On Wednesday, Avigilon (TSX:AVO) reported its Q3, 2012 numbers. The company earned $2.16-million on revenue was $25.5-million, which was a 69% increase over the same period last year.
CEO Alex Fernandes said the company delivered against traditional headwinds.
“It was another strong quarter for Avigilon as we delivered record revenues and earnings in a traditionally slower third quarter sales season,” he said, adding: “The third quarter was also highlighted by a $26-million financing, which further strengthens our balance sheet to pursue the significant growth opportunities in global surveillance markets. To capitalize on these opportunities, we are highly focused on adding new talent to our sales team, continuing our track record of product innovation and investing in marketing to make Avigilon a household name in our industry.”
Clarus Securities analyst Sean Peasgood says the quarter outperformed his expectations. He says AVO’s continued execution has renewed his confidence that its historically strong growth rates can continue for “several more years”. In a research update to clients this morning, Peasgood maintained his BUY rating on Avigilon, but raised his target to $13.50 from his previous $9.
Founded in 2004, Avigilon designs and sells next-generation surveillance systems. Management says the surveillance market is fragmented because to date there has been no integrated supplier of equipment, meaning the majority of end users do not have high definition systems due to compatibility issues and a lack of industry standards. Avigilon allows clients operating mission critical environments such as prisons and casinos to have install a high def system that is reliable as analog, and has the added benefit of providing video resolution that is standing up in courtrooms, which reduces legal costs. Avigilon has sold over 210,000 camera and software licenses that have been installed at more than 12,000 customer sites.
Peasgood says one of the keys to Avigilon’s future success will be in working with major international integrators. He notes that on its Q3 conference call, the company said it was now on the approved price list with Tyco Integrated Security. The Clarus Securities analyst says this is a step that could open the door to other large integrators like Johnson Controls and Honeywell, and could significantly increase future revenue.
At press time, shares of Avigilon were up 5.7% to $10.90.