Axis Communications Announces First Quarter Financial Results

April 21, 2006
Sales up 47 percent over same quarter last year

CHELMSFORD, Mass. – Axis Communications, the global leader in the network video market, has reported financial results for the first quarter ending March 31, 2006.  The company’s net sales rose 47 percent over the same quarter last year, and Axis reported earnings per share (EPS) of $0.05. 

“The first quarter showed that the strong sales trend for network video products continues,” said Ray Mauritsson, CEO of Axis Communications. “Growth for the group as a whole amounted to 47 percent for the first quarter and to 69 percent for video products.  Of particular interest was that the retail segment gained pace.  Axis received orders for two major installations in U.S. retail chains.  In addition, we also noted an increase in demand in the transport sector.”

Axis is listed on the O List of the Stockholm Stock Exchange, among the Attract 40 companies.  Highlights for the first quarter include:

  • Net sales of $33 million, an increase of 47 percent compared with the corresponding period in the preceding year.  The strong trend for the Video product area continued.  Video sales amounted to $28 million during the first quarter, corresponding to sales growth of 69 percent, compared with the year-earlier period.
  • Video products now account for 85 percent of Axis’ total sales.  Growth within the Print product area accounted for 11 percent of total sales.
  • The Americas region reported strong sales, with $13.8 million in sales, 42 percent of Axis overall business.
  • Operating profit increased to $5 million, corresponding to an operating margin of 14.8 percent for the first quarter.
  • The gross margin remained stable, amounting to 53.8 percent.
  • Profit before tax rose to $5 million, while profit after tax was $3.5 million.

Axis continued its efforts to drive the shift from analog to network video solutions.  During the period, Axis started research partnerships with Securitas Systems, ASSA Abloy and Lund University for work that is expected to result in increased knowledge and insight in the area of security.

The rapid pace of Axis product launches continued.  Products launched during the period included the AXIS 207W and AXIS 214PTZ network cameras, as well as various accessories.  The AXIS 207W is a cost-effective camera for indoor use with wireless transfer.  The AXIS 214PTZ is equipped with zoom functionality, support for audio processing, and an automatic night-and-day function that can adjust the image according to light levels.

Retail stores emerged as the fastest growing segment for security installations.  During the period, Axis announced two major installations within the retail customer segment.  A national U.S. retail chain installed Axis network cameras for monitoring approximately 200 of the chain’s more than 1,000 stores.  The contract included more than 1,000 network cameras, with orders for an additional 9,000 units expected over the coming years. Another U.S. retail chain has installed network video products for surveillance of all of the chain’s 210 hypermarkets.

The transport sector is another important customer segment in which Axis products were successful.  Logan Airport in Boston, Mass., installed Axis video servers for the surveillance of secure areas.  The video servers are part of an integrated security system that monitors security, baggage, ticket sales and gate areas in one of the airport’s terminals.

Growth of the AXIS ADP (Application Development Platform) continued at the same intensive pace as previously, with the 300th application partner registered during the first quarter.  ADP partners work with Axis to offer total solutions that are matched to customer requirements.  

Axis’ wholly owned North American subsidiary, Axis Communications Inc., was sued for patent infringement in a U.S. federal court during the first quarter.  The suit was filed by Elbex Video Ltd., which has filed several patent suits against other companies in the U.S. regarding the same patents.

During the first three months of the year, Axis participated in several international trade shows around the world focused on the security market.  Axis products and systems generated considerable interest at such shows as IIPsec in the UK, InterSec in Dubai, Security & Safety Technologies in Moscow, Security Show in Japan, Secutech Expo in Taiwan, SICUREZZA in Italy, and SICUR in Spain.  At several exhibitions, Axis participated with partners to present total network video solutions.

Axis’ overall objective for 2006 is to retain, further strengthen, and enhance the company’s position as the market-leading supplier of network video solutions.  Going forward into 2006, Axis foresees a video market that will continue to develop at a rapid pace.  To retain market shares and its leading position, as well as to meet increasing competition in the market, Axis will continue to pursue its focused strategy during the year.  This strategy entails launching intelligent and innovative network video products, enhancing partnerships, expansion and recruitment.