.
Operator
The next question is from Mike Schellinger of MicroCapClub. Please go ahead.
Mike Schellinger
Yes, I was wondering if you could tell me about what improvements you might have underway for the iBar and to the extent you can talk about it, maybe talk about how that might impact the end market?
Sam Cohen
Hi Mike. It's simple, once you have multiple number of iBars, it's okay, it's one thing to stop the machine, the weaving machine when something is wrong and when the process is wrong when there is something that you understand that you have to stop the machine for that and this where you save a lot of off quality.
When you have all this information, all this flow hundreds of thousands of information that goes into one computer, the center computer, you want to be true to the weavers management to say okay, I’ve got a problem with this beyond a suppliers because I see that all the yarns that he provide me has more defect by 10% or 20% than the other yarn supplier.
The tools, statistical tools that we can give to the management that increase the value and prove their products that we've eventually give them. I believe that working in this area with all the database, ERP systems that are linked to their even customers today, let’s say they receive an order to supply 100,000 meters of fabric, obviously good fabric, so they wanted to measure the length of all the off quality from all the weaving machines because they say okay if added, if I will add in the next month all the size in one direction, all the defects linked and I will get to let’s say instead of 100,000, I will get to 99,000, then it means I need to add -- I need to weave 1,000 more in order to supply the $100,000 order that I receive from my customer.
So, this kind of tools we didn’t have it initially and we're adding this now and we give business to the customer. We put it in our presentation, in our speeches and they like it. They see the value. It's clear to them because today they have no control.
Today if they have an order of 100,000 specifically they know from their experience that they need to add 5% more. So, they will produce 100,000 and 5% more because they know they have off-quality here and there. So, this is a waste. Today we can sell it accurate to the point exactly how much they need to produce more and that’s going to save them a lot of money. This is just an example.
Mike Schellinger
Okay. Thank you.
Sam Cohen
You’re welcome.
Operator
The next question is a follow up from [Michael]. Please go ahead.
Unidentified Analyst
I had just an obvious housekeeping thing. You talked about earnings per share last year, obviously, you were talking about pre-split right.
Yaron Menashe
Yeah.
Unidentified Analyst
And it was point to -- so just that’s all just to make it clear. Thank you.
Sam Cohen
Okay Michael.
Unidentified Analyst
Yes. That was it.
Sam Cohen
Sorry.
Unidentified Analyst
Yeah, just on the earnings per share, just that it was pre-split.
Sam Cohen
Before the split?
Unidentified Analyst
Yeah, did you say the earning per share was like $0.022 a share or share or something like that and that's $0.20 split adjusted that's all.
Yaron Menashe
The $0.022 after the reverse split. We reflected the reverse split in our earnings for full 2016. The number was adjusted.
Unidentified Analyst
Okay, but for the year, adjusted it would be $0.20 a year, right?
Yaron Menashe
No, $0.022. One second.
Unidentified Analyst
No problem.
Yaron Menashe
No, sorry its…
Unidentified Analyst
On the screen, I’m looking at the last 12 months’ earnings and its $0.20 that sort of service.
Yaron Menashe
Yes, for the year it's $0.22 sorry. Our mistake.
Unidentified Analyst
No worries. Thank you.
Yaron Menashe
You're welcome.
Operator
The next question is from Ian Cassel of MicroCapClub. Please go ahead.
Ian Cassel
Yes, my question is about innovation. I know innovation is important to you Sam and the company. I was wondering if there are any other areas within the textile market for products that you are working on that you think can be significant to the company over the long-term?
Sam Cohen
Hi Ian, thank you. Obviously, innovation is critical for us. We are working on -- actually we're working on five new products in parallel right now, some of them sub-contractors and some of them in-house. But there is one point that I mentioned this in the script, I said standardization, I was talking about standardization.
The pattern that EVS has is all about consolidation. We're basically controlling the standard, the regional standard in weaving today, in weaving quality today, there is no standard and although we have a patent on this, we didn’t implement in the iBar.
Once this feature will be implemented in the iBar in general companies, end users like J.C. Penney and Wal-Mart and Costco and beyond and all these companies will be able to order fabric in quality standard. So, they can say we want 100,000 meters of standard EVS 125 and this is our goal and this is something that we are working on right now very hard and hopefully we will be able to implement it during 2017.
This is going to revolutionize all the weaving process because it's going to force and this is going to force the weavers to use it because we are going to expose all these ideas of standardization to all these end users and this is going to my opinion completely change all the game plan.
So, in that we work on digitalization on iBar. We're working on new products called Prin-Tex which is pattern recognition system that should give a fantastic answer to all the printing industry, the digital printing industry.
