- Revenue - $22.7M, Gross
Margin - 56.7%, EPS - $0.09, Adj.
EBITDA - $5.5M
- Record Quarter for Content Delivery and Storage
Segment
- Significant increase in global activity and customer
engagement with Entra
VICTORIA,
Feb. 7, 2019 /CNW/
- Vecima Networks Inc. (TSX:VCM), an experienced
designer and manufacturer of innovative technology solutions, today
reported financial results for the three and six months ended
December 31, 2018.
FINANCIAL HIGHLIGHTS
(Canadian
dollars in millions except
percentages, employees, and per share data)
|
Q2FY19
|
Q1FY19
|
|
Q2FY18
|
Revenue
|
$22.7
|
$21.3
|
|
$14.8
|
Gross
Margin
|
56.7%
|
52.5%
|
|
52.3%
|
Net
Income/(Loss)
|
$2.1
|
($1.1)
|
|
$1.3
|
Earnings/(Loss) Per
Share1
|
$0.09
|
($0.05)
|
|
$0.06
|
Adjusted
EBITDA2
|
$5.5
|
$1.9
|
|
$3.6
|
Cash and Short-term
Investments
|
$44.5
|
$53.4
|
|
$61.0
|
Employees
|
389
|
384
|
|
3143
|
1 Based on weighted
average number of shares outstanding. 2 Adjusted EBITDA
does 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 Earnings Per Share"
below. 3 Does not include the 99
employees added through the Concurrent acquisition on December 31,
2017
|
"We achieved record results in our Content Delivery and
Storage segment during the second quarter, while continuing to
invest in differentiated technology solutions that position Vecima
at the forefront of the large global markets we serve,"
said Sumit Kumar, Vecima
Networks' President and CEO.
"Vecima is capitalizing on the continued build-up in the
emerging IPTV market, which supports leading-edge services like
time-shift TV, streaming and Cloud DVR using our innovative
platforms. Our IPTV deployments continued to expand in Q2, and we
see an expansive pipeline of future opportunities in the U.S.,
European, Latin America, and
Asia-Pacific markets as the
industry begins the broader transition to IPTV."
As anticipated, Content Delivery and Storage revenues in
the second quarter were also bolstered by timing changes that
delayed orders in Q1. Overall demand for our MediaScaleX™ platforms
continued to grow.
"In our Video and Broadband segment, we made further
strides in development of our Entra family of products which
addresses the industry evolution to DOCSIS 3.1 distributed access
architecture (DAA). We are now in lab trials with multiple MSOs,
including Tier 1, 2 and 3 operators, and while the broader industry
operationalization of DAA is widely acknowledged to be progressing
slowly, we are on track for field trials in calendar 2019," added
Mr. Kumar.
BUSINESS HIGHLIGHTS
Video and Broadband Solutions
- Progressing through lab trials with multiple
MSOs
- Initiated lab trials for Entra Remote PHY Node with a
European Tier 1 MSO
- On track to move to DAA field trials in calendar
2019
Content Delivery and Storage
- Achieved record quarter with revenues of $14.3 million
- MediaScaleX//Storage™ revenues hit all-time high,
signifying the differentiation of Vecima's object storage
technology in media-intensive environments, such as Cloud DVR and
time shift
- Further expansion into accelerating IPTV market with
another MSO, bringing to nine, the number of operators using Vecima
platforms for core IPTV video services
Telematics
- Following shortly after the Q4FY18 contract win with
City of Victoria, selected by
another major Western Canadian municipality for deployment related
to winter and summer equipment fleets
- Achieved initial revenue contribution from newly released
Nero Equipment Tracking product which targets the asset tracking
market and augments Vecima's fleet management business
Added Mr. Kumar, "Going forward, demand for gigabit
internet and IPTV is creating vast new markets for Vecima. We
intend to continue to invest in our leading technologies and
capitalize on the strong differentiation of our products as these
wide-reaching network evolutions roll out."
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 March 18, 2019 to
shareholders of record as at February 22,
2019.
CONFERENCE CALL
A conference call and live audio webcast will be held
today, February 7, 2019 at
1 p.m. ET to discuss the Company's
first quarter results. Vecima's unaudited consolidated
financial statements and management's discussion and analysis for
the three and six months ended December 31,
2018 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/vecima20190207.html and will be
archived on the Vecima website at
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
www.vecima.com.
