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Edited press release follows:
SENSIO Reports its Financial Results for the First Quarter 2011
Significant increase in revenues thanks to live 3D
MONTREAL, QUEBEC–(Oct. 18, 2010) – SENSIO Technologies Inc. (SENSIO) (TSX VENTURE:SIO), inventor of SENSIO® 3D technology, today presented its financial results for the first quarter of fiscal year 2010-2011. This first quarter, covering June 1 to August 31 2010, was marked by SENSIO’s participation in the 2010 FIFA World Cup™.
“The FIFA World Cup gave SENSIO excellent exposure, enabling us to generate a substantial increase in revenues in the first quarter, with broadcasters and cinema-operators all wanting to be part of this first worldwide live 3D event. On the infrastructure side, we continued our strategy of increasing our presence throughout the supply chain, signing licence agreements for integration into chips destined both for production and home-entertainment products” says Nicholas Routhier, President and CEO. “The results of this first quarter of 2011 have validated our efforts, and we are confident in maintaining our strategic direction in the coming months.”
Highlights of first quarter
* Broadcast of 2010 FIFA World Cup soccer, using SENSIO® 3D, to 33 countries
* Over 700 cinema screens throughout the five continents are now equipped to show live 3D events in SENSIO® 3D
* Signature of a licence agreement with Trident Microsystems, a leading provider of 3D-capable set-top box and TV semiconductor solutions, to integrate SENSIO® 3D
* Signature of a licence agreement with GEO Semiconductor to integrate SENSIO® 3D into its GEO RealtaTM T2 chip used worldwide by manufacturers of leading broadcast and media systems
* Increase in revenues of 200.5% compared to previous year, from $210,161 to $631,547
* Gross margin reaches 98.9% for this quarter
Live 3D – everything in place for new events
The 2010 FIFA World Cup is an excellent reference to add to the list of achievements SENSIO can leverage to convince content-producers of the viability of live 3D events. Coupled with the growing SENSIO 3D Live Global Network™, which by the end of the FIFA championship had reached over 700 cinemas in 33 countries, this extremely high-profile event has been very beneficial for SENSIO, and this can be seen in the first-quarter revenues.
“The World Cup was a very challenging project for us due to its worldwide nature and the very short time-frame. To have achieved such good results is extremely gratifying for the whole team. We can see that SENSIO’s success in this arena is very much linked to the success of the events in which we participate,” says Mr Routhier. “The members of the SENSIO 3D Live Global Network™ could see the advantage of screening such a popular event as the soccer World Cup in 3D, and readily climbed aboard. Each new phase of the network’s expansion will come as and when new events are programmed.”
SENSIO success a reflection of demand
The first quarter also showed continued progress for SENSIO’s chip strategy. Signing licence agreements for integration of SENSIO® 3D into chips ensures that manufacturers of equipment for the entertainment industry will be able to continue to source ICs from their preferred suppliers to provide SENSIO’s high-fidelity 3D encoding and decoding.
“The signature of these agreements shows that market demand is there,” specifies Mr Routhier, “and right down the line. GEO Semiconductor supplies chips to broadcast equipment manufacturers, and Trident supplies to consumer electronics manufacturers. That’s demand upstream and downstream.”
Summary of financial results
SENSIO’s revenues for the first quarter of fiscal year 2011 were $631,547 compared to $210,161 in the same quarter of the previous year, an increase of $421,386 or 200.5%. These revenues were generated by live 3D event licensing related to the soccer world cup. SENSIO’s gross margin for the quarter was 98.9% compared to 56.8% the previous year. This is attributable mainly to the new per-event licensing fee model.
Selling expenses rose from $257,288 in the first quarter of fiscal 2010 to $499,279 for the comparative quarter in fiscal 2011. This increase can be chiefly explained by the addition of staff to support marketing efforts, a grant of stock options to an external consultant and a non-recurring increase in promotional expenses.
During the quarter, R&D expenses rose by 90.3% from $89,734 to $170,743 over previous year. The variance is primarily due to new staff hires and an increase in costs related to new product development.
Administrative expenses stood at $313,372 in the first quarter ended August 31, 2010 compared to $181,229 in the comparative quarter the previous year, an increase of 72.9%. The increase can be explained by the hiring of administrative staff, a non-recurring increase in professional fees and an increase in operating costs following the extension of our office space and additional resources.
About SENSIO Technologies Inc. (SENSIO):
SENSIO Technologies Inc. (TSX.V: SIO) — With its significant expertise in the field of 3D video, SENSIO develops and markets stereoscopic 3D digital compression, decompression, and display-formatting technologies. Its solutions are deployed on a global scale by content creators, games developers, broadcasters, specialty channels, and digital cinemas, allowing customers to generate substantial additional value-added revenue streams.
Its flagship technology, SENSIO® 3D, allows the high-quality distribution of 3D content through conventional 2D broadcast networks (cable, satellite, IP) and playback on any 3D display device, as well as home theatre and digital cinema projectors. This technology and the SENSIO 3D Live Global Network™ of over 700 cinema screens in 33 countries have allowed SENSIO to make its mark by enabling broadcast of high-profile live 3D events in cinemas worldwide. SENSIO is listed on the Toronto TSX Venture Exchange.