We're right now working on the definition of software development kit, which will allow us to literally compete with companies like Cognex and InfraVision, basically will allow other integrators, other value-added resellers to use our hardware. We are developing hardware since 1992 and we have a very nice hardware, fantastic I don't want to say the best in the world, but I definitely believe it's the best in the world.
We just need to have access to other engineers all over the world to the hardware and exited the hardware, which means better software. So those huge let's say potential using the same technology, the same algorithm that we have today, we just need to be more open, open company, open software, open source to let other people use this hardware.
Ian Cassel
Great. Thank you.
Sam Cohen
You're welcome.
Operator
[Operator Instructions] We have a question from [Andy Carter from Securities]. Please go ahead.
Unidentified Analyst
What do you see is the normal R&D dollars with big brief that occurred in the fourth quarter and the other question is why your sales and marketing in the fourth quarter have got down when you have 50% increase in revenues?
Sam Cohen
Okay. Could you repeat the first question please?
Unidentified Analyst
Yes, since you have such a big increase in R&D in the fourth quarter, what you see as a normal R&D going forward? Is it going to be $600,000 per quarter or is it going to be closer to the $300,000?
Sam Cohen
Well it's going to be similar to the third quarter of 2016. Okay. This is as far as R&D. As far as sales and marketing, we see a reduction, I believe mainly because of commission, commission structure. The commission structure in the fourth quarter was much lower than our regular structure which was mainly due who are not with agents or distributors or direct sales.
As you know, I don’t know if you know Andy, but we have two ways of selling in the U.S. and China and India we sell directly, sell directly to our customers. We have our own sales people. In all other countries, we sell through agents and so when agents sales are going down, we pay less commission for this is what happened in the fourth quarter.
Unidentified Analyst
Okay. Thank you.
Sam Cohen
You're welcome.
Operator
There are no further questions at this time. Before I ask Mr. Cohen to go ahead with closing statements, I would like to remind participants that a replay of this call will be available tomorrow on Elbit Vision Systems’ website www.evs.co.il. I see with another questions a follow-up from Kevin Dede. Please go ahead.
Kevin Dede
Sorry, I got it in the last minute. Hi Sam, thanks again for staying on the line. I appreciate it. Listen, I was just wondering if you could talk a little bit to the competitive environment? How have you seen that change or do you feel you still have a pretty good shot at addressing this industry without too much competition?
Sam Cohen
Well obviously, competition didn’t change much at this point. We have company in England Sheraton and we have InfraVision and Cognex that are working on other industries, most of they being non-movement and film industry, but not really in textile, but I'm pretty sure Kevin that there will be a competition, companies I know for in fact company always watch EVS. They watch what we're doing and they want to see that we are going to succeed.
So, I feel like once EVS revenue will be let's say $30 million, $40 million, there is no doubt in my mind that we will have very strong competition and we are working very hard to be in position ourselves to be in very good position when this competition will come.
So, this is one of the reasons we really work hard to improve our products, get as much market share as possible. I think this is the key that more customers we'll have the more systems we'll have, this will be a strong barrier to our competition. Kevin, please go ahead.
Kevin Dede
Okay Sam. Thanks, thanks for that color. We appreciate it.
Sam Cohen
Sure Kevin, no problem.
Operator
There are no further questions at this time. Mr. Cohen, would you like to make your concluding statements?
Sam Cohen
Yes, thank you. On behalf of the management or EVS, I would like to thank you all for joining us today and wish you a great day. Have a good day.
Elbit Vision Systems Announces Fourth Quarter and Full Year 2016 Results
GlobeNewswire•April 6, 2017
Fourth quarter revenues at $2.8 million, up 18% year-over-year
Fourth quarter net income of $449 thousand, up 35% year-over-year
Fourth Quarter 2016 highlights
Revenue at $2.8 million, up 18% year-over-year
Gross and operating margins at 54.7% and 17.2%, respectively
Net income of $449 thousand, representing 16.1% of revenues
Full year 2016 highlights
Record revenue at $10.1 million, up 11% year-over-year
Gross and operating margins at 55.4% and 21.3%, respectively
Net income of $2.0 million, representing 19.9% of revenues
Positive operating cash flow of $2 million with year-end cash and equivalents at $4.5 million
CAESAREA, Israel, April 06, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTCQB: EVSNF, EVSND1), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced today its consolidated financial results for the fourth quarter and full year ending December 31, 2016.
Sam Cohen, CEO of EVS commented, “These results reflect another successful year of growth for EVS in both sales and profits, and more importantly we made solid strategic progress towards our long term goal of complete textile automation. Our efforts for continuous improvement in both IQ-TEX4 and iBar have been fruitful over the past twelve months. Our legacy products have shown real resilience in the traditional textile market, while out-performing even our expectations in nonwovens. This continued success coupled with the emergence of iBar has allowed us to advance EVS in technology, costs, and revenue.”
