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Lt_investor, Did they say specifically profits will be better or are you just looking at the full year $10Million guidance?
I listened to the CC again.
They said some banks in Israel will allow trading of shares at minimum $1.05 dollars and that that is something they would be happy to do and will do in the next few months so that traders in Israel could go ahead and buy shares.
They said not to be concerned that this is down versus last quarter, quite the opposite when you look at the 9 month results and $300K-$400K can shift just by a late shipment.
They are increasing dramatically area of production. You could actually hear hammering on the conference call.
They expect repeat orders, which they actually did get a $600 follow-on order.
Demand is incredible especially in Asia.
They had a nice variety of segments they are working on - different areas of industry and different products.
CEO feels good about iBar as well as legacy business.
The CEO wasn't quite sure when the
2nd, 3rd quarter, but very confident that within 18-24months all the iBar would be ready.
The comparable for 4th quarter 2015 is $2.349 Million in revenue. They guided for $10Million in revenue for this year, and they had $7.363Million in revenue already, so that gives $2.637 Million for 4th quarter 2016 a 12% increase in revenue as per guidance.
They said 3rd quarter of 2015 was unusually large because they were contractually obligated to deliver a large amount of product in the 3rd quarter 2015. That is why the 3rd quarter 2016 didn't compare as well.
Here is language from the filing when they first started the process of the reverse split that references the Nasdaq:
"
Our Ordinary Shares were delisted from the Nasdaq SmallCap market in November 2003 due to our failure to comply with the $2.5 million minimum shareholder equity requirement, and our shares are currently traded on the OTCQB. While our market cap is now significantly greater than the minimum shareholder equity requirement of the Nasdaq Capital Market, given our current share price, we are unable to list on the Nasdaq Capital Market and our Ordinary Shares are deemed to be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks and are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These and other requirements relating to the trading of penny-stocks have lead to certain broker/dealers in Israel refusing to take trades in our shares. This has made it more difficult for our shareholders to sell shares to third parties or to otherwise dispose of them.
We believe that a reverse split is advisable in order to make our Ordinary Shares a more attractive investment for large US institutional investors (many of whom do not regularly invest in stocks trading below $5.00 per share) and to allow for a possible return of the Ordinary Shares to the Nasdaq Capital Market, which would require a minimum bid price of $3.00 per share. We therefore seek approval of the shareholders to effect a reverse share split of our outstanding Ordinary Shares within a range of 1:5 to 1:30 and to amend our Articles of Association to effect such reverse split. If this proposal is approved, then the Board will have the authority to decide, within nine months of the Meeting, whether to implement the reverse share split and the exact ratio for the reverse split within this range if it is to be implemented. If the reverse split is implemented, the number of authorized as well as the issued and outstanding Ordinary Shares shall be reduced in accordance with the exchange ratio selected by the Board.
We believe that listing on the Nasdaq Capital Market will enable our company to maintain greater access to the public capital markets and will afford our shareholders greater liquidity with respect to their shareholdings in our company and enhance our ability to secure additional financing if required. Accordingly, the Board recommends that the shareholders approve the reverse share split as described above on a date to be announced by the Company and authorize the Company to amend the Articles of Association accordingly.
"
https://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11295054
Agree. This is good news and the reverse split was necessary for uplisting. This company is profitable and adding >500k in net profits per quarter so unlike other companies that do RS there is no need for dilution here. Can't wait to be listed on NASDAQ....with such a low float and increased volume liquidity this is going to move faster than on OTC. I expect more details on the CC in a few weeks and a better quarter than Q3 profit-wise as it was indicated by management.
The CEO said in the conference call that they are fully prepared to uplist to the Nasdaq and have met all the requirements, they just want to optimize the timing of that. Looks like they are ready.
Hopefully this is the first move
towards moving to a superior exchange,
where EVS had been many years ago!
EVS Announces Reverse Share Split
CAESAREA, Israel, Jan. 30, 2017 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (OTC:EVSNF) (“EVS”, or the “Company”), a pioneer in the science of camera-based automatic vision inspection for textile fabrics and technical webs, today announced that it is to effect a reverse share split of its shares at a ratio of 1-for-10, such that every ten outstanding ordinary shares par value NIS 1.00 of the Company shall be converted into one ordinary share par value NIS 10.00. At a meeting of the Company’s shareholders on May 2, 2016, the shareholders approved a reverse share split with an exchange ratio of not less than 1-for-5 and not more than 1-for-30 and authorized the Company’s board of directors to direct the Company's management within nine months following the meeting, to implement such reverse share split at an exchange ratio within this range.
The reverse share split will become effective as of the close of business on Friday, March 24, 2017 and the Company's ordinary shares will commence trading on a split-adjusted basis when the market opens on Monday, March 27, 2017. The Company's post-split ordinary shares will continue to trade on the OTCQB under the symbol ‘EVSNF.’ Prior to the effective date the Company shall announce the new CUSIP number for the ordinary shares following the reverse share split.
Proportional adjustments will be made to the exercise prices of the Company's outstanding warrants and share options, and to the number of shares issued and issuable under the Company's equity compensation plans.
Information for Shareholders
Upon the effectiveness of the reverse split, each ten ordinary shares of the Company’s issued and outstanding share capital will automatically be combined and converted into one issued and outstanding ordinary shares par value NIS 10.0 per share. As a result of the reverse share split, the Company's issued and outstanding ordinary shares will decrease to approximately 9,400,000 ordinary shares, post-split and it’s authorized share capital will be reduced to 12,000,000 ordinary shares. No fractional shares will be issued as a result of the reverse split. Instead, all fractional shares will be rounded up to the next whole number of shares. The reverse share split will not modify the rights or preferences of the ordinary shares.
