Option reports First Half Year 2015 results

Leuven, Belgium – August 27, 2015 – Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY), the company connecting Things to the Cloud, today announced its results for the first half fiscal year ended June 30 2015. The financial information reported in this release is presented in Euros and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. The accounting policies and methods of computation followed in the attached financial statements are the same as those followed in the most recent annual financial statements.

 

FINANCIAL HIGHLIGHTS OF THE FIRST HALF FISCAL YEAR 2015

  • Total revenues for the first half year of 2015 were EUR 2,6 million compared with EUR 2,8 million realized in the first half of 2014. M2M related revenues increased from EUR 0,3 million to EUR 1,3 million.
  • Gross margin for the first half year of 2015 was 42,1 % on total revenues compared with a gross margin of 35,2 % for the comparable period in 2014.
  • Thanks to the continuous cost reductions, the operating expenditure decreased with 0,8 Million EUR.
  • Financial costs increased, mainly as a result of interests due on the convertible bonds which were issued at the beginning of the second quarter of 2014 and also because of exchange rate losses.
  • The first half year of 2015 EBIT amounted to EUR -5,0 million compared to EUR -5,9 million during the corresponding period 2014. The net result amounted to EUR -6,0 million compared to EUR -6,6 million as per June 30 2014.
  • The cash position decreased from EUR 1,6 million at the end of 2014 to EUR 0,9 million at the end of June 2015.
  • During the first half of 2015, the company received a bridge funding of 2,7 million EUR.
  • During the first half of 2015, 2.116.782 new shares we created as the result of the conversion of convertible bonds.

 

Frank Deschuytere, Option’s CEO, commented on the results:

 

“Despite the fact that the numbers of the first half of 2015 are below our own expectations there are bright spots. Our sales partners indicated that their orders are postponed till later this year. We have developed a next pillar in our business model, which is our ‘engineering development’ capacity. We have won several contracts to develop solutions for the Internet of Things world. Finally, we were also able to generate cash using previous products that were re-worked to neatly fit the customer’s needs.

 

With the developments I’m seeing within the Company and in the market I’m confident that we’ll see a significant improvement of our results in the second half of 2015.”


Business Update

In the first half year Option faced postponed sales and as a consequence important orders shifted to the second half of the year. However the Company’s sales partners maintained their outlook for 2015.

More importantly, in recent months progress has been made on several fronts: The main focus has been to increase the number of applications that run on the CloudGate platform. Several important application development projects for US Robotics for out of band management, smart housing applications for Asea Brown Boveri (ABB) have been finalized and a rail-certified WIFI access point for general deployment in trains, trams and busses has been developed.

To further lower the barriers to M2M application development for our customers and to decrease the time from concept to working M2M solution, Luvit-RED was developed. Luvit-RED is a visually configurable agent for the design and deployment of smart M2M solutions. By enabling rapid prototyping, development and deployment of M2M applications, Luvit-RED reduces cost, speeds time to market and mitigates risk.

Meanwhile, the number of partners developing applications autonomously on CloudGate is increasing with, amongst others, Skywave, GetWireless, Graphite and Proximus developing applications ranging from connected wireless sensors, surveillance & security solutions to general telematics solutions.

In the first half year we continued to increase our reach into the M2M markets by adding distributors such as TESSCO in the US, Graphite in UK and recently BLUDIS in Italy. Their job is to bring localized solutions and support to channel partners.

In the second half of the year the Company expects significant stock replenishment orders from its partners in North America. The Company expects to successfully continue to convert stock into cash by selling modules & personal routers.

We have continued working at extending Option’s business model beyond the selling of CloudGate equipment. The business model remains centered on Internet of Things and is based on the following pillars:

  1. Developing & selling solutions based on our CloudGate platform, including equipment sales;
  2. Engineering services & turnkey projects in the Internet of Things space.

For the second pillar, Option increased its sales efforts in the go-to-market of “solution development and engineering services” leading to multiple design wins for CloudGate application development and a design win in IoT for the Connected car.


Corporate
 
Following the continued review by the statutory auditor of the Company of the cash position of the Company and its continuity, the Option Board of Directors has further deliberated in this respect and informed the market accordingly in its press releases of April 21, 2015 and July 3, 2015.
 
In addition to the announced 2.7M EUR bridge financing provided by its existing bond- and other stakeholders in March of this year, the Company started up confidential discussions in order to engage with a number of financial and industrial partners. These discussions have been accelerated and are anticipated to be completed in the second half of 2015 to stabilize its current financial position to ensure its ability to successfully pursue and maximize its potential in the Internet of Things market.
 
On 26 May 2015 the Board co-opted Jurgen Ingels as director in replacement of Olivier Lefebvre as independent director. Jurgen Ingels (44) is founding and managing partner of Smartfin Capital, a European Private Equity fund investing in Smart Technology growth companies. Previously, he was the founder and CFO of Clear2Pay, a leading payments technology company.
 
On 29 May 2015 the Ordinary Shareholders’ meeting resolved to confirm and approve the appointment as non-executive director of the company of Dimitri Duffeleer BVBA, with registered office at Fazantenlaan 17, 8790 Waregem, having as permanent representative Mr. Dimitri Duffeleer, as was decided by the board of directors dated 24 September 2014 provisionally by way of co-optation. The appointment of Dimitri Duffeleer BVBA entered into force on 1 November 2014 and shall expire after the general meeting that will be invited to approve the annual accounts relating to financial year 2016.
 
On 29 May 2015 the Ordinary Shareholders’ meeting resolved to re-appoint FVDH Beheer BVBA, represented by Mr. Francis Vanderhoydonck, as non-executive director of the company. The appointment of FVDH Beheer BVBA shall expire after the general meeting that will be invited to approve the annual accounts relating to financial year 2017.
 
On 26 June 2015 the extraordinary Shareholder’s meeting of the Company decided to renew the authorized capital of the Company for a total amount of four million seven hundred thirty eight thousand nine hundred sixty four euro and fifty cent (EUR 4,738,964.50), both by means of contribution in cash or in kind, within the limits imposed by the Belgian Code of Companies as well as by conversion of reserves and issue premiums, with or without the issue of new shares, with or without voting right, or trough the issue of convertible bonds, subordinated or not, or through the issue of warrants or of bonds to which warrants or other movables are linked, or of other securities, such as shares in the framework of a Stock Option Plan. Furthermore the extraordinary Shareholder’s meeting of the Company decided to grant the board of directors special authority, in the event of a public take over bid for securities issued by the Company during a period of three (3) years, running from the extraordinary general shareholders’ meeting which will resolve on this authorization, to proceed with capital increases under the conditions foreseen by the Belgian Code of Companies.
 
In June 2015 the Company appointed Mr Jan Luyckx as senior director finance in replacement of Christine Pollie who left the Company. 

 

For the entire press release, including tables, click on the link below.

Option reports First Half Year 2015 results

 

For the entire interim report, click on the link below

Interim Financial Report June 30 2015