__________________________
1 The ticker symbol EVSND shall be in use for a 20 business days period following the company's 1-for-10 reverse shall split.
Fourth Quarter 2016 Results
Revenues for the quarter were $2.8 million, representing an increase of 18% compared to $2.3 million in the fourth quarter of 2015.
Gross profit for the quarter was $1.5 million, representing 54.7% of revenues, an increase of 22% compared to $1.2 million for the fourth quarter of 2015, which represented 53.2% of revenues.
Operating income for the quarter was $478 thousand (17.2% of revenue), an increase of 23% compared to $388 thousand (16.5% of revenues) in the fourth quarter of 2015. During the quarter R&D expenses increased to $614 thousand versus $253 thousand in the fourth quarter of 2015. R&D expenses in 2017 are expected to revert to the similar quarterly rate seen in recent quarters.
Net income was $449 thousand (16.1% of revenue), an increase of 35% compared to $333 thousand (14.2% of revenues) in the fourth quarter of 2015.
Full Year 2016 Results
Revenues for the year were $10.1 million, representing an increase of 11% compared to $9.1 million in 2015.
Gross profit for the year was $5.6 million, representing 55.4% of revenues, an increase of 7% compared to $5.2 million for 2015, which represented 57.5% of revenues.
Operating income for the year was $2.2 million (21.3% of revenue), a decrease of 5% compared to $2.3 million (24.8% of revenues) in 2015.
Net income was $2.0 million (19.9% of revenue), an increase of 222% compared to $2.1 million (23.2% of revenues) in 2015.
The Company reported a positive operating cash flow of $2 million for the year.
As of December 31, 2016, cash and cash equivalents were $4.5 million.
Conference call details
The Company will also host a conference call later today at 9:00 am ET. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 888 668 9141 at 09:00 am Eastern Time
Israel: 03 918 0610 at 4:00 pm Israel Time
International: +972 3 918 0610
For those unable to participate, the teleconference will be available for replay on Elbit Vision Systems’ website at http://www.evs.co.il/ beginning 24 hours after the call.
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
So am i! Moreover i am waiting
for their announcement to move
to a superior exchange!
I'm hoping for some good results on April 6.
Hopefully 2016 will show a continued
linear financial improvement:
http://finance.yahoo.com/quote/evsnd/financials?ltr=1
Elbit Vision Systems Schedules Fourth Quarter 2016 Results Release & Conference Call for April 6, 2017
Also Announces that its Reverse 10-1 Split of Shares Became Effective on March 27, 2017
CAESAREA, Israel, March 28, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTC:EVSNF); (OTC:EVSND) (“EVS”, or the “Company”), a pioneer in the science of camera-based automatic machine vision inspection, announced today that it would be releasing its financial results for the fourth quarter and full year of 2016 and hosting a conference call to discuss those results on Thursday, April 6, 2017 before the US markets open.
The company also announced that the reverse share split of its shares became effective. The Company's ordinary shares commenced trading on Monday, March 27, 2017, on a 1-for-10 split-adjusted basis. As a result of the reverse share split, the Company's issued and outstanding ordinary shares stands at approximately 9.4 million.
The new CUSIP number for the ordinary shares following the reverse share split is M37576135. The shares will continue to trade on the OTCQB. For twenty days, the Company's ordinary shares will trade under the ticker symbol ‘EVSND’ and following that will revert back to the ticker symbol ‘EVSNF’.
Results Conference Call Details
The company will host a conference call to discuss its financial results and recent developments on Thursday, April 6, 2017 at 9am Eastern Time. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 888 668 9141 at 9am Eastern Time
Israel: 03 918 0610 at 4pm Israel Time
International: +972 3 918 0610
Elbit Vision Systems Schedules Fourth Quarter 2016 Results Release & Conference Call for April 6, 2017
Also Announces that its Reverse 10-1 Split of Shares Became Effective on March 27, 2017
CAESAREA, Israel, March 28, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTC:EVSNF); (OTC:EVSND) (“EVS”, or the “Company”), a pioneer in the science of camera-based automatic machine vision inspection, announced today that it would be releasing its financial results for the fourth quarter and full year of 2016 and hosting a conference call to discuss those results on Thursday, April 6, 2017 before the US markets open.
The company also announced that the reverse share split of its shares became effective. The Company's ordinary shares commenced trading on Monday, March 27, 2017, on a 1-for-10 split-adjusted basis. As a result of the reverse share split, the Company's issued and outstanding ordinary shares stands at approximately 9.4 million.
The new CUSIP number for the ordinary shares following the reverse share split is M37576135. The shares will continue to trade on the OTCQB. For twenty days, the Company's ordinary shares will trade under the ticker symbol ‘EVSND’ and following that will revert back to the ticker symbol ‘EVSNF’.
