The Ottawa-based digital surveillance company reported revenues of $20 million for the quarter ended Jan. 31, down 15.2 per cent from the same period a year earlier, contributing to its net loss widening from $3.52 million or 20 cents per share, from $1.26 million or seven cents per share.
“Due to weak sales visibility attributable to the impact of the economic downturn in markets such as the U.S. and Dubai, as well as the strength of the Canadian dollar, the company has not met its expectations to increase revenue and profitability in the first nine months of fiscal 2010," said March Networks’s chief financial officer Ken Taylor in a statement. "The company anticipates modest revenue growth in the fourth quarter as compared to the third quarter of fiscal 2010 and that fiscal 2010 revenue and profitability will be lower than fiscal 2009."
After adjusting for one-time items, the firm saw a non-GAAP operating loss of $3.2 million, compared to a slim $600,000 profit a year earlier.
“In spite of the economic challenges and deferred capital spending within many of our vertical markets, the company has experienced year-to-date revenue growth in the commercial industrial market,” noted March Networks CEO Peter Strom. “We continue to invest in R&D and technologies that address the evolving needs of customers in our key vertical markets in order to support revenue growth.”
The company also pointed out that its cash and short-term investment position grew to $50.2 million at the end of the third quarter, from $46.6 million in the year-earlier period, which it attributed to “strong working capital management, particularly with respect to reducing inventory levels.”
Retail ramp-up
In a separate announcement, the company said its managed video network services offering has been chosen by a large unnamed retail customer based in the United States to remotely monitor the retailer’s 27,000 Internet-protocol surveillance cameras, which March Networks also provided.
“We are pleased to offer this service to our substantial customer base worldwide and expect further growth in this segment of our business as outsourcing is increasingly recognized as a highly effective way to manage security infrastructure,” said Mr. Strom in a statement.
The annual contract, which is valued at approximately $1 million, will see March Networks taking over and centralizing the ongoing health monitoring and maintenance of the customer’s surveillance network at its network operations centre.
The service offering includes software maintenance and scheduled updates, and March Networks will remotely keep track of the customer’s equipment to make sure the system is running at optimal performance.