The Company's transfer agent, American Stock Transfer & Trust Company, LLC, will act as its exchange agent for the reverse share split. American Stock Transfer & Trust Company, LLC will provide shareholders of record holding certificates representing pre-split shares of the Company's ordinary shares as of the effective date a letter of transmittal providing instructions for the exchange of shares. Registered shareholders holding pre-split shares of the Company's ordinary shares electronically in book-entry form are not required to take any action to receive post-split shares. Shareholders owning shares via a broker or other nominee will have their positions automatically adjusted to reflect the reverse share split, subject to brokers' particular processes, and will not be required to take any action in connection with the reverse share split. American Stock Transfer & Trust Company, LLC can be reached at (718) 921-8200.
Additional information about the reverse share split can be found in the Company's definitive proxy statement filed with the Securities and Exchange Commission on April 1, 2016, a copy of which is available at www.sec.gov and on the Company's website.
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.
EVS Receives Over $600 Thousand in Follow-On iBar Orders
CAESAREA, Israel, Dec. 13, 2016 (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 follow-on orders for 35 iBar systems for an aggregate amount of over $600,000.
Sam Cohen, CEO of EVS, commented, “It is very encouraging to see key customers order additional iBar systems for their looms. As has been our vision from the inception of this product, as customers experience the real benefits that iBar brings, the results will necessitate the need for one on virtually every loom. As we continue to spread this technology with small initial sales, the path to substantial revenue growth is becoming even clearer, and these orders only confirm that vision.”
Fish,
There were a few key points that were likely lost in my prior long-winded ramblings on this board. Let me take another shot at posting them more succinctly.
1. In my humble opinion, a company that generates a 70% cash return on invested capital deserves a lot of slack. I don't think it is a company in need of "significant strategic and operational changes." To the contrary, I think it's doing just fine.
2. If you go back and review the CEO's public statements since taking over in 2010, he has been remarkably true to his word. After getting burned with product glitches in 2013 and with overly optimistic iBar guidance in 2015, it's understandable that he has become much more cautious.
3. It does appear that iBar is not going to ramp as fast as everyone expected. But, so what? EVSNF is not trading at some ridiculous valuation or burning cash daily. The company can afford the luxury of time, and its core business is stable. Patience here is a virtue.
4. EVSNF is focused on servicing a tough end market. On the positive side, this amplifies their competitive advantage, and helps discourage new entrants. On the negative side, introducing a new product into the mix is not an easy nut to crack. Here's what we can surmise:
A. EVSNF's customers are price sensitive given low margins, and highly sensitive to economic cycles. A large part of the business comes from Europe and Asia, and those economies might be softening.
B. Textile suppliers might be hesitant to pull the trigger on new technology when the benefits of operational improvements have historically accrued to their customers, not them.
C. Machine inspecting a material with such variability as textiles is not an easy technical proposition, and identifying errors in real-time at the loom (as opposed to the finishing line) is a formidable undertaking
D. Even if you were crazy enough to disintermediate the software algorithms from the cameras, it's not clear that EVSNF's customers would want it or know how to apply it to their business processes. Remember that EVSNF's customers are likely compensated on their ability to squeeze pennies out of their cost centers, not on their ability to implement ambitious technology initiatives
5. Before becoming too pessimistic on this name, it's worthwhile to go back and review the economics over the past 9 months. The business has required an additional $400K of invested capital in 2016 thus far (all from receivables and payables and none from inventories or PP&E). The business has parlayed that additional $400K of invested capital into over $1M of cash flow. How many businesses do you know with those kinds of economics? How many of those businesses have no debt on the balance sheet? How many of those businesses trade at low teens enterprise value to free cash flow multiples?
6. In my mind, it bears repeating -- patience is a virtue.
Cheers.
Hi Ponch, I too am highly fallible and I also make a ton of investing mistakes. When I posted that, I had just read the transcript and then went back and reread the one from 3 months earlier. It was just remarkable to me how different they were in both content and tone and that bothered me quite a bit.
As you point out, no doubt the company generates $ and might be highly profitable going forward. It might also turn into a great stock.
I will definitely keep watching and still might enter.
Fish,
While I always appreciate your perspective, I respectfully disagree with your most recent post. Before I explain why, I will point out that I am highly fallible, subject to my own biases, and far from neutrally objective, so please take my thoughts with a grain of salt.
When I invest in a company, I think of myself as being a long-term part owner in the underlying business. I am not trading, speculating in pieces of paper, or timing the market. And, even if I were, I'd likely not be successful. Why? Because I'm not that smart, nimble, or energetic. I spend large chunks of my day trying to keep up with two very attention-seeking and inquisitive young kids, aged 5 and 2, respectively. I am generally sleep-deprived (and likely short on brain cells), and running to stand-still. There aren't nearly enough hours in the day.
Because I'm thinking as a slow-footed, long-term part owner, I'm not trying to artfully promote my holding to the marginal buyer of the stock. As in poker, I believe that "cards speak." I'm sure you've heard the Graham aphorism about the market being a voting machine in the short run and a weighing machine in the long run.