Results Conference Call Details
The company will host a conference call to discuss its financial results and recent developments on Thursday, April 6, 2017 at 9am Eastern Time. Sam Cohen, Chief Executive Officer and Yaron Menashe, Chief Financial Officer, will host the call and will be available to answer questions after presenting the results.
To participate, please call one of the following telephone numbers at least 10 minutes before the start of the call:
US: 1 888 668 9141 at 9am Eastern Time
Israel: 03 918 0610 at 4pm Israel Time
International: +972 3 918 0610
Elbit Vision Systems Ltd. breached its 50 day moving average in a Bullish Manner : EVSND-US : March 28, 2017
FWIW
http://www.capitalcube.com/blog/index.php/elbit-vision-systems-ltd-breached-its-50-day-moving-average-in-a-bullish-manner-evsnd-us-march-28-2017/
EVSNF: effective March 27,2017 a one for 10 reverse split:
http://otce.finra.org/DLSymbolNameChanges
Elbit Vision Systems Ltd. (OTC:EVSNF) (the “ Company ”), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced today, following the Company's announcement dated January 30, 2017 according to which the reverse share split of the Company's ordinary shares is scheduled to become effective as of the close of business on Friday, March 24, 2017 such that the Company's ordinary shares will commence trading on a split-adjusted basis when the market opens on Monday, March 27, 2017, that the new CUSIP number for the ordinary shares of the Company following said reverse share split will be M37576135.
a ratio of 1-for-10
Just broke 52W/H
Elbit Vision Systems (EVSNF)
0.42 ^ 0.02 (5.00%)
Volume: 161,151 @ 11:45:00 AM ET
I wanted to re-post the following on EVSNF as a reminder to myself to focus on the fundamentals, and not on the stock price action.
*************************
In 2016, the company appears to have generated over $1 million of cash flows in 9 months. How can we determine this number without a statement of cash flows? The answer lies in the balance sheet. Over the past 9 months, cash on the balance sheet has grown by $0.5M Meanwhile, debt on the balance sheet has fallen by $0.5M. There can only be two sources of this funding -- equity financing or cash flow from operations. I think it's fair to rule out the former because diluted shares at the beginning of the year were 93.4M and now sit at 93.7M. (I may be mistaken, but I believe that the exercise of warrants into 7.7M shares actually occurred in calendar 2015 given that the Jan 6, 2016 press release indicates there being $3.2M in cash on the balance sheet as a result of the exercise and the last 20-F shows $3.3M in cash on the balance sheet at the end of 2015.)
Conversely, we know that earnings over the first 9 months have been $1.6M. We also know that EVSNF's depreciation is negligible. The balance sheet shows that non-cash current assets are up $270K (negative cash impact) and non-debt current liabilities are down $130k (negative cash impact). So, that seems to generally sanity check the $1M figure above.
How much capital did EVSNF require to generate the $1M of cash flow from above? Non-cash assets on the balance sheet sit at $3.7M and non-debt current liabilities sit at $1.8M. The difference between these two numbers is my measure of invested capital (since I generally don't mind small companies hoarding cash on their balance sheets). So, it took EVSNF $1.9M of capital to generate $1M of cash flow in 9 months. That's a 53% cash return on invested capital in 9 months (70% annualized).
And how richly valued is this company that seemingly generates a 70% annualized cash return on investment. If my numbers are right, the company's enterprise value is roughly 14x its free cash flows. To my eyes, that 70% cash return on investment doesn't seem to be baked into the valuation.
So, rather than excoriating my business partner, Sam Cohen (he of the $200k annual salary and 17% equity stake) for decisions made in the past year vis a vis iBar, I'd tell him to just keep doing what he's doing. I can very much live with my company treading water with a 70% cash return on investment while waiting for a new product to ramp with customers.
****************************
When I posted that initially, the date was December 2, 2016. The stock price at the time was about $0.29 per share. EVSNF is up about 40% since then. I'm posting this not to take a short-term victory lap, but to chide myself a little bit.
I should have been buying more at those levels instead of nibbling around the margins, which is what I was doing.
EVSNF has extraordinary economics as a small business. If those economics are sustainable over time, the company and its shareholders should be rewarded eventually. Perhaps not in days, weeks, or months, but in years.
Right now, I find the same kind of short-term negativism affecting the price of another one of my holdings -- Virtra Inc. (VTSI). And, once again, I find myself struggling to focus on the long-term, as opposed to fixating on the short-term stock price. There is no guarantee that VTSI will be up in 3 months in the same manner that EVSNF was, but there are some parallels in their business economics. Hopefully, those economics carry the day with regard to shareholder value over the long run.
As always, would love to hear any dissenting opinions on either EVSNF or VTSI.
Cheers.
52 Week High broken yet
again, now at 0.406!!!
Seems to be breaking out of what might be considered a flag formation.
