Vancouver, British Columbia, June 9, 2016 – Viscount Systems, Inc. (OTCQB:VSYS) (“Viscount”), a software company specializing in physical and logical security solutions, today announced its first quarter financial results for the period ending March 31, 2016.
“Viscount is focused on aligning operations to improve execution across the business,” said Scott Sieracki, CEO, Viscount Systems. “Our decision to sell the service division will help us realize further cost reduction and efficiencies. In the first quarter, customer demand for the Freedom unified access control solution remained high and our sales team has worked diligently to drive opportunity in our target markets to support sustained growth.”
First Quarter 2016 Highlights
Sales for the three months ended March 31, 2016 and 2015 were $981,878 and $1,054,480, respectively, reflecting a decrease of $72,602 or 7%. Freedom sales for the three months ended March 31, 2016 and 2015 were $329,707 and $441,105, respectively, reflecting a decrease of $111,398 or 25%, which was mostly due to lower Freedom equipment sales during the three months ended March 31, 2016. The decrease in Freedom sales were partially offset by an increase of $38,796 or 6% from Mesh/Enterphone sales for the three months ended March 31, 2016, compared to 2015. Mesh/Enterphone sales for the three months ended March 31, 2016 and 2015 were, $652,171 and $613,375, respectively.
Gross profit for the three months ended March 31, 2016 and 2015 was $530,079 and $490,817, respectively, an increase of $39,262 or 8%. For the three months ended March 31, 2016 and 2015, cost of sales were $451,799 and $563,663 or, as a percentage of sales, was 46% and 53%, respectively. Included in cost of sales is a recovery of inventory obsolescence and shrinkage amounting to $51,278 and $0 for the three months ended March 31, 2016 and 2015, respectively.
Gross margin for the three months ended March 31, 2016 and 2015 was 54% and 47%, respectively. During the three months ended March 31, 2016, management has continued to focus on controlling costs by using multiple suppliers to ensure that the best and most cost effective raw materials are used in all of our products.
The gross margin percentage for three months ended March 31, 2016 of our product categories of Mesh/Enterphone and Freedom, were 47% and 67%, respectively. The gross margin percentage for the three months ended March 31, 2015 of product categories of MESH/Enterphone and Freedom were 28% and 73%, respectively.
Income from Discontinued Operations
Discontinued operations represent the company’s servicing business as a result of the its decision to sell this line of business.
Income from discontinued operations is attributable to the net income related to the Service Division as a result of our decision in January 2016 to sell the Service Division. Income from discontinued operations of $82,993 for the three months ended March 31, 2016 is comprised of sales revenues of $222,965, cost of sales of $89,061 and operating expenses of $50,911. Income from discontinued operations of $96,728 for the three months ended March 31, 2015 is comprised of sales revenues of $270,416, cost of sales of $96,715 and operating expenses of $76,973.
A replay of the financial results conference call is available on the Viscount Web Site.
Viscount is the leading provider of next-generation, IT-centric access control and identity management applications. Viscount’s Freedom application platform allows seamless unification of the physical and digital security worlds by replacing discrete, self-contained systems with an integrated security system that is sophisticated enough to protect today’s critical business assets, and flexible enough to keep up with the evolving IT infrastructures of government and private organizations. For more information please visit: www.viscount.com
Safe Harbor Statement
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Rhianna Daniels Hile