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Vecima Networks Inc.

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Vecima Reports Q3 Fiscal 2019 Results
Vecima Reports Q3 Fiscal 2019 Results

Canada NewsWire

  • Revenue - $20.3M, Gross Margin 52.6%, Cash Balance: $47.2M
  • Entra Remote PHY Node and Monitor driving forward in lab evaluations at multiple operators
  • Q3 revenue for Video and Broadband Solutions increased 78% from Q2

VICTORIA, May 9, 2019 /CNW/ - Vecima Networks Inc. (TSX:VCM), an experienced designer and manufacturer of innovative technology solutions, today reported financial results for the three and nine months ended March 31, 2019.

Vecima 2019 logo (CNW Group/Vecima Networks Inc.)

FINANCIAL HIGHLIGHTS

(Canadian dollars in millions except
percentages, employees, and per share data)

Q3FY19

Q2FY19


Q3FY18

Revenue

$20.3

$22.7


$24.1

Gross Margin

52.6%

56.7%


51.3%

Net (Loss)/Income

($1.5)

$2.1


$0.7

(Loss)/Earnings Per Share1

($0.07)

$0.09


$0.03

Adjusted (Loss)/Earnings Per Share1, 2

($0.07)

$0.08


$0.03

Adjusted EBITDA2

$0.4

$5.5


$3.8

Cash and Short-term Investments

$47.2

$44.5


$64.1

Employees

390

389


410

1Based on weighted average number of shares outstanding.
2Adjusted (Loss)/Earnings Per Share and Adjusted EBITDA do not have a standardized meaning under IFRS and
therefore may not be comparable to similar measures provided by other issuers. See "Adjusted EBITDA and
Adjusted (Loss)/Earnings Per Share" below

 

"We made significant progress in the third quarter as we position Vecima for industry leadership both in the DOCSIS 3.1 Distributed Access Architecture ("DAA") market and in the IP video content delivery and storage space," said Sumit Kumar, Vecima Networks' President and CEO.

"Our Entra products are well along the commercialization path and provide industry leading features and performance to cable operators. We remain highly focused on realizing near-term opportunities with customers that are closest to a DAA transition. Our R&D priorities are closely aligned with this objective and we continue to see field trial activity building in calendar 2019."

"In our Content Delivery and Storage segment, third quarter sales were lower than anticipated. As is typical for this segment, revenues varied significantly from our record Q2 results, largely as a result of order timing. We expect revenue momentum to resume in Q4 and continue to anticipate strong contribution from this segment on a full-year basis."

BUSINESS HIGHLIGHTS

Video and Broadband Solutions

  • Continued progress on Entra DAA family of products
    • On-site lab engagement with a diverse group of Tier 1 and Tier 2 cable operators
      • Entra Remote PHY Node and Remote PHY Monitor have entered next series of formal lab evaluations
    • On track to move to DAA field trials with several customers
  • Significant deployment of TC600E with Tier 1 customer undertaking an MPEG-4 densification program
  • Market leading Terrace family of commercial video platforms continue wide adoption across largest operators

Content Delivery and Storage

  • Quarterly revenue fluctuation related to order timing; revenue momentum expected to resume in Q4 as overall penetration of IPTV continues

Telematics

  • Completed installation of PathView, our winter operations tracking interface, as part of our fleet management solution for the City of Victoria

Added Mr. Kumar, "Across the company we are focused on realizing the emerging opportunities in our core markets. In our Video and Broadband Solutions segment, some of the larger cable operators have been delayed in their roll out to DAA, though a number of operators are now making definitive progress toward field trials and deployment. Vecima is prepared for the first revenue opportunities as they become available."

"In our Content Delivery and Storage segment, we are also making excellent strides in the IPTV market and continue to see an expansive pipeline of new opportunities in the U.S., European, Latin American and Asia–Pacific markets."