Plus breaking 52 week high!
Plus breaking 52 week high!
Another big volume day today ...
150k is roughly 5 times the average volume over the past 10 days.
And we're only 10 minutes into the trading day.
Technical break-out:
Niche Machine Vision Player Near Major Inflection Point In Growth
Brandon Ferro
http://seekingalpha.com/article/4045213-niche-machine-vision-player-near-major-inflection-point-growth?auth_param=3ofmh:1ca5vr8:cb067024612e10be36469bf049414230&uprof=45
Summary
Elbit Vision Systems Ltd. is an Israel-domiciled, $30 million micro-cap provider of machine vision systems that automate defect detection and quality assurance (QA) during the textile manufacturing process.
Despite overwhelming use of industrial automation in other industries, defect detection and QA in the textile industry are still almost entirely done using manual labor on a global basis.
Recent developments increase the likelihood of broad-based, secular adoption of automation in textiles, and along with it, accelerated and growing demand for Elbit Vision Systems' two core products.
Elbit Vision is the clear global leader within its niche vertical of textile machine vision, and, despite its tiny size, is a self-funding, cash-generating, ~20%+ EBIT margin enterprise.
Catalysts include new business wins, a reverse split, potential up-listing, exhaustion of share supply overhanging the stock and a technical break-out on the chart.
Background
Elbit Vision Systems Ltd. (OTCQB:EVSNF) is an Israel-domiciled, $30 million micro-cap provider of machine vision systems that automate defect detection and quality assurance (QA) during the textile manufacturing process. EVSNF commenced operations in 1994 as a subsidiary of Elbit Systems (NASDAQ:ESLT), the multi-national, Israel-domiciled defense conglomerate. It was subsequently spun out as a Nasdaq-listed IPO in 1996 and traded there until shares were de-listed in 2003.
During its genesis in the 1990s, EVSNF set about designing and manufacturing automated inspection systems for the textile industry, initially targeting US-based manufacturers. Problematically, the Asian-based outsourcing wave quickly emerged and crushed domestic-industry profits and cap-ex budgets. Nor was there a need for Asian-based suppliers to adopt automated machine vision at the time as ROIs weren't all that attractive in the context of cheap emerging market labor versus the developed world and how nascent and prohibitively expensive EVSNF's technology still was.
The above secular theme, coupled with the recession that coincided with the new millennium, hurt EVSNF. To offset end-market weakness and the slow adoption of its products, it made three tertiary acquisitions financed with debt - two in 2004 and another in 2006 - of companies with similar technology but geared toward non-textile verticals. This M&A yielded little fruit and left the company levered and on the brink as we headed into and exited the 2008/2009 GFC.
To survive and de-lever, EVSNF i) received a private placement from and restructured its debt with its then controlling shareholder in 2009; ii) named Same Cohen CEO in 2010 (Cohen launched the company's US operations in the early '90s, left and came back in 2003); iii) sold one of its 2004 acquisitions in 2010; iv) restructured its bank debt in 2010, which included outright forgiveness; and v) received private placements in the form of stock sales and warrant grants in 2012 and 2014. As part of i), the company's then controlling shareholder relinquished its equity interest to Cohen and the company's CFO, Yaron Menashe, who has also been at EVSNF since 2003. Both Cohen and Menashe now own ~18% of outstanding shares each, and cumulatively, directors and officers own >50% of the company.
Products
EVSNF's products include a combination of hardware and software. The hardware is used for image acquisition and processing and includes the company's own internally developed cameras combined with LEDs for illumination and dedicated CPUs. Defects detected by the hardware are subsequently processed by proprietary vision understanding and interpretation algorithmic software. The algorithms allow the company to recognize and sequester fabric flaws in real time and to learn the types and severity of flaws a customer wishes to detect, ignoring ones that don't fit certain specifications, as can be seen below.
EVSNF algos detect defectsi in real-time and in color
Source: EVSNF investor presentation
EVSNF essentially offers two core products, IQ-TEX and iBar, with textile customers spread across the automotive, apparel, composites, home, medical and technical materials industries as follows:
IQ-TEX - Visual inspection and QA at the finishing line stage of the manufacturing process for woven and non-woven textiles including knitted, tire cord, film, metal, coated and technical fabrics. This is the last stage of the manufacturing process before fabric is shipped to customers. Defects detected here can then be "optimized" by a bolt-on suite of EVSNF software that allows the manufacturer to cut around defects, thus yielding smaller rolls with better yield and higher selling prices as well as reduced low-quality product that might be returned. Here's a video showing IQ-TEX in action.
