Paris, 22 September 2016
FINANCIAL RESULTS FIRST SEMESTER 2016:
IMPROVEMENT IN CORE REVENUE STREAMS AND GROSS PROFIT; DECREASE OF SEASONAL LOSSES
| In € millions | H1 2015 | H1 2016 | Variation |
| Revenues | 21.9 | 20.9 | -5% |
| Cost of goods and third-party services resold | 4.5 | 2.7 | |
| Commercial gross profit | 17.4 | 18.2 | +5% |
| Other cost of revenues | 6.8 | 7.1 | |
| Gross profit | 10.5 | 11.1 | +5% |
| Research and development | 5.9 | 6.1 | +3% |
| Selling and marketing | 4.9 | 4.5 | -8% |
| General and administrative | 2.4 | 2.3 | -4% |
| Current operating income | (2.7) | (1.9) | +31% |
| Operating income | (2.7) | (1.9) | |
| Net income, Group share | (3.3) | (2.1) | +36% |
Going forward, Dalet publishes its Income statement by function, so as to be aligned with the presentation generally used by software companies. The income statement by nature of expense is presented as well in the appendix to this press release.
DALET, a leading provider of software solutions for the creation, management and distribution of multimedia content for broadcasters, operators and content producers, has published its financial results for its first half-year ended June 30, 2016 as approved by its Board of Directors on 22 September 2016.
Total revenues for the semester were €20.9 million, due to a 43% decrease in Hardware resale (€3.3 million revenues), a low margin non-strategic business for Dalet. Overall software revenues (comprising licenses and support revenues, €13.4 million, +10%) and associated services (€4.2 million, +7%) are both improving. Due to this favorable sales mix, and to good control of other cost of revenues, gross profit was up by 5% (€0.6 million increase).
Growth in software and service revenues resulted from new projects from leading broadcasters and content producers, in particular in North America and Asia-Pacific, and from the continued increase in recurring support, due to the year on year growth of the installed base.
Current operating income improves by €0.8 million
Selling and marketing expenses diminished by €0.4 million mainly due to the base effect of non-recurring marketing and selling expenses in H1 2015. Research and development expenses were up 3%, as the Group makes progress on its technology roadmap and product enhancements. General and administrative expenses were down by €0.1 million.
The resulting current operating loss decreased by €0.8 million at -€1.9 million.
It is noted that Dalet's business experiences significant seasonality, with higher revenues in the second semester compared to the first semester, while expenses are almost fixed.
After €0.1 million in financial expenses and €0.1 million in tax, net income for the semester amounted to a loss of €2.1 million as compared to a loss of €3.3 million for the first semester of 2015.
Low net debt
Dalet shareholder's equity stood at €12.2 million on 30 June 2016. Cash flows linked to operations amounted to €1.7 million, as compared to €1.1 million over the first semester last year.
These cash flows linked to operations covered all investments for the period (€1.6 million). Cash assets amounted to €4 million on 30 June 2016, gross financial debt was €4.7 million.
Perspectives
DALET financial results are in line with its business plan after these first six months. Backed by new contracts under negotiation, in particular in Europe and in the US, Dalet expects continued growth in the second half of 2016. As previously announced, Dalet expects continued growth in 2016 of its gross profit, and progressive improvement of its operating margins, with an objective of a current operating margin of 4 to 5% by 2017.
DALET just participated at the IBC tradeshow in Amsterdam (September 13 to 19), one of the largest international tradeshows for broadcast technology. Dalet gave a preview of its innovative upcoming solutions, in particular with the release of Dalet xN IMF Maker, an on-demand service available through Amazon Web Services (AWS) and Microsoft Azure Market, the first such service on the market capable of generating video packages compliant with the IMF (Interoperable Master Format) standard for OTT distribution.
