REG - Seeing Machines Ltd - Five year License Renewal with Caterpillar

Seeing MachinesAnnouncement

26/06/2024 07:00

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RNS Number : 9295T  Seeing Machines Limited  26 June 2024

 

Seeing Machines Limited ("Seeing Machines" or the "Company")

 

 

26 June 2024

 

Seeing Machines secures US$16.5 million payment as part of five year License
Renewal with mining giant Caterpillar

 

Revised Agreement also opens up significant untapped market for Seeing
Machines' Guardian Generation 3 solution

 

FY2024 Pre-Close Trading Outlook Update

 

Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the
advanced computer vision technology company that designs AI-powered operator
monitoring systems to improve transport safety, announces that it has signed a
new Master License and Marketing Agreement with global mining company
Caterpillar Inc ("Caterpillar") covering the next five years (the "Revised
Agreement"), as the existing agreement was set to expire in August 2024.

 

Key elements of the Revised Agreement:

 

·     Up-front license fee payment of $16.5 million related to Guardian
technology

·     Certain fields of use released for Seeing Machines to leverage

·     Further co-development of driver safety technology to be undertaken

 

As part of the Revised Agreement, Caterpillar will make an up-front license
payment for technology related to Guardian operator monitoring products,
delivering a one-off cash payment of US$16.5 million to Seeing Machines.

 

The Revised Agreement also enhances marketing cooperation between the
companies to better serve their respective customer bases and improve
coordination in the pursuit of under-served opportunities. The changes open
up access for Seeing Machines to sell its Guardian solution for on-highway
vehicles directly and through its distribution network to select customers in
many market segments of the General Construction and other core industries.

 

The Revised Agreement also makes provision for further co-development of
driver safety technology, based on Seeing Machines' Intellectual Property to
deliver smarter, more sophisticated, and competitive products to the heavy
equipment sector. This co-development will proceed through specific
development projects to be defined and priced individually. Caterpillar will
continue to purchase and distribute Guardian Generation 2 directly or through
their independent worldwide dealer network.

 

Paul McGlone, CEO at Seeing Machines, commented: "When we signed our initial
strategic agreement with Caterpillar in 2015 to work exclusively to deliver
our package of monitoring technology to their customers in certain core
industry sectors related to mining, it was a transformational agreement for
the industry. As we enter this next phase of our strategic collaboration with
Caterpillar, we are delighted to be signing this revised agreement, setting
the agenda for the next 5 years.  The US$16.5 million payment will bolster
our cash reserves and help deliver on our business plan as we move closer to
achieving a cash flow break-even run rate in FY2025.

 

"Our incredible team continues to work tirelessly to ensure that Seeing
Machines remains at the cutting edge of aftermarket Driver Monitoring System
(DMS) solutions with our Guardian technology. Following the launch of the
Guardian Generation 3 product earlier this year, and the renewal and expansion
of our exclusive arrangement with Caterpillar, I believe we are well placed to
take advantage of the regulation driven demand for our technology across
customers in these vertical industries."

 

Seeing Machines continues to protect commercial transport and logistics
companies with its aftermarket Guardian solution globally, with over 16
billion kilometres of recorded travel across more than 59,000 vehicles. The
third generation Guardian hardware, launched this year and now being delivered
to bus and truck manufacturers to meet the European General Safety Regulation,
also delivers a range of features that leverage the Company's proven
automotive-grade algorithms and precision optics to deliver premium
performance in the most demanding real-world driving conditions.

 

Pre-close trading outlook

 

As the end of the current Financial Year approaches, the Board of Seeing
Machines anticipates that the Company will close the FY2024 period at or ahead
of market expectations for Revenue and Cash. Subject to final revenue
recognition associated with the Revised Agreement with Caterpillar and the
final outcome on Automotive royalties for Q4 2024 it is expected that Cash
EBITDA will be lower than market expectations. This has been largely driven by
Aftermarket margin mix due to the slower than expected transition from
Guardian Generation 2 to Generation 3 and the previously reported adverse
Automotive royalty volumes and mix during the year. Automotive royalty volumes
have improved during Q3 2024, delivering 74% growth in unit volume for the
year to date.

 

Despite Cash EBITDA being lower in FY2024, the Board confirms that the
business is funded to deliver on the Seeing Machines business plan and
reiterates its expectation to achieve a cash flow break-even run rate in
FY2025.

 

The Company will provide a detailed Trading Update in early August, as usual.
 

 

This announcement contains inside information under the UK Market Abuse
Regulation. The person responsible for arranging for the release of this
announcement on behalf of the Company is Paul McGlone, CEO.

 

Enquiries:

 

 Seeing Machines Limited                             +61 2 6103 4700
 Paul McGlone - CEO

 Sophie Nicoll - Corporate Communications

 Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)                        +44 20 7710 7600
 Alex Price

 Fred Walsh

 Ben Good

 Dentons Global Advisors (Media Enquiries)           +44 20 7664 5095

 James Styles

 Jonathon Brill

Methuselah Tanyanyiwa

 seeingmachines@dentonsglobaladvisors.com
 (mailto:seeingmachines@dentonsglobaladvisors.com)

 

About Seeing Machines (AIM: SEE), a global company founded in 2000 and
headquartered in Australia, is an industry leader in vision-based monitoring
technology that enable machines to see, understand and assist people. Seeing
Machines is revolutionizing global transport safety. Its technology portfolio
of AI algorithms, embedded processing and optics, power products that need to
deliver reliable real-time understanding of vehicle operators. The technology
spans the critical measurement of where a driver is looking, through to
classification of their cognitive state as it applies to accident risk.
Reliable "driver state" measurement is the end-goal of Driver Monitoring
Systems (DMS) technology. Seeing Machines develops DMS technology to drive
safety for Automotive, Commercial Fleet, Off-road and Aviation. The company
has offices in Australia, USA, Europe and Asia, and supplies technology
solutions and services to industry leaders in each market vertical.

 

www.seeingmachines.com (http://www.seeingmachines.com)

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