Source: EVSNF investor presentation
iBar - EVSNF's newest product, introduced in 2H14. Visual inspection and QA on loom that is integrated with individual weaving looms and monitors selected fabric types, usually of higher value, while weaving. This is the holy grail of textile defect detection, as it allows the manufacturer to catch defects and quality issues in process and on loom before they ever make it to the finishing line, maximizing both yield and profit. Here's a link to a video showing iBar in action.
Source: EVSNF investor presentation
Competition
As part of the due diligence process, I've spent the better part of the past six months discussing EVSNF's competitive position within the global machine vision industry with customers that use its products, competitors, like-minded investors and EVSNF itself. Though somewhat hard to believe given the company's tiny relative size, that work indicated it is the clear global leader within the specific niche vertical of textiles, with what appears to be ~80-90% global market share.
Competitors that have been mentioned include Isra Vision AG (OTC:IRAVF, ISR.GY), Shelton Vision, BMS and Ametek's (NYSE:AME) Surface Vision unit which it purchased from Cognex (NASDAQ:CGNX) in 2015 for $160 million (versus $60 million in annual sales, or 2.7x). Cognex's sale appears more about its existing opportunity set than a lack of one within the division it sold to Ametek.
Discussions have consistently revealed favorable differentiation in EVSNF's model. For instance, other systems might lack full-color inspection, are harder to install, are more expensive, make promises the technology has failed to deliver upon or don't possess proper engineering and support infrastructure. In numerous cases, textile manufacturers have ripped out pre-existing competitive solutions and replaced them with EVSNF products instead.
The company's competitive edge appears three-fold. For one, while others tried to penetrate the space in the 1990s, amid painstakingly slow adoption they all ended up waving the white flag and moved on to other industry verticals even as EVSNF, for better or worse (worse until now!), stuck with it. Thus, the company has been singularly focused on automating textile inspection for two decades now, and has tremendous expertise in the vertical. Secondly, the passage of time and its status as a micro-cap make it easy to overlook the fact that EVSNF and its algorithmic inspection software were developed and birthed out a massive defense conglomerate in ESLT, its former parent; as understood, EVSNF's algorithms share lineage with ones used by ESLT in fighter jet, target acquisition applications. Third, by developing its own proprietary camera systems as opposed to outsourcing them at 4x the cost, it has a tremendous cost advantage, sourcing only its camera's lenses externally.
In conclusion, though competition exists, EVSNF is the clear leader and appears better positioned than others to exploit any future machine vision penetration within textile manufacturing that might occur. In addition, this positioning should help insulate and protect the company's exceptional 50%+ gross and 20%+ EBIT margins from competitive-based erosion over time.
The Secular Growth Opportunity
In excess of 90%+ of global textile defect detection and QA is still done manually, but that's been for the case for the past two decades EVSNF has spent proselytizing the industry on the need for automation. So what changes the existing paradigm to accelerate adoption? Numerous emergent and convergent secular trends should.
For one, wage rates in Asia have gone up noticeably over the years versus the early/mid-1990s as the developed versus emerging labor arbitrage has been exhausted. Directionally, labor now adds cost to textile manufacturing rather than removing it. EVSNF believes the IQ-TEX can effectively replace 10 manual inspectors. Beyond labor savings, the technology has advanced enough to do a demonstrably better job of inspection than humans. On a Monday morning, EVSNF's IQ-TEX finishing line system can detect in excess of 85% of all defects versus 65% for humans in optimal conditions. In addition, manual inspection is simply a terrible and monotonous job. Separately, iBar's on-loom inspection introduces QA where none existed. Third and most importantly, like all technology over time, cost has declined enough, and should continue to decline, to make ROIs on such cap-ex outlays ever more appealing for profitability-constrained textile manufacturers.
Source: EVSNF investor presentation
For instance, EVSNF now sells IQ-TEX systems for ~$120-240K, representing ~25% of the cost of a typical $500K-1,000K finishing line. ASPs should settle in at ~$100K per system over time. By contrast, the newer iBar sells for ~$20K-30K per weaving loom, representing a much larger proportional spend relative to the cost of 80% of the globe's installed weaving looms making low-end fabrics, which run as little as $50K. EVSNF believes it can get the cost of iBar down to ~$8K per system, or ~15% of the average cost of a low-end loom in the near/intermediate term. At this level, the product's ROIs should become attractive across 100% of globally installed looms, not just the 20% making high-value, complicated fabrics that EVSNF has targeted to-date.
In terms of a total addressable market (TAM), the numbers are staggering relative to EVSNF's TTM revenue of ~$10 million, especially for the iBar. The company estimates the following:
IQTEX - 10K global finishing lines * $100K long-term ASP = $1 billion
iBar - 800K global weaving lines * $8K long-term ASP = $6.4 billion
Source: EVSNF investor presentation
Before you laugh about the size of the TAMs above, I get it: we should all be insanely incredulous when we see any company pitching multi-billion-dollar TAMs that are currently 1% penetrated as the ones above are. Having said that, consider the following:
EVSNF's TAM estimates could be off by magnitudes of order, and the resulting growth would still fundamentally alter the size of the company.