Adjusted EBITDA and Adjusted Earnings Per
Share
Adjusted EBITDA and Adjusted 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 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 Earnings Per Share, investors should refer to
Vecima's Management's Discussion and Analysis for the second
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 are continuing to invest in differentiated
technology solutions that position Vecima at the forefront of the
large global markets we serve; we are capitalizing on
the continued build-up in the emerging IPTV market, which supports
leading-edge services like time-shift TV, streaming and Cloud DVR
using our innovative platforms; we see an expansive pipeline of
future opportunities in the U.S., European, Latin America, and Asia-Pacific markets as the industry begins
the broader transition to IPTV; overall demand for our MediaScaleX™
platforms continued to grow; we made further strides in development
of our Entra family of products which addresses the industry
evolution to DOCSIS 3.1 distributed access architecture; while the
broader industry operationalization of DAA is widely acknowledged
to be progressing slowly, we are on track to move to DAA field
trials in calendar 2019; demand for gigabit internet and IPTV is
creating vast new markets for Vecima; we intend to continue to
invest in our leading technologies and capitalize on the strong
differentiation of our products as these wide-reaching network
evolutions roll out.
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)
|
|
|
|
|
|
|
|
December 31,
2018
|
|
June 30,
2018
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8,024
|
$
|
11,034
|
Short‑term
investments
|
|
36,451
|
|
46,660
|
Accounts
receivable
|
|
19,101
|
|
17,997
|
Income tax
receivable
|
|
2,316
|
|
2,519
|
Inventories
|
|
16,725
|
|
15,020
|
Prepaid
expenses
|
|
2,244
|
|
1,658
|
Contract
assets
|
|
414
|
|
-
|
|
|
85,275
|
|
94,888
|
Non‑current
assets
|
|
|
|
|
Property, plant and
equipment
|
|
11,416
|
|
12,105
|
Goodwill
|
|
15,234
|
|
14,903
|
Intangible
assets
|
|
66,844
|
|
62,324
|
Other long‑term
assets
|
|
1,224
|
|
788
|
Investment tax
credit
|
|
23,764
|
|
22,692
|
Deferred tax
asset
|
|
2,425
|
|
2,339
|
|
$
|
206,182
|
$
|
210,039
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
9,491
|
$
|
12,151
|
Income tax
payable
|
|
539
|
|
358
|
Provisions
|
|
431
|
|
520
|
Deferred
revenue
|
|
3,378
|
|
4,206
|
Current portion of
long‑term debt
|
|
250
|
|
250
|
|
|
14,089
|
|
17,485
|
Non‑current
liabilities
|
|
|
|
|
Deferred
revenue
|
|
899
|
|
524
|
Provisions
|
|
321
|
|
352
|
Deferred tax
liability
|
|
430
|
|
414
|
Long‑term
debt
|
|
1,833
|
|
1,979
|
|
|
17,572
|
|
20,754
|
Shareholders'
equity
|
|
|
|
|
Share
capital
|
|
1,755
|
|
1,756
|
Reserves
|
|
4,115
|
|
4,041
|
Retained
earnings
|
|
180,686
|
|
182,411
|
Accumulated other
comprehensive income
|
|
2,054
|
|
1,077
|
|
|
188,610
|
|
189,285
|
|
$
|
206,182
|
$
|
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