"We intend to keep investing in Vecima's future while continuing to assess attractive acquisitions in emerging technology that will complement and augment our existing product lines, helping to drive our growth and success," said Mr. Kumar.

As previously reported, Vecima's Board of Directors declared a quarterly dividend of $0.055 per share for the period. The dividend will be payable on June 17, 2019 to shareholders of record as at May 24, 2019.

CONFERENCE CALL

A conference call and live audio webcast will be held today, May 9, 2019 at 1 p.m. ET to discuss the Company's third quarter results. Vecima's unaudited condensed consolidated financial statements and management's discussion and analysis for the three and nine months ended March 31, 2019 are available under the Company's profile at www.SEDAR.com, and at www.vecima.com/financials/.

To participate in the teleconference, dial 1-800-319-4610 or 1-604-638-9020. The webcast will be available in real time at http://services.choruscall.ca/links/vecima20190509.html and will be archived on the Vecima website at http://www.vecima.com/shareholder-events/

About Vecima Networks
Vecima Networks Inc. is a global leader focused on developing integrated hardware and scalable software solutions for broadband access, content delivery, and telematics. We enable the world's leading innovators to advance, connect, entertain, and analyze. We build technologies that transform content delivery and storage, enable high‑capacity broadband network access, and streamline data analytics. For more information, please visit our website at www.vecima.com.

Adjusted EBITDA and Adjusted (Loss)/Earnings Per Share
Adjusted EBITDA and Adjusted (Loss)/Earnings Per Share do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. Accordingly, investors are cautioned that Adjusted EBITDA or Adjusted (Loss)/Earnings Per Share should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company's financial performance or as a measure of its liquidity and cash flows. For a reconciliation of Adjusted EBITDA or Adjusted (Loss)/Earnings Per Share, investors should refer to Vecima's Management's Discussion and Analysis for the third quarter of fiscal 2019.

Forward-Looking Statements
This news release contains "forward-looking information" within the meaning of applicable securities laws.  Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions.  Forward-looking information in this news release includes the following statements: We made significant progress in the third quarter as we position Vecima for industry leadership both in the DOCSIS 3.1 Distributed Access Architecture ("DAA") market and in the IP video content delivery and storage space; our Entra products are well along the commercialization path and provide industry leading features and performance to top Tier cable operators;  we remain highly focused on realizing near-term opportunities with customers that are closest to a DOCSIS 3.1 DAA transition; our R&D priorities are closely aligned with this objective and we continue to anticipate field trials in calendar 2019; as is typical for this segment, revenues varied significantly as a result of order timing; we expect revenue momentum to resume in Q4 and continue to anticipate strong contribution from this segment on a full-year basis; we are on track to move to DAA field trials with several customers; market leading Terrace family of commercial video platforms continue wide adoption across largest operators; quarterly revenue fluctuation related to order timing; revenue momentum is expected to resume in Q4 as overall penetration of IPTV continues; we are focused on realizing the emerging opportunities in our core markets; some of the larger cable operators have been delayed in their roll out to DAA; a number of operators are now making definitive progress towards field trials and deployment; Vecima is prepared for the first revenue opportunities as they become available; we are making excellent strides in the IPTV market for and continue to see an expansive pipeline of new opportunities in the U.S., European, Latin American and Asia–Pacific markets; we intend to keep investing in Vecima's future while continuing to assess attractive acquisitions in emerging technology that will complement and augment our existing product lines, helping to drive our growth and success.

A more complete discussion of the risks and uncertainties facing Vecima is disclosed under the heading "Risk Factors" in the Company's Annual Information Form dated September 27, 2018, as well as the Company's continuous disclosure filings with Canadian securities regulatory authorities available at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Vecima disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.


 

Vecima Networks Inc.