In the long run, all that I care about as an owner, is the ability of my business to generate as much cash flow as it can in relation to the inputs of capital required to operate. This may sound shocking, but I'm not at all concerned with the growth rate of the company's revenues. I'm only concerned with the growth rate of the company's cash flows. And, to me, even the growth rate of the company's cash flows is secondary to the relationship between cash flows and capital input (a.k.a. "invested capital).
Let's bring this back to EVSNF. 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.
As always, I welcome your thoughts and, especially, any strong objections.
Thanks for posting that transcript. I do not own any shares but am sort of interested. But man o man after reading that it is really difficult to justify buying the stock. What a mess.
Why don't they make their software such that the customer can configure/optimize it themselves? I know the answer and it is scary...it is because without the proprietary software they are just selling a commodity grouping of cameras.
Then he says they have no sales pipeline. Then he says they don't want to even sell any more until it is perfect.
There is potential here but there needs to be some significant strategic and operational changes.
Elbit Vision Systems' (EVSNF) CEO Sam Cohen on Q3 2016 Results - Earnings Call Transcript
Nov. 24, 2016 8:10 AM ET| About: Elbit Vision Systems Ltd. (EVSNF)
Q3 2016 Earnings Summary
Press Release News
EPS of $0.01 | Revenue of $2.48M (- 14.8% Y/Y)
Elbit Vision Systems Ltd. (OTCQB:EVSNF) Q3 2016 Earnings Conference Call November 22, 2016 9:00 AM ET
Executives
Ehud Helft - GK Investor Relations
Sam Cohen - Chief Executive Officer
Yaron Menashe - Chief Financial Officer
Analysts
David Kaplan - D.B.K. Advisors
David Dreman - Dreman Value Management
Mike Schellinger - MicroCapClub
I would now like to hand the call over to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, please go ahead.
Ehud Helft
Thank you, operator. Welcome to EVS third quarter 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. Before we start, I would like to point out that this conference call may contain projections of other forward 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 demands 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 are Mr. Sam Cohen, the CEO and Mr. Yaron Menashe, the CFO. Sam will discuss some of the key highlights of the third quarter, while Yaron will summarize some of the financial highlights of the third quarter. After this, we will open the call for the question-and-answer session.
And 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 interest in our company. The third quarter continued our strong performance for 2016. We expect the revenue to be around $10 million this year which will be around 10% growth from last year. Therefore, we remain pleased with our performance to-date and we look forward to continue that in Q4. The revenue growth this year has primarily been from our Asian region, while our business in the U.S. and Europe remaining steady.
iBar growth continue its positive trend where we have seen year-over-year sales growth exceed 50% over the first three quarters of last year. To-date, we have installed over 180 units in production. The feedback from our customers continued to be positive and constructive. Using these inputs, we have continued improve this product to match our customers’ needs and demands. At the same time, these updates have allowed us to broaden the appeal and functionality of iBar to additional applications increasing our total relevant addressable markets. The majority of our sales to-date, have represented initial sales into customers or as we call it the land part of our strategy. We sell and install a small group of machines in the customers’ manufacturing facility allowing them to get comfortable with the product and measuring its return on investments.
After spending the short period of time, working with the iBar in production, the customers understand the performance and payback of this tremendous technology allowing the additional CapEx budgets to be allocated to expand units across the production floor. We believe that this extent of our iBar sales strategy is still ahead of us leading to significant and continued growth in iBar’s orders in 2017 and beyond.
Market trends in manufacturing towards automation are still – are extremely positive, especially in Asia for obvious reasons. In order to compete in globalized world, manufacturers have been forced to begin a long-term plan toward replacing intensive human labor with technology. Yet, automation and textile is still very much in its infancy. And we expect that this trend would continue to drive growth in our revenue for years ahead.
As part of our growth strategy, we recently started cooperating with one of Europe’s leading furniture retailer whereby they will push and ultimately require the textile supplier to manufacture the products utilizing EVS technology. Our technology provides the ability to manufacturers to standardize the global production and verify the global quality ensuring optimized performance from all production locations. Furthermore, we intend to expand on this strategy and are looking to work with further retailers. In summary, we remain very pleased with our performance in 2016 and we look forward to continue growth ahead.
And with that, I would like to go ahead over to Yaron Menashe, our CFO. Yaron, go ahead.
Yaron Menashe
Thank you, Sam. I will now summarize the result of the third quarter. Revenue for the third quarter of 2016 was $2.5 million. This represents a 15% year-over-year decline compared with $2.9 million as reported in the third quarter of last year and 3% below those of revenue of $2.6 million reported last quarter. Note that the third quarter of 2015 was particularly strong quarter because of especially large orders we delivered in that quarter. This quarter, gross profit was $1.4 million or gross margin of 54.9% compared with $1.8 million or gross margin of 60.3% in the third quarter of last year and $1.4 million or gross margin of 54.3% in the prior quarter.
Operating income in the third quarter of 2016 was $554,000 which is an operating margin of 22.2%. This is compared with operating income of $915,000 in the third quarter of last year, which was an operating income of 31.5% and operating income of $630,000 or 24.7% margin in the prior quarter. Net income for the third quarter of 2016 was $528,000 compared with $929,000 in the third quarter of last year and $587,000 in the prior quarter. As of quarter end, our shareholders’ equity strongly improved and stood at $5.3 million, up from $3.7 million at the end of last year and $2.2 million as of September end last year. The cash and cash equivalents and restricted short-term deposit net of bank debt amount to $3.9 million in the quarter compared with $2.8 million net at the end of last year and $1.5 million net at Q3 end last year.
