Seeing Machines & Caterpillar sign USD $16.5 million technology deal

Seeing Machines has announced the signing of a new Master License and Marketing Agreement with Caterpillar. This agreement, effective for the next five years, ensures Caterpillar remains a key partner in leveraging Seeing Machines' operator monitoring technology to enhance transport safety in the mining sector and beyond.

The Revised Agreement stipulates an up-front license fee payment of USD $16.5 million from Caterpillar to Seeing Machines for technology related to the Guardian monitoring products. This substantial payment will provide a significant boost to Seeing Machines' cash reserves.

Additional provisions of the agreement include the release of certain fields for Seeing Machines to explore, thereby enabling the company to broaden the application of its Guardian solution. Notably, Seeing Machines will now be able to sell its Guardian technology for on-highway vehicles through its distribution network, targeting customers in multiple segments of General Construction and other core industries.

The Revised Agreement also outlines plans for further co-development of driver safety technology. This development will be based on Seeing Machines' proprietary Intellectual Property, aimed at producing more advanced and competitive products for the heavy equipment sector. Each development project will be defined and priced separately, continuing the collaboration between the two companies. Caterpillar will maintain the purchase and distribution of the Guardian Generation 2 solution either directly or through its worldwide dealer network.

Commenting on the deal, Paul McGlone, CEO at Seeing Machines, stated, "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 five years. The USD $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."

McGlone emphasised the commitment of Seeing Machines to remain at the forefront of aftermarket Driver Monitoring System (DMS) solutions through continuous innovation. "Our incredible team continues to work tirelessly to ensure that Seeing Machines remains at the cutting edge of aftermarket 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," he added.

Seeing Machines' Guardian solution, designed to enhance the safety of commercial transport and logistics companies, has been implemented globally, covering over 16 billion kilometres of travel across more than 59,000 vehicles. The latest Guardian Generation 3 hardware, launched earlier this year, aims to meet the European General Safety Regulation by incorporating advanced automotive-grade algorithms and precision optics to perform efficiently in real-world driving conditions.

Amidst the new agreement, Seeing Machines has provided an update on its FY2024 pre-close trading outlook. The Board anticipates that the company's revenue and cash flow for FY2024 will meet or surpass market expectations. However, due to factors like the slower transition from Guardian Generation 2 to Generation 3 and lower-than-expected Automotive royalty volumes earlier in the year, Cash EBITDA is expected to be less than market forecasts. Despite this, the Board assures that Seeing Machines is adequately funded to meet its business objectives and remains on track to achieve a cash flow break-even run rate in FY2025.

A detailed trading update is scheduled for release in early August.