Next publication
Q3 revenues on 3 November 2016 after the close of trading
About Dalet Digital Media Systems
Dalet solutions enable broadcasters and media professionals to create, manage and distribute content to both traditional and new media channels, including interactive TV, the Web and mobile networks. Dalet combines into a single system a robust and proven Asset Management platform with advanced metadata capabilities; a configurable workflow engine, and a comprehensive set of purpose-built creative and production tools. This integrated and open environment enables end-to-end management of the entire News and Sport and Program content chain, and allows users to significantly improve efficiency, and to maximize the use and value of their assets. Dalet's solutions are delivered through a dedicated Professional and Integration Services Department to ensure the highest possible standards.
Dalet systems are used around the world by many thousands of individual users at hundreds of TV and Radio content producers, including public broadcasters (ABS-CBN, BBC, CBC, DR, France TV, RAI, RFI, Russia Today, RT Malaysia, VOA, WDR), commercial networks and operators (Canal+, FOX, eTV, Mediaset, NBC Universal, Time Warner Cable, Warner Bros., SiriusXM) and government organizations (UK Parliament, NATO, United Nations, Veterans Affairs, NASA).
Dalet is traded on the NYSE-EURONEXT stock exchange (Eurolist C): ISIN: FR0011026749, Bloomberg DLT:FP, Reuters: DALE.PA. For more information on Dalet, visit www.dalet.com
Contacts
Actus Finance & Communication : Investors: Guillaume Le Floch 01 53 67 36 70
Press-Media : Vivien Ferran 01 53 67 36 34
APPENDIX: DETAILED FINANCIAL INFORMATION H1 2016
| INCOME STATEMENT BY FUNCTION | 30-june 2015 | 30 june 2016 |
| (in € thousands) | 6 months | 6 months |
| Revenues | 21 858 | 20 896 |
| Cost of revenues | -11 339 | -9 836 |
| Gross Profit | 10 519 | 11 059 |
| Research and development | -5 911 | -6 084 |
| Selling and marketing | -4 913 | -4 531 |
| General and administrative | -2 404 | -2 312 |
| Current operating income | -2 709 | -1 869 |
| Other income and expenses from operations | - | - |
| Operating income | -2 709 | -1 869 |
| Net financial income (expense) | -335 | -146 |
| Pre-tax income | -3 044 | -2 015 |
| Income tax | -247 | -90 |
| Net consolidated income | -3 291 | -2 105 |
| Net income, Group share | - 3 291 | -2 105 |
| INCOME STATEMENT BY NATURE OF EXPENSE | 30-june 2015 | 30 june 2016 |
| (in € thousands) | 6 months | 6 months |
| Revenues | 21 858 | 20 896 |
| Cost of goods and third-party services resold | -4 511 | -2 659 |
| Commercial gross profit | 17 347 | 18 236 |
| Other external expenses | -6 246 | -5 939 |
| Employee expenses | -11 446 | -12 144 |
| Taxes and duties | -182 | -90 |
| Other income and expenses from operations | -177 | -29 |
| EBITDA | -704 | 36 |
| Amortization expense and provisions net of reversals | -2 005 | -1 905 |
| Current operating income | -2 709 | -1 869 |
| Net financial income (expense) | -335 | -146 |
| Pre-tax income | -3 044 | -2 015 |
| Net consolidated income | -247 | -90 |
| Net consolidated income | -3 291 | -2 105 |
| Net income, Group share | - 3 291 | -2 105 |
| BALANCE SHEET | 31 dec 2015 | 30 june 2016 |
| (in euro thousand) | ||
| Goodwill | 6 213 | 5 735 |
| Intangible assets | 5 959 | 5 595 |
