Haivision's Renewed NCIB: A Strategic Move for Shareholder Value

Haivision Systems Inc. (TSX: HAI), a leading global provider of mission-critical, real-time video networking and visual collaboration solutions, has announced the renewal of its normal course issuer bid (NCIB). This strategic move allows the company to purchase and cancel up to 1,924,404 of its common shares, representing 10% of its public float, at the market price at the time of purchase. The renewed NCIB, which follows the conclusion of Haivision's previous NCIB that expired on January 21, 2025, is a testament to the company's commitment to enhancing shareholder value and optimizing its capital structure.

Under the renewed NCIB, Haivision may purchase shares through the facilities of the Toronto Stock Exchange (TSX) and/or eligible alternative Canadian trading systems. The company has also entered into an automatic share purchase plan (ASPP) with its designated broker to allow for the purchase of shares under the NCIB when Haivision normally would not be active in the market due to internal trading black-out periods. The ASPP has been pre-cleared by the TSX and will terminate on the earliest of the date on which the NCIB expires, the maximum number of shares have been purchased under the NCIB, or the Company terminates the ASPP in accordance with its terms.

Haivision's management believes that, from time to time, the market price of the company's common shares may not fully reflect the underlying value of the shares. By purchasing shares under the NCIB, Haivision aims to address this discrepancy and align the market price with the intrinsic value of the shares. This strategic move is in the best interest of Haivision and its shareholders, as it allows the company to enhance shareholder value by increasing earnings per share (EPS) and potentially driving up the share price.

In the previous NCIB that ended on January 21, 2025, Haivision purchased 843,000 shares through the facilities of the TSX at a weighted average price of $4.37 per share. This share repurchase reduced the number of outstanding shares, which can increase EPS for remaining shareholders. For example, if Haivision's earnings remain constant, a 10% reduction in shares outstanding would result in an approximately 11% increase in EPS. This can make the company's shares more attractive to investors, as they would be receiving a larger portion of the company's earnings.



Share repurchases can also put upward pressure on the share price. When a company buys back its shares, it reduces the supply of shares available in the market, which can drive up the price due to increased demand. This is because investors are willing to pay more for a smaller number of shares. If Haivision's share price increases due to the NCIB, it could also increase the company's valuation multiples, such as the price-to-earnings (P/E) ratio. A higher P/E ratio can make the company more attractive to investors, as it suggests that the market expects higher future growth or earnings from the company.

The renewal of the NCIB can also be seen as a vote of confidence from management in the company's future prospects. By purchasing shares, management is essentially betting that the current share price does not fully reflect the company's intrinsic value. This can make the company more attractive to external investors, as it signals that the company's management believes the shares are undervalued.

In conclusion, Haivision's renewed NCIB is a strategic move that aligns with the company's long-term growth strategy. By purchasing and canceling shares, Haivision aims to enhance shareholder value by increasing EPS, potentially driving up the share price, and signaling confidence in the company's future prospects. This strategic move is in the best interest of Haivision and its shareholders, as it allows the company to optimize its capital structure and create value for its investors.