SENSIO Technologies Inc. (“SENSIO”/”the Corporation”) /quotes/zigman/419970 CA:SIO -9.89% today presented its financial results for the fiscal year ended May 31, 2011. During this fiscal year, SENSIO realized its highest ever revenues, continuing the trend begun in the previous year. This growth is mainly due to the market of Live 3D in cinemas, which represents 81.1% of sales and which benefitted from the impetus provided by the 2010 FIFA World Cup(TM). Agreements with a number of major chip manufacturers in the consumer electronics market and the first patent licences for the SENSIO(R) S2D Switch were also marks of significant progress in realizing the Corporation’s business plan. Finally, the acquisition of Algolith’s intellectual property portfolio enabled us to better adapt our offering for the professional market, and to add several key employees to the engineering and sales teams.

“SENSIO has come a long way over the past two years, as much in terms of its IP and technology portfolio as in terms of its commercial development in our three major markets,” said Nicholas Routhier, SENSIO’s President and CEO. “We are however faced with a certain pessimism in the markets due to the belief that 3D is just a fad. Every nascent industry has to deal with scepticism of this sort; however it is important to look at the reaction of the industry. Cinema operators, manufacturers and film studios are all continuing to invest massively in bringing more sophisticated, better-adapted 3D products to market for consumers. We’re convinced that the sales of 3DTVs will accelerate over the next few years, just like Blu-ray players and HDTVs have, especially with the introduction of passive technology and the increasing availability of quality content. SENSIO has also continued to invest to position itself in this emerging market and to build its technology and content offerings so as to profit from the resurgence of 3D that we foresee in 2012. We are very positive about the future of 3D, about the success of our business plan and about our perspectives for growth for the years to come.”

Highlights of fiscal year 2010-2011

— 80.8% increase in SENSIO’s revenue for fiscal year 2010-2011 compared to
2009-2010;
— Acquisition of Algolith’s intellectual property and know-how,
reinforcing SENSIO’s 3D image- processing offering;
— Addition of SENSIO(R) Autodetect to the range of solutions already
offered by SENSIO;
— Transmission of high-profile live-3D events (FIFA, NBA All-Star
Weekend);
— Expansion of cinema network equipped for live 3D : 842 screens on five
continents;
— Chip strategy progressing well : five manufacturers signed : MediaTek,
Broadcom, Trident Microsystems, Zoran for consumer electronics, joining
Sigma Design signed at the end of 2009-2010; GEO Semiconductor for
professional equipment market;
— Presentation of the video-on-demand (VOD) 3D content library during the
fiscal year.

Live 3D – sustained growth

During the fiscal year, SENSIO added 124 screens (up 17.3%) to the network of cinemas equipped with SENSIO(R) Hi-Fi 3D technology, bringing the SENSIO(R) 3D Live Network to 842 screens over five continents. At the beginning of the financial year, the 2010 FIFA World Cup(TM) was the impetus for the increase in revenues in the Live 3D market, and for the expansion of the network which had already begun shortly before the beginning of the fiscal year, in anticipation. Also, SENSIO began to explore the direct promotion of live-3D content to its network, following an agreement with the NBA (for the NBA All-Star Weekend and three regular season games), which enabled the development of a new line of business, which should be in operation as of fiscal year 2011-2012.

“SENSIO’s offer is unique in the marketplace,” stated Richard LaBerge, Executive Vice-President and CMO. “Offering the best 3D distribution format is only one element of a complete solution for cinema operators. Thanks to the partnerships we’ve established around the world, cinemas wishing to present events in SENSIO(R) Hi-Fi 3D can rely on turnkey solutions comprising signal transmission, the installation of high-performance equipment, local technical support and access to the biggest live-3D events in the world. With the experience we have gained over the last few years and a critical mass of SENSIO(R) Hi-Fi 3D-certified screens, we are confident that we will continue to grow in this market over the coming year.”

Consumer electronics – continuing our positioning

In order to reduce the length of the sales cycle with consumer electronics manufacturers, SENSIO has successfully pursued its strategy of integrating SENSIO(R) Hi-Fi 3D technology into chips destined for this market. Consequently, SENSIO has signed new agreements with five of the biggest manufacturers of semiconductors for consumer electronics, including MediaTek, Broadcom, Trident Microsystems and Zoran. Some of these integrations enabled discussions with new prospective clients in accordance with the strategy developed. With the introduction of SENSIO(R) Autodetect and the acquisition of the technologies developed by Algolith, SENSIO is now in possession of a larger and more complete portfolio of products to be offered to semiconductor manufacturers beginning the first quarter of the next fiscal year, on a per-unit royalty basis.

At the same time, with the aim of enhancing the value of its SENSIO(R) Hi-Fi 3D format and increasing demand for it, the Corporation announced its 3D-content-aggregation strategy at CES 2011. During the financial year, SENSIO continued negotiating with independent producers and major studios for the rights to make films and documentaries in SENSIO(R) Hi-Fi 3D format available over VOD platforms. The Corporation was therefore able to announce an agreement with RoxioNow for the VOD distribution of its library of titles. These efforts should lead to the official launch of the content library this fall, which will be accessible to consumers benefitting from equipment incorporating SENSIO(R) Hi-Fi 3D. Finally, SENSIO signed its two first patent licences for the SENSIO(R) S2D Switch, which began to generate revenues during the fiscal year.

“The introduction of new products and of two new lines of business (semiconductors and VOD) is an important part of our growth strategy for the coming year in the consumer electronics sector,” explained Nicholas Routhier. “Vizio’s decision to bank on passive 3DTV delayed the deployment in the American market of televisions incorporating SENSIO(R) Hi-Fi 3D, which in turn delayed the execution of our game plan and directly impacted our short-term revenues. However, we are convinced that this direction will pay off in the medium term and that passive 3DTVs will be very successful with consumers. The success that Vizio is expected to have in the fall of 2011 will enable us to roll out our VOD strategy, to sign new manufacturers and to generate greater revenues, which bodes well for the next financial year.”

Professional broadcasting equipment – a complete offer thanks to Algolith

At the beginning of December 2010, SENSIO acquired Algolith’s intellectual property, including its portfolio of patents and the key personnel mastering its technologies. At the end of the fiscal year, the team had been integrated and the products aligned, enabling SENSIO to announce a complete stereoscopic 3D solution for professional equipment at the NAB tradeshow.

“The acquisition of Algolith’s technologies enabled us to round out our product portfolio and transform what had been essentially the promotion of the SENSIO(R) Hi-Fi 3D format into a revenue-generating line of business. We have already started to register first sales resulting from this acquisition and are confident that the results will increase over the next quarters,” said Mr. Routhier.

Summary of financial results

Significant increase in revenues and gross profit

SENSIO’s revenues for the fiscal year ended May 31, 2011 were $1,253,267 compared to $693,368 in 2010, an increase of $559,899 or 80.8%. The revenues generated during the fiscal year came principally from the sale of licences for equipment expanding the SENSIO(R) 3D Live Network.

For the fiscal year ending May 31, 2011, SENSIO’s gross profit margin was $1,225,538 (97.8% of sales) compared to $535,967 (77.3% of sales) for 2009-2010.

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