| Property, plant and equipment | 1 367 | 1 360 |
| Long-term financial assets | 358 | 342 |
| Long-term restricted cash | 325 | 325 |
| Other non-current assets | 1 008 | 1 293 |
| Deferred tax assets | 415 | 407 |
| NON-CURRENT ASSETS | 15 644 | 15 057 |
| Inventories | 247 | 719 |
| Trade receivables | 14 483 | 15 040 |
| Sundry debtors | 1 427 | 1 398 |
| Cash and cash equivalents | 4 335 | 3 957 |
| Current tax assets | 166 | 43 |
| CURRENT ASSETS | 20 658 | 21 157 |
| TOTAL ASSETS | 36 302 | 36 213 |
| Capital | 7 187 | 7 187 |
| Premiums | 9 614 | 9 682 |
| Consolidated reserves | -3 334 | -4 473 |
| Consolidated income, Group share | -800 | - 2 106 |
| Translation reserves | 2 528 | 1 954 |
| Shareholder's equity (attributable to the Group) | 15 194 | 12 245 |
| Non-controlling interests | 8 | 9 |
| SHAREHOLDER'S EQUITY | 15 202 | 12 253 |
| Long-term financial debt | 3 724 | 3 393 |
| Long-term provisions | 554 | 692 |
| Deferred tax liabilities | 880 | 675 |
| Other non-current liabilities | 744 | 712 |
| NON-CURRENT LIABILITIES | 5 901 | 5 472 |
| Short-term financial debt | 1 292 | 1 333 |
| Current tax liabilities | 81 | 164 |
| Suppliers | 3 349 | 3 549 |
| Tax and social security liabilities | 4 063 | 4 384 |
| Other creditors | 6 413 | 9 058 |
| CURRENT LIABILITIES | 15 198 | 18 488 |
| TOTAL LIABILITIES | 36 302 | 36 213 |
| STATEMENT OF NET CASH FLOWS | 30 june 2015 | 30 june 2016 |
| (in € thousand) | 6 months | 6 months |
| Consolidated net income (including non-controlling interests) | -3 291 | - 2 105 |
| +/- Depreciation, amortisation and provisions (except on current assets) | 2 045 | 1 929 |
| +/- Impairment losses – Long term assets | 411 | |
| +/- Income and expense linked to stock options and similar | 27 | 64 |
| -/+ Other income and expense | -37 | |
| -/+ Gains and losses on disposals | -1 | 1 |
| Cash flow after cost of net financial debt and tax | - 1 257 | -112 |
| + Cost of net financial debt | 78 | 82 |
| +/- Tax expense (including deferred taxes) | 247 | 90 |
| Cash flow before cost of net financial debt and tax (A) | -932 | 60 |
| - Tax paid (B) | -296 | -189 |
| +/- Change in working capital requirement from operating activities (including liabilities for employee benefits) (C) | 2 288 | 1 861 |
| = NET CASH FLOW FROM OPERATING ACTIVITIES (D) = (A + B + C) | 1 060 | 1 732 |
| - Cash outflow for acquisitions of property, plant and equipment and intangible assets | -1 714 | -1 733 |
| + Cash from disposals of property, plant and equipment and intangible assets | 7 | 1 |
| +/- Impact of changes of scope | -257 | |
| +/- Change in loans and advances made | 11 | 51 |
| = NET CASH FLOW FROM INVESTMENT ACTIVITIES (E) | -1 953 | -1 682 |
| -/+ Repurchase and resale of treasury shares | -56 | 2 |
| + Cash from new borrowings | 980 | 300 |
| - Loan repayments (including finance leases) | -448 | -480 |
| - Net financial interest paid (including finance leases) | -79 | -72 |
| +/- Other cash flows from financing activities | -11 | -140 |
| = NET CASH FLOW FROM FINANCING ACTIVITIES (F) | 386 | -390 |
| +/- Impact of changes in exchanges rates (G) | 593 | -60 |
| = CHANGE IN NET CASH POSITION (D + E + F + G) | 86 | -399 |
| Cash at end of period | ||
| Cash and cash equivalents – Bank overdrafts | 4 615 | 3 917 |
| Cash at opening | ||
| Cash and cash equivalents – Bank overdrafts | 4 529 | 4 317 |