And with that, we will be happy to take your questions. Operator?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] The first question is from David Kaplan of D.B.K. Advisors. Please go ahead.
David Kaplan
Hi, everyone. I have a couple of questions. First of all, on the iBar, the expansion of the iBar, what’s the focus for sales and management right know, is it more on expanding the number of customers who are purchasing iBars or the number of iBars at existing customers? That’s the first one.
Sam Cohen
The focus is very simple. We must perfect the niche initial installations. We must learn from the customers exactly, where are the advantages and disadvantages and work on the disadvantages before we continue the expense. So, we are really focusing to improve our product, our values and in parallel to that, we are training more and more engineers and hiring more and more engineers to able to support growth later on.
David Kaplan
So I guess related to that and to another point that you brought up on the call about moving into retailers or for furniture manufacturers and which is I guess an expansion of your customer base to include now not just industrial – not just industrial manufacturers, but also retail manufacturers. So, how does that play in? Are there same requirements of the customer in terms of the engineers in your ability to expand sales?
Sam Cohen
Well, you know, retailers – large retailers, they have many suppliers all over the world and they have many suppliers, many companies even if it’s one company still you are going to have many plants in many regions in the world. So, a lot of advantages, one of the biggest advantages is the fact that they can standardize and they can ensure that the quality that they are getting from their suppliers in Brazil will be identical through the one in Bangladesh, for example. So, we feel very strong that this strategy of working with retailers and help them to receive good quality on-time from many locations in the world I think is going to be very beneficial for them and for us.
David Kaplan
Okay. I am just getting a little confused, so if we can kind of define the terms a little bit, you are talking about – there are retailers, there are manufacturers, there are suppliers, so who would be the customer of the iBar?
Sam Cohen
The retailer suppliers. So, for example, let’s take JCPenney, okay. They have suppliers in India. They have suppliers in China. They have suppliers in North America. They want to make sure that the suppliers will be – will have the same quality. They want to make sure that this will be standard and they want to make sure that they will get their product on time. So, they are going to approach their suppliers to use and push their suppliers to use EVS products. That’s our goal. That’s what we are trying to do.
David Kaplan
So, they would put into their SLA agreement with their suppliers that the manufacturers will be required to use an iBar system or whatever or an EVS?
Sam Cohen
Well, I did point that iBar is not even – but it’s more IQ-TEX and SVAs, but because until retailer they care about the end product, they don’t care – it’s not that they don’t care, but they are not so enthusiastic about the profit, they want to make sure that the product that they receive will be good. So, I am not saying that this is to-date, I am not going to require to-date, but definitely what we have seen today is first of all they create better awareness within their suppliers and the suppliers that have quality issues they call them and they push them to start using EVS product.
David Kaplan
Okay. So you mentioned specifically the new furniture supplier customer, retailer or whoever it was and I imagine that’s a relatively new customer and so can you talk a little bit about…?
Sam Cohen
No, no, no, the supplier – no, no, no the retailer is not EVS customer.
David Kaplan
Okay.
Sam Cohen
The retailer has suppliers who supply fabric to him, okay and they are asking their suppliers to use EVS product, but their retailer is not EVS customer, okay.
David Kaplan
Alright. So has there been a growth in the number of customers who are using the iBar for now or this is you are saying iBar is totally different product anyway?
Sam Cohen
There has been a growth, but this has nothing to do with the retailer.
David Kaplan
Right. Okay, great. And then just my last question, I think I thought that is the floor on the calls with you guys, relative to liquidity of the stock and if there are any plans in the near-term for EVS to do something about the liquidity profile?
Sam Cohen
Well, we are – if I understand you are asking about liquidity right you are asking, what are we doing about liquidity?
David Kaplan
Yes, stock trading liquidity, yes.
Sam Cohen
Trading liquidity. Well, we – in our plans, first of all, I think we improved the liquidity in the last few months very much. We are – we just been noticed that some of the bankers in Israel – one second please – sorry about that, we have just been noticed that some of the banks in Israel will allow trading of shares that are minimum price will be $105. So, we believe that this is something that we will be happy to do and I believe we will do it in the next few months or quarters. And I believe this will open for especially Israeli traders to the ability to go ahead and buy themselves EVS shares.
David Kaplan
Is that only if it’s traded on a large exchange rate if it continues to be OTC there would still be – it’s the dollar amount that they trade or care about?
Yaron Menashe
It can be an OTC.
Sam Cohen
It can be an OTC too.
David Kaplan
Okay, great. Thanks very much.
Sam Cohen
Okay.
Operator
The next question is from Michael [indiscernible] of National Securities. Please go ahead.
Unidentified Analyst
How much cash was generated in this quarter?
Yaron Menashe
It was almost similar to our net deposit around $0.5 million.
Unidentified Analyst
Okay. You sort of seem to imply that the iBars that are placed right now have some kinks in them that you are working with the clients to perfect, is that taking a little bit longer than you thought because of that?
Sam Cohen
Well, personally I think it took more time than we initially thought obviously. We thought that it’s going to much shorter, but it takes more time. And I think the main reason is we know that we are ahead of any competition and we want to make sure that when the growth will be very strong we want to make sure that our product will be mature and we will spend less time in this way we will have much better profit. We spend less time installing these machines and supporting these machines and make sure that the customers are happy and the expansion will be much faster and smoother. So, we prefer at this point when we have around 200 machines and everything is still controllable to be in a position where we control the situation. We perfect the product. We perfect all the features that any customer is looking for and then we are moving to – in this way we are moving from one or two applications we are expanding it to three, four, five applications and segment in the textile industry in this way we are – we make sure that when we are going to have 1,000 machines, everything will be okay.