Condensed Interim Consolidated Statements of Financial Position

(unaudited - in thousands of Canadian dollars)







March 31,
2019

June 30,
2018

Assets








Current assets




Cash and cash equivalents


$            19,033

$            11,034

Short‑term investments


28,143

46,660

Accounts receivable


15,213

17,997

Income tax receivable


2,453

2,519

Inventories


14,567

15,020

Prepaid expenses


2,355

1,658

Contract assets


216

-



81,980

94,888

Non‑current assets




Property, plant and equipment


11,489

12,105

Goodwill


15,047

14,903

Intangible assets


67,765

62,324

Other long‑term assets


996

788

Investment tax credits


24,275

22,692

Deferred tax asset


2,828

2,339



$          204,380

$          210,039

Liabilities








Current liabilities




Accounts payable and accrued liabilities


$            10,543

$            12,151

Deferred revenue


4,969

4,206

Provisions


349

520

Income tax payable


5

358

Current portion of long‑term debt


250

250



16,116

17,485

Non‑current liabilities




Deferred revenue


824

524

Provisions


327

352

Deferred tax liability


33

414

Long‑term debt


1,792

1,979



19,092

20,754

Shareholders' equity




Share capital


1,754

1,756

Reserves


4,143

4,041

Retained earnings


177,921

182,411

Accumulated other comprehensive income


1,470

1,077



185,288

189,285



$          204,380

$          210,039


 

Vecima Networks Inc.


Condensed Interim Consolidated Statements of Income


and Other Comprehensive Income


(unaudited - in thousands of Canadian dollars except net income per share data)









Three months ended
March 31,

Nine months ended
March 31,




2019

2018

2019

2018


Sales


$       20,328

$    24,124

$       64,317

$       53,758


Cost of sales


9,642

11,743

29,600

25,179


Gross profit


10,686

12,381

34,717

28,579


Operating expenses







Research and development


4,797

4,466

13,967

10,674


Sales and marketing


4,029

4,015

10,481

6,236


General and administrative


4,247

4,119

12,256

9,269


Restructuring costs


-

-

757

-


Share‑based compensation


28

22

102

49


Other expense (income)


(69)

(54)

(435)

(225)




13,032

12,568

37,128

26,003


Operating (loss) income


(2,346)

(187)

(2,411)

2,576


Finance (loss) income


301

237

550

921


Foreign exchange (loss) gain


(619)

846

457

476


(Loss) income before income taxes


(2,664)

896

(1,404)

3,973


Income tax (recovery) expense


(1,203)

194

(898)

978


Net (loss) income from continuing operations


(1,461)

702

(506)

2,995


Net income from discontinued operations


-

1

-

7,064


Net (loss) income


(1,461)

703

(506)

10,059


Other comprehensive (loss) income







Item that may be subsequently reclassed to net income







Exchange differences on translating foreign operations


(584)

627

393

627


Comprehensive (loss) income


$       (2,045)

$     1,330

$          (113)

$       10,686


Net (loss) income per share







Continuing operations


(0.07)

0.03

(0.02)

0.13


Discontinued operations


-

-

-

0.32


Total basic net (loss) income per share


$         (0.07)

$       0.03

$         (0.02)

$           0.45


Continuing operations


(0.07)

0.03

(0.02)

0.13


Discontinued operations


-

-

-

0.32


Total diluted net (loss) income per share


$         (0.07)

$       0.03

$         (0.02)

$           0.45


Weighted average number of common shares







Shares outstanding ‑ basic


22,355,755

22,443,158

22,378,195

22,423,255


Shares outstanding ‑ diluted


22,355,755

22,480,304

22,378,195

22,473,428




Vecima Networks Inc.