Textile customers of EVSNF who use the products have suggested their own customers (apparel companies) believe automated defect detection could become a standard across the industry over time, and that manufacturers could be forced into adoption simply to survive. Indeed, the company announced in September that it had received a US patent that covers the process for objectively identifying and measuring textile defects, and that it hopes to use this as a benchmark for a global industry standard of quality.
Raw material costs are a textile manufacturer's single biggest input cost; a tiny incremental reduction in the % of material lost to defects yields material improvements in profitability for a profit-challenged industry.
Land & Expand: Inflection Point in Growth Approaching
EVSNF currently generates ~$10 million in annualized revenue. Recent growth has been strong, driven by legacy IQ-TEX installations and ~150-200 cumulative iBar installations since 2H14, but part of this is attributable to the tiny base of business the company had coming out of the GFC.
Moving forward, though IQ-TEX should continue to provide a strong foundation for growth, the sheer volume of global weaving looms versus finishing lines (800K versus 10K) makes iBar the obvious growth opportunity and rationale for owning the stock. Here, it appears that we may be reaching an inflection point whereby small iBar installations that have been "landed" as proof-of-concept trials at various textile manufacturers over the past two years are on the verge of morphing into much larger "expansion" and follow-up orders.
To generalize, when the product was introduced in 2H14, a typical iBar customer might have made an initial purchase of 10-20 units and installed them on only a small percentage of a single product line's weaving looms, despite there usually being multiple product lines running in the same facility. These orders were proof-of-concept trials whereby the manufacturer spent the better part of the past 12-18 months assessing iBar's efficacy and ROI. Results have been favorable. As such, initial buyers are likely beginning to make larger follow-on iBar orders. Follow-ons will be to dial up iBar penetration on the product lines that were trialing, but will also be used on new product lines. In addition, whereas initial installations required a good deal of time and EVSNF engineering support at the customer's facility, follow-ons will be much more expedient, and unless they choose to have EVSNF do it, the customers can actually install the equipment themselves.
Beyond the latter follow-on order dynamic for iBar, note that there are ~20-30 textile manufacturer customers that have purchased at least a single unit for trial so far, and that the average customer has ~200 looms. Thus, existing customers represent the potential for ~4K-6K iBar sales in the near or intermediate term, or a $32-48 million revenue opportunity.
For those skeptical of the company's TAM estimates, EVSNF has sold IQ-TEXs for ~800 finishing lines in its history, penetrating only 8% of this TAM. While increased IQ-TEX adoption alone provides an avenue for strong future growth, on average, ~100 weaving looms feed into each of these individual finishing lines. Thus, existing IQ-TEX installations provide a pool of ~80K iBar units (800 finishing lines * 100 weaving looms) at full penetration, which, at an ASP of ~$8K per iBar, equates to a $640 million revenue opportunity over the intermediate to long term.
Valuation
The fact that it's a pure-play on machine vision in the textile vertical, Israel-domiciled and a micro-cap means the company doesn't necessarily have an easy or direct set of comparables. However, because it is a machine vision play, if we're willing to overlook the vast differences in size, we can compare it to the likes of Cognex Corp., Isra Vision Ag, SinterCast AB (OTC:SRVQF, SINT.SS), IAR Systems Group (IARB.SS) and even Rockwell Automation (NYSE:ROK), all of which directly or peripherally have exposure to this theme, more or less. As a check, we would expect EVSNF's TTM gross, EBIT and ROE margins of 55%, 21% and 42%, respectively, to be similar to those of our comparables - and they are.
EVSNF trades at 3.0x and 14.0x TTM EV/sales and EV/EBIT versus 7.0x and 26.0x for the comp group and 3.5x-4.0x and 20x for the group's cheapest members. Despite the optical discount, shares likely aren't as cheap as they might appear given the company's riskier characteristics. EVSNF's current multiple of sales is also consistent with the 2.7x multiple Ametek paid for CGNX's Surface Vision unit in 2015.
In concluding, EVSNF appears reasonably valued based on its current run rate of business. However, it isn't a valuation play; with this exercise, we're just looking for a general framework to help us understand whether we're paying at least a semi-reasonable multiple for what is instead a transformational, micro-cap growth story.
Catalysts
Reverse stock split: Effective March 24, 2017, shareholders will receive 1 share in exchange for every 10 they currently own. Beyond removing the "penny stock" stigma, management has discussed its desire to up-list shares to a major exchange in the future, and the reverse split likely presages such a move.
