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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Vecima Networks Inc | TSX:VCM | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 19.80 | 19.65 | 20.00 | 0 | 01:00:00 |
Vecima Networks Inc. (TSX:VCM), an experienced designer and manufacturer of innovative technology in the broadband equipment market, today reported financial results for the three months ended September 30, 2012. All figures are in Canadian dollars and in accordance with International Financial Reporting Standards ("IFRS") unless otherwise stated.
FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------- (CAD dollars in millions except percentages, headcount, and per share data) Q1FY2013 Q4FY2012 Q1FY2012 --------------------------------------------------------------------------- Revenue 24.9 28.7 20.0 --------------------------------------------------------------------------- Gross Margin 40% 38% 37% --------------------------------------------------------------------------- EBITDA(1) 8.4 4.5 1.7 --------------------------------------------------------------------------- Adjusted EBITDA(1) (removes gains on sale of assets and stock-based compensation) 4.5 4.5 1.6 --------------------------------------------------------------------------- Net income or (loss) 5.3 1.7 (0.7) --------------------------------------------------------------------------- Earnings or (Loss) per share (based on weighted average number shares outstanding) $0.24 $0.07 ($0.03) --------------------------------------------------------------------------- Cash and marketable securities 25.7 19.5 7.8 --------------------------------------------------------------------------- Headcount 619 624 603 --------------------------------------------------------------------------- (1) EBITDA is not a recognized measure under IFRS and, accordingly, investors are cautioned that EBITDA should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of our financial performance or as a measure of our liquidity and cash flows. For a reconciliation of EBITDA and adjusted EBITDA, investors should refer to Management's Discussion and Analysis for the current quarter. ---------------------------------------------------------------------------
"Vecima is encouraged by the strong results in gross margin and cash flow generated through operations. These improvements were achieved despite the decrease in revenue from a strong fourth quarter in our last fiscal year," said Dr. Surinder Kumar, CEO of Vecima.
Vecima's Q1 revenue was $24.9 million, gross margin improved to 40%, EBITDA increased from $4.5 to $8.4 million and adjusted EBITDA was $4.5 million. Gross margin improved because of the increased efficiency and higher sales in new products.
As announced in July 2012, Vecima sold a parcel of non-serviced land in Saskatoon and received proceeds of approximately $4.0 million. The Company also sold a small number of radio spectrum licenses for $0.4 million in Q1.
MSO BUSINESS SERVICES Terrace Family -- Sales increased 7% to $8.7 million compared to $8.1 million in Q4 of FY12. Vecima continues to see consistent uptake of its TC1200, TC1000 and TC600 products by its MSO customers. -- Revenue from TC600 increased over the last three quarters indicating further adoption of this product by new and existing MSO customers. Terrace QAM -- Sales increased 30% from $4.1 million in Q4 of FY12 to $5.3 million this quarter. Vecima expects continued strong sales through the fiscal year. -- Terrace QAM is attractive to MSO customers because it enables new service revenue in the hospitality sector which includes Tier 1 hotels and resorts. CABLE HEADEND OEM QAM Modules -- As anticipated, sales dropped from $4.5 million to $1.1 million. Sales are expected to decline in fiscal 2013 as the product moves towards end of life. -- Next generation solutions in the cable headend will include technology for which Vecima and its partner, a leading integrated circuit manufacturer, have secured the design win. The solution is for a Tier 1 vendor's next generation broadband access platform. OEM Return Path Demodulator and CableVista -- Sales of these legacy products declined from Q4 FY12 to Q1 FY13. Sales for our OEM return path demodulator dropped from $2.9 million to $1.6 million; while CableVista sales declined from $2.0 million to $1.1 million. A flattening out and then gradual decline in the sales of these products, which are in the late stage of their product lifecycle, is expected over the next 1-2 years. -- As previously announced, Vecima has executed an agreement with a prominent digital video access equipment vendor for a custom designed platform that interfaces to a large, currently deployed base of subscriber devices. Vecima expects the product to start shipping in production volume in the last quarter of this fiscal year. FLEET MANAGEMENT -- During the period, we signed a supply agreement with our lead customer. -- We currently have over 400 active, paying subscribers on our FleetLynx service platform. We have shipped over 1100 subscriber modems. -- Potential customers are actively evaluating the system solution's capabilities and feature set after in-person demonstrations. Outside of our lead customer, these organizations have more than ten thousand vehicles under management. BROADBAND WIRELESS -- Sales decreased approximately 13% from $2.6 million in Q4 of FY12 to $2.3 million this period. Weakness in sales of both BWIN and WiMAX products were responsible for most of the revenue drop. -- Software defined radio (SDR) sales remained relatively flat quarter over quarter. YOURLINK -- Revenue remained flat at $3.1 million from Q4 FY12 to Q1 FY13.
