Final 2015 results

Los Angeles, California: DDD Group plc, the advanced imaging and 3D solutions company, announces its final financial results for the year ended 31 December 2015.

The Group expects to post to shareholders its Annual Report and Accounts for the financial year ending 31 December 2015 on Tuesday 24 May 2016.

Operational Highlights:

  • Launched TriDef® SmartCam, a background replacement solution for the video conferencing and video gaming markets, in June 2015
  • 184,000 copies of TriDef Smartcam were shipped in the second half of 2015 (2014:0 total)
  • Signed two agreements with SplitmediaLabs, makers of XSplit Gamecaster and XSplit Broadcaster products for affiliate marketing and OEM bundling of TriDef SmartCam
  • 4m units of DDD TriDef 2D to 3D conversion solutions shipped primarily by TV licensees in period (2014: 13m total TV, PC, and mobile); cumulative total TriDef unit shipments of 55m at 31 December 2015
  • Extended the 3D TV license agreement with Samsung Electronics until December 2016
  • Commenced a patent litigation with Quinn, Emanuel, Urquhart, & Sullivan LLP as lead counsel against LG Electronics in Los Angeles, California related to the automatic 2D to 3D conversion technology featured in LG’s range of 3D TVs
  • Secured additional patents for 2D technologies that strengthen the patent protection underlying the new products

Financial Highlights:

  • Revenues of $706,000 (2014: $2,533,000)
  • Gross profit margin remains strong at 98.7% (2014: 99.8%)
  • Adjusted EBITDA* loss from continuing operations of $1,826,000 (2014: loss of $285,000)
  • Loss from continuing operations of $3,178,000 (2014: loss of $2,209,000)
  • Loss per share from continuing operations $0.019 (2014: $0.015)
  • Cash at 31 December 2015 $164,000 (December 2014: $697,000)
  • The Group raised capital through the issue of
    • approximately $1,256,000 (net of expenses) through two equity placings during the year and
    • approximately $534,000 (£350,000) of long-term debt through the Convertible Unsecured Loan Note program

*Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortisation adjusted for the non-cash share based payment expense required under IFRS

Subsequent to Period End

  • The Group raised $1,550,000 through the issuance of two Secured Loan Notes
  • Signed AVerMedia as an affiliate marketing partner for TriDef SmartCam to support their RE Central gamecasting software
  • Launched UPix, an interactive social photography app for Android phones via the Google Play store
  • Launched TriDef SmartCam for Mac OS X available at www.tridef.com
  • The Board has determined that the cost of continuing the AIM admission outweighs the benefits and is recommending a special resolution to cancel the AIM admission which will be voted on by shareholders at the 29 June 2016 AGM. If the resolution is approved by 75% of the voting shareholders, the cancellation would be effective on 7 July 2016.

Chris Yewdall, Chief Executive said:

“During the year, the Company commenced the transition from its legacy 3D business into our new offering of the 2D TriDef SmartCam solutions that target scalable opportunities in the gamecasting and video conferencing markets. We have been encouraged by the positive response from end users and prospective partners to the new TriDef SmartCam products where distribution is now in excess of 30,000 units per month. We have recently expanded the TriDef SmartCam range with a version that is compatible with Apple’s Mac OS X platform which is popular within the business video conferencing user base.

Leveraging the core image analysis technology that the Company has pioneered, we have also launched UPix, an innovative new social photography app, that simplifies the process of taking ‘selfie’ photographs and also makes them interactive, allowing friends to add themselves to the ‘selfie’ photo and share it on.

Additionally, the Company appointed Quinn Emanuel Urquhart and Sullivan LLP, a leading US intellectual property law firm, to pursue patent infringement litigation in the US against LG Electronics related to LG’s range of 3D televisions. The case is currently progressing as expected.

Revenues from the 3D TV market were lower due to the transition of the use of Company’s TriDef 3D conversion technology from HDTVs to UHD/4K TVs which occurred at the end of the first quarter. 3D TV revenues recovered towards the year end in line with the continued growth in sales of UHD TVs. The Company also extended its license agreement with Samsung until the end of 2016.

During the transition from stereo 3D products to 2D solutions the Company continues to carefully manage costs and expenses to maximize the working capital as the Company returns to break-even. Despite the careful cost control, the Company has seen a decline in its turnover in the last two years, making it much harder to generate profits at the present time. This has caused a substantial price decrease and reduction in the liquidity of the stock making it difficult for the Company to raise sufficient capital to fully fund its growth plans for products and applications beyond the 3D market.

The AIM listing expense has become excessive for the size of the business and more importantly does not help to generate any additional revenue or profit. The Board’s view is that the Company is not receiving the benefits for which the AIM listing was originally sought, nor is there any possible chance of the situation changing in the foreseeable future. Accordingly the Board has concluded that in their opinion, it is in the best interests of the Company and its shareholders to seek a cancellation of trading from the AIM market. This will cut significant expense and enhance the possibility of potential dividends in the future.”

View 2015 Annual Results Excerpt