December 31,
|
|
Six months
ended
December 31,
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
Sales
|
$
|
22,654
|
$
|
14,752
|
|
$
|
43,989
|
$
|
29,634
|
Cost of
sales
|
|
9,814
|
|
7,032
|
|
|
19,958
|
|
13,436
|
Gross
profit
|
|
12,840
|
|
7,720
|
|
|
24,031
|
|
16,198
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
4,567
|
|
3,045
|
|
|
9,171
|
|
6,208
|
Sales and
marketing
|
|
3,252
|
|
1,113
|
|
|
6,452
|
|
2,221
|
General and
administrative
|
|
4,006
|
|
2,540
|
|
|
8,009
|
|
5,150
|
Restructuring
costs
|
|
-
|
|
-
|
|
|
757
|
|
-
|
Stock‑based
compensation
|
|
40
|
|
14
|
|
|
74
|
|
27
|
Other (income)
expense
|
|
(278)
|
|
(89)
|
|
|
(366)
|
|
(171)
|
|
|
11,587
|
|
6,623
|
|
|
24,097
|
|
13,435
|
Operating income
(loss)
|
|
1,253
|
|
1,097
|
|
|
(66)
|
|
2,763
|
Finance
income
|
|
27
|
|
386
|
|
|
249
|
|
684
|
Foreign exchange gain
(loss)
|
|
1,593
|
|
300
|
|
|
1,076
|
|
(370)
|
Income before
income taxes
|
|
2,873
|
|
1,783
|
|
|
1,259
|
|
3,077
|
Income tax
expense
|
|
823
|
|
454
|
|
|
305
|
|
784
|
Net income from
continuing operations
|
|
2,050
|
|
1,329
|
|
|
954
|
|
2,293
|
Net income from
discontinued operations
|
|
-
|
|
1
|
|
|
-
|
|
7,063
|
Net
income
|
|
2,050
|
|
1,330
|
|
|
954
|
|
9,356
|
Other
comprehensive income
|
|
|
|
|
|
|
|
|
|
Item that may be
subsequently reclassed to net income
|
|
|
|
|
|
Exchange differences
on translating
|
|
|
|
|
|
|
|
|
|
foreign
operations
|
|
1,395
|
|
-
|
|
|
977
|
|
-
|
Comprehensive
income
|
$
|
3,445
|
$
|
1,330
|
|
$
|
1,931
|
$
|
9,356
|
Net income per
share
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
0.09
|
|
0.06
|
|
|
0.04
|
|
0.10
|
Discontinued
operations
|
|
-
|
|
-
|
|
|
-
|
|
0.32
|
Total basic net
income per share
|
$
|
0.09
|
$
|
0.06
|
|
$
|
0.04
|
$
|
0.42
|
Continuing
operations
|
|
0.09
|
|
0.06
|
|
|
0.04
|
|
0.10
|
Discontinued
operations
|
|
-
|
|
-
|
|
|
-
|
|
0.32
|
Total diluted net
income per share
|
$
|
0.09
|
$
|
0.06
|
|
$
|
0.04
|
$
|
0.42
|
Weighted average
number of common shares
|
|
|
|
|
|
|
|
|
Shares outstanding ‑
basic
|
|
22,368,234
|
|
22,447,389
|
|
|
22,370,641
|
|
22,413,520
|
Shares outstanding ‑
diluted
|
|
22,371,522
|
|
22,499,411
|
|
|
22,376,886
|
|
22,470,074
|
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
|
|
-
|
|
-
|
|
9,356
|
|
-
|
|
9,356
|
|
Dividends
|
|
-
|
|
-
|
|
(2,467)
|
|
-
|
|
(2,467)
|
|
Share repurchased and
cancelled
|
|
-
|
|
-
|
|
(75)
|
|
-
|
|
(75)
|
|
Shares issued by
exercising options
|
|
9
|
|
(3)
|
|
-
|
|
-
|
|
6
|
|
Shares issued in
exchange for
|
|
|
|
|
|
|
|
-
|
|
|
|
short‑term
investments
|
|
948
|
|
-
|
|
-
|
|
|
|
948
|
|
Share‑based payment
expense
|
|
-
|
|
27
|
|
-
|
|
-
|
|
27
|
|
Balance at
December 31, 2017
|
$
|
1,760
|
$
|
3,989
|
$
|
184,288
|
$
|
-
|
$
|
190,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June
30, 2018
|
$
|
1,756
|
$
|
4,041
|
$
|
182,411
|
$
|
1,077
|
$
|
189,285
|
|
IFRS 15 transition
impact
|
|
-
|
|
-
|
|
(102)
|
|
-
|
|
(102)
|