Unidentified Analyst
Got it. Finally and maybe you addressed this and I missed it, but this quarter was down 15% from a year ago, can you go into a little bit of the explanation of that and that’s it? Thank you.
Sam Cohen
Well, first of all, third quarter of last year was exceptionally strong. It was one or two big orders that we received in the middle of last year around June, July last year and we had – contractually we had to deliver it in the third quarter. However, when you look at this kind of – in our business if shipments didn’t arrive on time, then you are going to have $300,000 or $400,000 shifting from one quarter to another. So, we need to look at this as two quarters or three quarters and then we can – or 1 year and then we can measure the real performance. Again, I don’t see this as something that we should be concerned the opposite. Again, when you look at nine months, nine months this year or nine months last year you see that there was a nice growth between them.
Unidentified Analyst
Great. Thank you very much.
Operator
The next question is from David Dreman of Dreman Value Management. Please go ahead.
David Dreman
Hi, everybody. I just want to go back to the iBar for a little bit can you talk a little bit about what your customer pipeline for the iBar looks like?
Sam Cohen
Well, it’s hard to say, because we are still expecting some orders by the end of this year. We – I don’t feel like we have a huge pipeline, but it’s in the same pace of what we have seen up until – in 2016.
David Dreman
Okay. And what about going into 2017?
Sam Cohen
Again, it’s hard to say, it’s really depend on the budget meetings of all of our customers. Obviously, we have sales forecast and we know what should come what we believe will be the numbers, but because it’s very difficult to predict, I cannot really tell you what I – I cannot really predict what’s going to happen. We expect and we believe that 2017 will also have some growth in the iBar. Again, it’s very difficult to say if it’s going to be the second quarter or the third quarter where we are going to start seeing more and more orders coming in, but I believe in 2017 – sometime in 2017, we should start feeling that the number of iBars will start growing and give us what we expect and what we worked so hard for.
David Dreman
Just as a follow-up to that, what sort of segments are you selling the iBar to?
Sam Cohen
Right now, we are in the high end and mainly to the automotive industry. We just started printed circuit boards, glass fabric that goes into the printed circuit board industry. But it’s more high end automotive technical fabric military applications, that’s where we are going to start and I believe we will continue to do this in 2017.
David Dreman
So, it’s a very directed sales segment as opposed to just letting the sales team run wild and try to get customers in various sectors?
Sam Cohen
Yes. At this point, yes, again, the day we will feel that we have everything in place all the infrastructure like service sales, support manufacturing, when everything will be in place, I think we will lose everything and we will start really pushing this very strong across the board. Just as a side note, we are renovating our offices here, preparing it, increasing dramatically the area of production. So, those are lot of things going on in EVS in order to make sure that everything will be ready for further growth.
David Dreman
Will that timeline that’s sort of time when you will be ready to go for floors, would that happen in 2017?
Sam Cohen
I hope so. This is something that we are working very hard for this to happen. But it’s again, it’s hard to predict, I am not saying this because I have tried to predict in 2015 what’s will happen in 2016 and I have seen some delays. So, this is what our plan – we plan to do that. We plan that this will happen in 2017. But I feel very, very strong that it will happen. It will happen in the – let’s say 18 to 24 months. That’s how we feel about it.
David Dreman
Okay. Well, I appreciate your time and good luck on the coming quarter.
Sam Cohen
Thank you very much.
Operator
[Operator Instructions] The next question is from Mike Schellinger of MicroCapClub. Please go ahead.
Mike Schellinger
Yes. Thanks Sam for taking my question. Can you comment on the number of iBar customers that you have landed thus far and maybe how it’s – how that number is growing from say the beginning of the year or a year ago?
Sam Cohen
Yes. In fact, Mike, we – I can say on purpose, but we didn’t increase the number tremendously from the beginning of this year. And the main reason was just like I mentioned before we wanted to perfect our product. We wanted to make sure the infrastructure is in place globally. People in China and India and Asia and United States, North America and Europe, everybody will be ready. Production will be ready. And we really wanted to fulfill all the customer’s requirements and received all the input from them and make sure that we will add all the features that they require before we move on to the next step. So, we increased it by let’s say three or four customers. We have a plan – currently, we have a plan and we will complete this plan by the end of this year. This is part of our budget meetings for 2017. But we are working very closely with all of our sales managers all over the world to identify the next batch or the next wave of customers where we want to have land and expect the current customers to expand and give us repeat orders for the iBars that they currently have. One thing to remember and I think that this is very important to understand, our legacy business is still very strong growing. The demand is incredible, especially in Asia. I mentioned this several times. So, I can say that we have very nice variety between let’s say on segments that we are working on different area in the industries, different products. So, the company is very stable, mature and we feel very good about iBar as well as the legacy business.
Mike Schellinger
Okay, thank you very much.
Operator
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’ website www.evs.co.il. Mr. Cohen, would you like to make your concluding statement?
Sam Cohen
Thank you. On behalf of the EVS management, I would like to thank you for joining us today. Have a good day.