New business: As noted, demand for iBar could be reaching a major inflection point whereby adoption could begin to accelerate rapidly, which would necessarily coincide with more frequent announcements of large, new business wins. In fact, due diligence suggests EVSNF could be close to displacing a large, publicly traded machine vision company's inspection technology (a multi-national consumer products company) on a specific product line that has caused a few high-profile consumer quality-related complaints.
Acquisition: EVSNF's financial characteristics are appealing - it's debt-free, cash generative and highly profitable. It's also a clear leader in its vertical. Should the company gain scale, it would likely make an easy and logical acquisition candidate for a larger competitor.
Turnover in float: Since mid-/late 2015 ~40 million shares, representing the entirety of the company's float, have changed hands as the stock has consolidated around a 10-year high of ~$0.30-0.35. With insiders accounting for the entirety of the other outstanding shares, this implies that most of any available supply that has prevented further upside has likely been soaked up.
Technical break-out: Over the past week, EVSNF has cleared ~20-year resistance dating back to 1998; said resistance has marked all of the stock's most dramatic cyclical highs and starting points for declines over this period. Concurrently, it has broken out of a bullish, ascending triangle that has formed over the past ~18 months.
Source: Bloomberg, author's annotations
Risks
EVSNF's textile end markets are tremendously cyclical, capital-intensive and have historically been profitability-challenged. Even marginal global macro weakness will all but eviscerate purchasing power and demand for the company's products.
Outside of cyclicality, EVSNF's model is a discreet capital equipment one which is inherently lumpy, lacks visibility and has no recurring revenue component.
Despite the tremendous opportunity for growth in demand for its products, adoption of these products may continue to prove challenging and more time consuming than my thesis accounts for.
EVSNF has suggested on some of its earnings calls that one of its recent growth bottlenecks has been on the engineering side of the house, and that it has deliberately been measured and methodical in installing iBars, understanding it has one opportunity to get it right. Given its limited resources, any more rapid a rate of iBar adoption could necessitate hiring additional engineers, which would involve execution risk. The company recently expanded the size of its headquarters in Caesarea, Israel, and believes it has plenty of manufacturing capacity to support future growth.
EVSNF is micro-cap, OTC-listed and Israel-domiciled, with different accounting and corporate governance standards relative to companies domiciled and listed on major exchanges in the US.
Disclosure: I am/we are long EVSNF.
News aren't a necessity for the stock to move. The company is very undervalued to begin with. Uplisting is coming in the next few months. Earnings release also coming in a few weeks. Technically the stock consolidated for a few months as well before today it finally broke the previous 52wks high on high volume. Basically investors with a timeframe greater than a few days or weeks are positioning themselves for what's to come and I don't blame them.
I haven't seen any news.
Did anyone see any news? Was EVS mentioned in a newsletter or something?
And it broke out on almost 5 times average volume.
Elbit Vision Systems Ltd. (EVSNF)
hit an upwards 5 year price breakout.
This is from their latest earnings press release: (see the red highlights)
Revenues at $2.5 million & Net Income of $528 thousand
Third Quarter 2016 highlights
Revenue of $2.5 million with continued sequential growth expected into Q4;
Gross and operating margins at 54.9% and 22.3%, respectively;
Net income of $528 thousand, representing 21.3% of revenues;
Shareholders’ equity reached $5.3 million (versus $2.2 million at quarter-end Q3 2015)
Quarter-end cash and equivalents were $3.95 million (versus $2 million at quarter-end Q3 2015)
CAESAREA, Israel, Nov. 22, 2016 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTCBB:EVSNF), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, announced today its consolidated financial results for the quarter ending September 30, 2016.
Third Quarter 2016 Results
Revenues for the quarter were $2.5 million, representing a decrease of 15% compared to the $2.9 million reported in the third quarter of 2015.
Gross profit for the quarter was $1.4 million (54.9% of revenues), compared to $1.8 million (60.3% of revenues) for the third quarter of 2015.
Operating income for the quarter was $554 thousand (22.3% of revenue), compared to $915 thousand (31.5% of revenues) in the third quarter of 2015.
Net income was $528 thousand (21.3% of revenue), compared to $929 thousand (31.9% of revenues) in the third quarter of 2015.
Management Comment
Sam Cohen, CEO of EVS commented, “We are pleased with these results which continue to show a very strong year for us. Demand for our legacy products remains solid especially in Asia, while iBar sales increasingly trend upward. Looking ahead, we expect to see sequential revenue growth into the fourth quarter, which implies revenues of around $10 million for the full year of 2016. We see this as a substantial achievement, demonstrating strong growth in recent years. We also expect to end 2016 with around $4.7 million in cash with no bank debt on the balance sheet, enabling us to capitalize on potential opportunities which can help us accelerate our growth.”
Link:https://globenewswire.com/news-release/2016/11/22/891992/0/en/Elbit-Vision-Systems-Announces-Third-Quarter-2016-Results.html
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