CONFERENCE CALL
A conference call and live audio webcast will be held on November 13, 2012 at 1 p.m. ET to discuss the Company's first quarter results. Vecima's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three months ended September 30, 2012 are available under the Company's profile at www.SEDAR.com, and at http://www.vecima.com/financials_ir.php.
To participate in the teleconference, dial 1-800-319-4610 or 1-604-638-5340. The webcast will be available in real time at http://services.choruscall.ca/links/vecima121113.html and will be archived on the Vecima website at http://www.vecima.com/events_ir.php.
About Vecima Networks
Vecima Networks Inc. (TSX:VCM) designs, manufactures and sells products that enable broadband access to cable, wireless and telephony networks. Vecima's hardware products incorporate original embedded software to meet the complex requirements of next-generation, high-speed digital networks. Service providers use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services. Vecima's solutions allow service providers to rapidly and cost-effectively bridge the final network segment that connects the system directly to end users, commonly referred to as "the last mile", by overcoming the bottleneck resulting from insufficient carrying capacity in legacy, last mile infrastructures. Vecima's products are directed at two principal markets: Converged Wired Solutions and Broadband Wireless. The Company has also developed and continues to focus on developing products to address emerging markets such as Voice over Internet Protocol, fibre to the home and IP video. More information is available at our website at www.vecima.com.
Forward-Looking Statements
Certain statements in this press release may constitute forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include but are not limited to statements regarding management's intentions, belief or current expectations with respect to market and general economic conditions, future sales and revenue expectations, future costs and operating performance. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and/or are beyond our control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include, but are not limited to, the current significant general economic uncertainty and credit and financial market volatility and the distinctive characteristics of Vecima's operations and industry and customer demand that may have a material impact on, or constitute risk factors in respect of Vecima's future financial performance, as set forth under the heading "Risk Factors" in the Company's Annual Information Form dated September 28, 2012, a copy of which is available at www.sedar.com. In addition, although the forward-looking statements in this press release are based on what management believes are reasonable assumptions, such assumptions may prove to be incorrect. Consequently, readers should not place undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Vecima disclaims any intention or obligation to update or revise any forward-looking statements, as a result of new information, future events or otherwise, except as required by law.
VECIMA NETWORKS INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (unaudited - in thousands of Canadian dollars) September 30, June 30, 2012 2012 --------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 11,723 $ 19,549 Marketable securities 14,008 - Accounts receivable 19,747 23,818 Income tax receivable 13,621 13,600 Inventories 30,787 29,663 Prepaid expenses 1,481 1,076 --------------------------------------------------------------------------- 91,367 87,706 Non-current assets Property, plant and equipment 27,608 28,158 Assets held for resale - 385 Intangible assets 11,506 10,819 Investment tax credit asset 31,394 30,384 Deferred tax asset 3,899 5,129 --------------------------------------------------------------------------- $ 165,774 $ 162,581 --------------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities $ 12,446 $ 13,653 Provisions 891 974 Income tax payable - 806 Deferred revenue 1,205 1,311 Current portion of long-term debt 250 250 --------------------------------------------------------------------------- 14,792 16,994 Non-current liabilities Other long-term liabilities 488 342 Provisions 1,504 1,522 Long-term debt 3,417 3,479 --------------------------------------------------------------------------- 20,201 22,337 --------------------------------------------------------------------------- Shareholders' equity Share capital 34,484 34,482 Reserves 2,778 2,761 Retained earnings 108,311 103,001 --------------------------------------------------------------------------- 145,573 140,244 --------------------------------------------------------------------------- $ 165,774 $ 162,581 --------------------------------------------------------------------------- VECIMA NETWORKS INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited - in thousands of Canadian dollars except net income per share data) Three months ended September 30, 2012 2011 --------------------------------------------------------------------------- Sales $ 24,872 $ 19,981 Cost of sales 14,829 12,677 --------------------------------------------------------------------------- Gross margin 10,043 7,304 --------------------------------------------------------------------------- Operating expenses Research and development 1,898 2,764 Sales and marketing 1,026 1,182 General and administrative 4,461 5,040 Stock-based compensation 17 22 Other (income) (4,155) (310) --------------------------------------------------------------------------- 3,247 8,698 --------------------------------------------------------------------------- Operating income (loss) 6,796 (1,394) Finance costs 235 136 Finance income 39 534 --------------------------------------------------------------------------- Income (loss) before income taxes 6,600 (996) Income tax expense (recovery) 1,290 (275) --------------------------------------------------------------------------- Net income and total comprehensive income $ 5,310 $ (721) --------------------------------------------------------------------------- Net income per share Basic $ 0.24 $ (0.03) Diluted $ 0.24 $ (0.03) Weighted average number of Common Shares outstanding - basic 22,317,339 22,316,767 Shares outstanding - diluted 22,382,537 22,316,767 VECIMA NETWORKS INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited - in thousands of Canadian dollars) Share Retained Capital Reserves Earnings Total --------------------------------------------------------------------------- Balance as at June 30, 2011 $ 34,482 $ 2,678 $ 89,735 $ 126,895 Net income and total comprehensive income - - (721) (721) Share-based payment expense - 22 - 22 --------------------------------------------------------------------------- Balance as at September 30, 2011 $ 34,482 $ 2,700 $ 89,014 $ 126,196 --------------------------------------------------------------------------- Balance as at June 30, 2012 $ 34,482 $ 2,761 $ 103,001 $ 140,244 Net income and total comprehensive income - - 5,310 5,310 Shares issued by exercising options 2 - 2 Share-based payment expense - 17 - 17 --------------------------------------------------------------------------- Balance as at September 30, 2012 $ 34,484 $ 2,778 $ 108,311 $ 145,573 --------------------------------------------------------------------------- VECIMA NETWORKS INC. CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited - in thousands of Canadian dollars) Three months ended September 30, 2012 2011 --------------------------------------------------------------------------- Cash flows from operating activities Net income $ 5,310 $ (721) Add (deduct) items not requiring cash Gain on the sale of property, plant and equipment (3,590) (13) Gain on sale of intangible assets (353) (79) Depreciation of property, plant and equipment 1,175 1,283 Amortization of deferred development costs 555 1,240 Amortization of finite-life intangible assets 37 41 Stock-based compensation 17 22 Deferred income tax expense 1,230 (212) Interest expense 58 136 Interest income (40) (25) Increase in other long-term liabilities 146 (30) Increase in provisions (101) 640 Increase in investment tax credit asset (182) (134) Net change in non-cash working capital relating to operations 393 3,545 Interest paid (46) (129) Interest received 37 25 Income tax paid --------------------------------------------------------------------------- 4,646 5,589 --------------------------------------------------------------------------- Cash flows provided by investing activities Purchase of property, plant and equipment (638) (921) Proceeds from the sale of property, plant and equipment 3,988 139 Proceeds from the sale of intangible assets 363 150 Purchase of marketable securities (14,008) - Deferred development costs (2,114) (2,205) Purchase of indefinite and finite-life intangible assets (3) (14) --------------------------------------------------------------------------- (12,412) (2,851) --------------------------------------------------------------------------- Cash flows used in financing activities Proceeds from shares issued through exercised options 2 - Repayment of long-term debt (62) (62) --------------------------------------------------------------------------- (60) (62) --------------------------------------------------------------------------- Increase in cash during the year (7,826) 2,676 Cash and cash equivalents (bank indebtedness), beginning of year 19,549 5,095 --------------------------------------------------------------------------- Cash and cash equivalents, end of year $ 11,723 $ 7,771 ---------------------------------------------------------------------------
Contacts: Vecima Networks Inc. Investor Relations 250-881-1982invest@vecima.com www.vecima.com
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