I just listened to the CC and I must admit that I'm impressed with the growth prospects of this little company. Management is expecting huge growth starting possibly in 2017 ( and certainly in the next 18-24 months) but their focus is currently on perfecting the product to their customers' demands before pushing for an accelerated expansion ( this way they try to avoid having to do too much service work on too many installed machines). Other highlights included the fact that soon Israeli banks will be allowed to invest in companies with a share price as low as $1.05 per share which should benefit the company once it gets there. Also interesting is that they have increased significantly the number of customers they're working with since the beginning of 2016 and it seems that a major European furniture retailer might soon ask its suppliers to ask their manufacturers to use the EVS's systems in an effort to increase and standardize the quality of the finished product.
I'm still not invested here but I'll wait either for a price under .30 or above .36 to buy my first shares.
For those interested in listening to the call they can do it here ( you may need to replay some portions due to their accent): https://www.evs.co.il/index.php?option=com_content&view=article&id=55&Itemid=203
I suggest you tune into EVS
Q3 conference call and come
to your investment decision.
As for me, i regard EVS as a
company with a very positive
risk/reward ratio.
I have been disappointed by
company performance in the
past, but believe in the
company's future.
I admit to not following super close since I don't own any shares yet.
midastouch, What is your overall take on this company? Is there actually a big market for their products? Are they done diluting via printing shares? Bottomline...Does the CEO care about shareholders?
Thanks
Sam Cohen, CEO of EVS commented,
Elbit Vision Systems Announces Third Quarter 2016 Results
GlobeNewswire•November 22, 2016
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. (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.”
Conference call details
The Company will also host a conference call today, November 22, starting 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: 1 866 860 9642 at 9:00 am Eastern Time
Israel: 03 918 0685 at 4:00 pm Israel Time
International: +972 3 918 0685
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
Elbit Vision Systems Schedules Third Quarter 2016 Results Release for November 22, 2016
CAESAREA, Israel, Nov. 14, 2016 (GLOBE NEWSWIRE) -- Elbit Vision Systems Ltd. (EVSNF), a global provider of vision technology for automatic surface inspection and in-line quality monitoring systems, announced that it would be releasing its financial results for the third quarter of 2016 on Tuesday, November 22, 2016 before the US markets open.
The Company will also host a conference call the same day, Tuesday, November 22 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: 1 866 860 9642 at 9 am Eastern Time
Israel: 03 918 0685 at 4 pm Israel Time
International: +972 3 918 0685
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.
Any idea when they'll report earnings?
I like what I've read so far about this company. It's on watch for a breakout above 52 wks high then I'm a buyer too.
Some very heavy buying volume
action taking place today!
To approve a reverse share split of the Company’s Ordinary Shares at an exchange ratio of not less than 1-for-5 and not more than 1-for-30 and to authorize our Board of Directors, in its discretion, to direct the Company's management to implement such reverse share split at an exchange ratio within this range within nine months following the Meeting and to amend the Articles of Association of the Company accordingly.
See
#msg-121612470
Have they indicated a reverse split was in their plans?
Hi Fishhunter,
In one of the conference calls the CEO was given a question about the share - would they see any more dilution - and he explained about the investor converting his warrants and made a statement like "absolutely no" that they would not be increasing share count in the near future and they don't need new cash to grow. Right now the issue is training the staff enough to be able to give good customer support to new clients. Sales is chomping at the bit to sell more units. The building of the units is not a problem. Also, they have a facility to build their new units in either America or Israel. The CEO said they could build them out of either plant. So if their was Israeli unrest then the units could still be built. In that case if they have all their support staff in Israel and there was unrest, the issue would be with the support staff.
I also like the niche focus. Provides a moat to protect against entrants.
I would say that the software is the most important part the system, but also that you can't divorce the software from the hardware. To build a solution like they have would, I would imagine, require experimentation with different cameras, experimentation with different lighting levels. Perhaps integrating the output of multiple cameras, having cameras at different angles, with varying levels of light shielding, and perhaps integrating the output of different lighting sensors. So it isn't as though you could just hire some software developers to go build a similar system. You might also need hardware - mechanical and electrical engineers. The experimentation with various hardware, I would imagine, would require a big time and money effort to get right in order to build a similar product. The CEO has said in conference calls that he believes it would cost a competitor $20-30 million to build a textile inspection. Which is not a huge number, but it is the current value of the company. I think that competitors are surely watching, but to be attracted to the space there would need to be more money in it for them. Hopefully Elbit will make alot of money and bring on the competition. The CEO has said that they have developed a very complex vision system for dealing with textiles, and that their vision system could be used for many other vision fields, but that it would be difficult for other vision system providers to create something that can do textiles because it is more complicated.
There is extensive research on this stock by the members of MicroCapClub. Members have posted reports of their visits to the company and debated bull and bear scenarios for the company. It is one of the more closely followed companies of the last few months there. I am a member and am long EVNSF stock. It is well worth the price of viewing membership if one is unwilling to submit an idea application for full access, free membership. There seem to be several serious posters here that could benefit from the research there. I highly recommend it.
Report of Foreign Issuer (6-k)
Elbit Vision Systems Ltd. (the “Registrant”) held an Extraordinary General Meeting of Shareholders on October 5, 2016 at 14:00 (Israel time) at the Registrant’s offices at 7 Bareket St, Industrial Park Caesarea, Israel (the “Meeting”). Copies of the Notice of Extraordinary General Meeting, Proxy Statement and Proxy Card relating to the Meeting were filed on Form 6-K by the Registrant on August 31, 2016.