Condensed Interim Consolidated Statements of Changes in Equity

(unaudited - in thousands of Canadian dollars)










Share
capital

Reserves

Retained
earnings

Accumulated
other
comprehensive
income

Total

Balance at June 30, 2017


$          803

$       3,965

$    177,474

$                    -

$    182,242

Net income


-

-

10,059

-

10,059

Other comprehensive income


-

-

-

627

627

Dividends


-

-

(3,701)

-

(3,701)

Share repurchased and cancelled


(6)

-

(592)

-

(598)

Shares issued by exercising options


13

(4)

-

-

9

Shares issued in exchange for short‑term investments


948

-

-

-

948

Share‑based compensation


-

49

-

-

49

Balance at March 31, 2018


$       1,758

$       4,010

$    183,240

$                627

$    189,635















Balance at June 30, 2018


$       1,756

$       4,041

$    182,411

$             1,077

$    189,285

IFRS 15 transition


-

-

(102)

-

(102)

Adjusted balance at July 1, 2018


1,756

4,041

182,309

1,077

189,183

Net loss


-

-

(506)

-

(506)

Other comprehensive income


-

-

-

393

393

Dividends


-

-

(3,690)

-

(3,690)

Share repurchased and cancelled


(2)

-

(192)

-

(194)

Share‑based compensation


-

102

-

-

102

Balance at March 31, 2019


$       1,754

$       4,143

$    177,921

$             1,470

$    185,288


Vecima Networks Inc.

Condensed Interim Consolidated Statements of Cash Flows

(unaudited - in thousands of Canadian dollars)







Three months ended
March 31,

Nine months ended
March 31,



2019

2018

2019

2018

Cash flows from operating activities






Net (loss) income from continuing operations


$    (1,461)

$         702

$       (506)

$      2,995

Adjustments to reconcile net income to cash from operating activities


1,642

2,790

6,872

6,299

Decrease (increase) in other long‑term assets


197

26

(10)

26

Decrease in provisions


(69)

(4)

(206)

(219)

Increase in investment tax credit


(30)

(63)

(78)

(196)

Net‑change in non‑cash working capital relating to operations


8,448

7,004

2,259

10,529

Interest paid


(23)

(23)

(74)

(66)

Interest received


242

260

773

907

Income tax received


-

-

409

-

Income tax paid


(342)

-

(799)

-

Net cash provided by continuing operations


8,604

10,692

8,640

20,275

Net cash provided by discontinued operations


-

1

-

73

Net cash provided by operations


8,604

10,693

8,640

20,348

Cash flows from investing activities






Purchase of property, plant and equipment


(699)

(782)

(1,789)

(1,250)

Proceeds from sale of property, plant and equipment


5

68

8

71

Purchase of short‑term investments


(263)

(35,969)

(1,681)

(44,190)

Proceeds from sale of short‑term investments


8,571

42,386

20,198

80,677

Deferred development costs


(4,322)

(4,418)

(13,195)

(11,596)

Purchase of intangible assets


(40)

(84)

(85)

(124)

Business acquisition


-

(102)

-

(37,379)

Proceeds from sale of intangible assets


-

-

202

-

Net cash provided (used) by continuing operations


3,252

1,099

3,658

(13,791)

Net cash provided by discontinued operations


-

-

-

8,732

Net cash provided (used) by investing


3,252

1,099

3,658

(5,059)

Cash flows from financing activities






Proceeds from exercised stock options


-

3

-

9

Proceeds from government grants


147

-

147

49

Repurchase and cancellation of shares


(77)

(591)

(194)

(598)

Repayment of long‑term debt


(41)

(62)

(187)

(166)

Proceeds from issuing shares


-

-

-

948

Dividends paid


(1,229)

(1,234)

(3,690)

(3,701)

Net cash used by financing


(1,200)

(1,884)

(3,924)

(3,459)

Increase in cash and cash equivalents during the period


10,656

9,908

8,374

11,830

Effect of change in exchange rate on cash held


353

(406)

(375)

(406)

Cash and cash equivalents, beginning of period


8,024

5,439

11,034

3,517

Cash and cash equivalents, end of period


$     19,033

$     14,941

$     19,033

$     14,941

 

SOURCE Vecima Networks Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/May2019/09/c6711.html

Vecima Networks, Investor Relations - 250-881-1982, invest@vecima.comCopyright CNW Group 2019

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