The Registrant is announcing that the resolutions relating to the: (i) re-election of Ms. Orit Stav as one of the External Directors of the Company for an additional three year term, commencing on October 5, 2016 and approval of her remuneration as External Director;
(ii) election of Mr. Ervin Leibovici as one of the External Directors of the Company for an initial three year term, commencing on December 11, 2016 and approval of his remuneration as External Director;
(iii) re-approval of the Company's Compensation Policy; and
(iv) approval of the amended form of indemnification agreement letters between the Company and its current and future officers and directors, were all duly approved by the shareholders of the Registrant at the Meeting.
Fish,
I think that you're right, to a degree. While EVSNF technically generates revenues from the sale of hardware products, some of its competitive advantage appears to reside in its software expertise (which includes writing the software to run on the vision system products as well as programming the hardware to run the software efficiently). But I'd characterize the competitive advantage more broadly by classifying it as "knowhow."
I believe that EVSNF's products are made primarily with off-the-shelf components (IBar, in particular). I believe that it is the low cost producer in its space, and I believe that its ability to stay ahead of competitors centers around continuous innovation.
Like you, I like that EVSNF is predominantly focused on the textile space. It represents a specific niche that the company knows well, and has both struggled and persevered in addressing over an extended period of time. As a result, I think it enjoys a lead in that niche and, accordingly, sees an interesting runway in front of it. There are obviously no guarantees here, but the longer-term opportunity (to replace the manual inspectors of its customers with vision systems) appears promising to me (although, in the spirit of full disclosure, my judgment is far from infallible). Here's my elevator pitch:
1. The value proposition of EVSNF's products are clear to me -- (1) improving yields and reducing raw material waste and (2) replacing labor costs associated with manual inspectors.
2. The business appears to be very attractive -- high cash returns on invested capital (although those returns are a bit overstated because the company doesn't yet pay taxes), and trades at what appears to be a very reasonable price (if one assumes the veracity of the publicly-reported financial statements).
3. Management seems aligned with shareholders by having skin in the game, appearing not to be greedy (despite effectively controlling the board), and demonstrating a 6-year track record of success and credibility turning around the company, albeit with some setbacks (e.g., 2013, missed iBar guidance in 2015).
Cheers.
One "company" question I have is....At its core is Elbit really a software company?
I am very new to looking at this company but it seems to me they are using off-the-shelf cameras and what makes it a "system" or a "product" is the software that ties it all together.
Could also be indications that the recently-completed quarter's YOY growth will be weak, especially given the tough compare with Q3 of last year. The realization that it might take longer to penetrate a price-sensitive niche like textile manufacturing with a high-price point product is, in my humble opinion, all the more reason to be long-term focused on the investment case. Things might be lumpy in the near term.
Nevertheless, it's hard to read much into a move like this on a volume level (about 100k), that, while higher than the average daily, is hardly extraordinary in the context of trading volumes from the past 3 months or the past year, respectively.
What's up? R/S announcement leakage?
BTW, i am all for a R/S, provided
the intention is to move to a better
exchange!
Thank you Ponch! You are a Saint for providing all that info as it does take real time and effort to do so.
At this point I am about 90% certain I will start to buy some shares relatively soon. There is a ton to like here. My only 2 concerns are the rising share count (less concerned now) and that they are based in Israel. Trust me, I love the country of Israel and respect the Israeli people more than about any other country but I do fear the stability of the region.
Sort of an intangible that I really like is that they are focused on the textile industry. To me that is infinitely better than being focused on printed circuit board inspection or semi-conductor or stuff that gets a ton of attention.
Thanks again and I'll keep in touch.
Fish,
I'm excited that you're taking a look at EVSNF. Your posts on the VTSI board have been immensely valuable, conveying both differentiated insight and common sense. Hopefully, you see enough value in EVSNF to share your thoughts on this board.
To answer your question, a prominent Israeli businessman and investor, Avi Gross, funded the company via a private placement (PIPE) and convert in 2012. His cash infusion helped, in part, to clean up the balance sheet, and bring the company from a net debt position to a net cash position (and ride out 2013, when the company burned over $1M of cash as a result of a technical glitch with their core product). As part of that 2012 financing, Gross received two warrants. He converted the second (and larger) of those warrants at year end 2015. The conversion of those warrants is why you see the big jump in diluted share count between 2015 and 2016. Take it with a grain of salt, but the CEO has indicated that Gross is an asset in opening doors in Asia (e.g., China, India) given significant past business experience in that part of the world. EVSNF has recently announced some customer wins in China and Thailand.
The relevant passages from EVSNF's filings are quoted below:
Pursuant to the Private Placement Transaction, consummated on December 10, 2012, we sold 5,263,158 ordinary shares to Mr. Avi Gross at a price per share of $0.095 for gross proceeds of $500,000. Additionally, under the Private Placement Transaction, Mr. Gross provided our company with a $300,000 convertible loan, or the Convertible Loan, which may be converted, in whole or in part, at a price per share of $0.095, by June 10, 2013. Should the Convertible Loan not be converted, the principal and interest will be repayable over the course of twelve (12) months following June 10, 2013. As part of the Private Placement Transaction, Mr. Gross also received two warrants to purchase our ordinary shares, of which the first warrant, or the First Warrant, is exercisable for up to $200,000 of our ordinary shares, at a price per share of $0.095, six (6) months following the issuance of the First Warrant, and the second warrant, or the Second Warrant, is exercisable for up to $1,000,000 of our ordinary shares, at a price per share of $0.20, unless the Company achieves gross revenues of less than $19,000,000 for the year ending December 31, 2014, in which case the exercise price per share shall be reduced to $0.17. The Second Warrant is exercisable during the period between June 10, 2013 and February 5, 2015. Exercise of the Second Warrant is contingent on Mr. Gross converting and/or exercising at least 50% of the aggregate number of shares issuable under both the Convertible Loan and the First Warrant, and subject to that threshold being achieved, the maximum amount issuable will be proportionally reduced based on the aggregate portion of the Convertible Loan converted and the First Warrant exercised.
Pursuant to the consummation of the Private Placement Transaction, Mr. Gross’ holding in the Company constitutes 7.025% of the outstanding share capital of the Company (not including the shares issuable under the Convertible Loan and the First Warrant and the Second Warrant).
Additionally, in accordance with the Private Placement Transaction, Mr. Gross, is entitled to appoint an observer to our board of directors, and in the event that Mr. Gross converts and/or exercises at least 50% of the value of the Convertible Loan and the First Warrant, Mr. Gross will be entitled to appoint a director to our board of directors.
Why does the outstanding share count keep rising every year? In the latest Q2 report it said there were 93mil shares vs 85mil a year ago and about 78mil 2 years ago????? Thank you.
Breaking 52W/H
($ 0.350)
Elbit Vision Systems Ltd. (QB (EVSNF)
$ 0.355 ^ 0.01 (2.90%)
Volume: 436,850
Elbit Vision Systems Ltd. (QB (EVSNF)
$ 0.35 ^ 0.007 (2.04%)
Volume: 215,200
Touching the 52W/H
When will it break it?
Looking for more albeit
not today. In the near
future - for sure (imho)
Nice to see you again ddbl!
News from Thailand Midas. No doubt stock asleep for too long ~ 40's coming today? We shall see..
GL, ddbl
Elbit Vision Systems (EVSNF)
0.345 ^ 0.0151 (4.58%)
Volume: 315,105 @ 3:19:19 PM ET
Indeed significant sales, but
what i like even more is this
statement:
Sam Cohen, CEO of EVS, commented,
The company seems active this month. 2nd reported sale of the older product line this month.
EVS Receives a $600,000 Order From a Top Tier Global Apparel Manufacturer for Its Facility in Thailand
CAESAREA, Israel, Sept. 22, 2016 (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 received orders for IQ-TEX4 and SVA systems, amounting to $0.6 million to be delivered this year. The orders were from an important, top-tier global manufacturer of apparel. The systems will be installed at one of their manufacturing facilities in Thailand.
Sam Cohen, CEO of EVS, commented, “This order is a significant and successful step in broadening our penetration of the apparel market in Asia. It represents the first of what we believe will be many more future orders from this customer. It also gives us an important reference in Thailand to further penetrate the huge textile market in Asia.”
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
Elbit Vision Systems (EVSNF)
0.35 ^ 0.0326 (10.27%)
Volume: 258,410 @ 3:58:46 PM ET
Touching the 52W/H
Sam Cohen, CEO of EVS, commented,
EVS Wins Orders of About $1 Million in China
CAESAREA, Israel, Sept. 12, 2016 (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 today that it has received orders totaling about $1 million from China.
These orders are a cumulative total from multiple Chinese manufacturers. The first was from a new customer for seven (7) nonwoven inspection systems in which EVS won in a highly competitive bid. There is also a potential for additional orders at a later stage with this customer.
The other was a significant order for IQ-TEX4 automatic inspection systems in conjunction with Shade Variation Analyzers. This was a repeat order from an important customer, who made their initial investment last year. After seeing the benefits of automatic vision technology, they have made the decision to expand their automation by using EVS’ products.
Sam Cohen, CEO of EVS, commented, “These orders represent real success in our strategy to further penetrate the important textile manufacturing market of China. We are pleased with both of these orders for different reasons. Our nonwoven inspection system win demonstrates the technical leadership of our systems in how we are able to meet our customers' demands and exceed our competition’s abilities while developing a new partnership with potential for follow-on orders. Our second order is a solid demonstration of how the initial sales of systems do indeed lead to a long-term relationship and ongoing repeat business.”
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
Elbit Vision Systems (EVSNF)
0.31 ^ 0.012 (4.03%)
Volume: 245,744 @ 3:16:15 PM ET
Nice action, especially in view
of the general market!
Just listened to the conference call. What a great outlook.
Sounds like the company has plenty of pent-up demand. The limiting factor right now is the support staff. They are having a hard time supporting the product once it is installed. So they are artificially limiting the number of new installs and new customers to only what the support people can handle. Also, they can manufacture the new iBar systems in their facility in the U.S. or in their Israel facility and so production is not an issue. It seems from what the CEO said that the production can ramp up at least 10 times with no issue. Sales can ramp > 10 times with no issue and the sales team is clamoring to sell more. The only limiting thing is the support side which they are working on aggressively trying to train support staff. They just got a patent on their technology. They are fully prepared to uplist to the Nasdaq and have met all the requirements, they just want to optimize the timing of that. Also, the CEO sounded like there were no plans to increase share count and there are no upcoming capex requirements. So it seems like the stock is primed for years of rapid growth, without needing to invest new money. They have lots of customers wanting their product and their stock is cheap. The CEO seems to also have a long-term view judging from his comments in the patent P.R.
The day is still young though!
I guess yesterday's HUGE volume
took place due to today's
patent news!
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