|
Adjusted balance
at June 30, 2018
|
|
1,756
|
|
4,041
|
|
182,309
|
|
1,077
|
|
189,183
|
Net income
|
|
-
|
|
-
|
|
954
|
|
-
|
|
954
|
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
977
|
|
977
|
|
Dividends
|
|
-
|
|
-
|
|
(2,461)
|
|
-
|
|
(2,461)
|
|
Share repurchased and
cancelled
|
|
(1)
|
|
-
|
|
(116)
|
|
-
|
|
(117)
|
|
Share‑based payment
expense
|
|
-
|
|
74
|
|
-
|
|
-
|
|
74
|
|
Balance at
December 31, 2018
|
$
|
1,755
|
$
|
4,115
|
$
|
180,686
|
$
|
2,054
|
$
|
188,610
|
|
Vecima Networks
Inc. condensed interim consolidated Statements of
Changes in Equity (unaudited ‑ in thousands of Canadian
dollars)
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Six months
ended
December 31,
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
|
2,050
|
$
|
1,329
|
|
$
|
954
|
$
|
2,293
|
Adjustments to
reconcile net income to cash from
operating activities
|
|
3,239
|
|
1,899
|
|
|
5,230
|
|
3,509
|
Increase in other
long‑term assets
|
|
(198)
|
|
-
|
|
|
(179)
|
|
-
|
Decrease in
provisions
|
|
(241)
|
|
(61)
|
|
|
(137)
|
|
(215)
|
Increase in
investment tax credit
|
|
(21)
|
|
(66)
|
|
|
(48)
|
|
(133)
|
Net‑change in
non‑cash working capital
relating to operations
|
|
(5,807)
|
|
(2,823)
|
|
|
(6,217)
|
|
3,525
|
Interest
paid
|
|
(26)
|
|
(22)
|
|
|
(50)
|
|
(43)
|
Interest
received
|
|
250
|
|
328
|
|
|
531
|
|
647
|
Income tax
received
|
|
147
|
|
-
|
|
|
409
|
|
-
|
Income tax
paid
|
|
(106)
|
|
-
|
|
|
(457)
|
|
-
|
Net cash (used)
provided by continuing operations
|
|
(713)
|
|
584
|
|
|
36
|
|
9,583
|
Net cash (used)
provided by discontinued operations
|
|
-
|
|
(3)
|
|
|
-
|
|
72
|
Net cash (used)
provided by operations
|
|
(713)
|
|
581
|
|
|
36
|
|
9,655
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(350)
|
|
(250)
|
|
|
(1,090)
|
|
(468)
|
Proceeds from sale of
property, plant
and equipment
|
|
3
|
|
-
|
|
|
3
|
|
3
|
Purchase of
short‑term investments
|
|
(1,212)
|
|
(2,275)
|
|
|
(1,418)
|
|
(8,221)
|
Proceeds on sale of
short‑term investments
|
|
5,900
|
|
15,591
|
|
|
11,627
|
|
38,291
|
Deferred development
costs
|
|
(4,530)
|
|
(3,636)
|
|
|
(8,873)
|
|
(7,178)
|
Purchase of
intangible assets
|
|
(14)
|
|
(18)
|
|
|
(45)
|
|
(40)
|
Business
acquisition
|
|
-
|
|
(37,277)
|
|
|
-
|
|
(37,277)
|
Proceeds from sale of
intangible assets
|
|
202
|
|
-
|
|
|
202
|
|
-
|
Net cash (used)
provided by continuing operations
|
|
(1)
|
|
(27,865)
|
|
|
406
|
|
(14,890)
|
Net cash provided by
discontinued operations
|
|
-
|
|
-
|
|
|
-
|
|
8,732
|
Net cash (used)
provided by investing
|
|
(1)
|
|
(27,865)
|
|
|
406
|
|
(6,158)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
exercised stock options
|
|
-
|
|
6
|
|
|
-
|
|
6
|
Proceeds from
government grants
|
|
-
|
|
9
|
|
|
-
|
|
49
|
Repurchase and
cancellation of shares
|
|
(61)
|
|
(7)
|
|
|
(117)
|
|
(7)
|
Repayment of
long‑term debt
|
|
(84)
|
|
(63)
|
|
|
(146)
|
|
(104)
|
Proceeds from issuing
shares
|
|
-
|
|
948
|
|
|
-
|
|
948
|
Dividends
paid
|
|
(2,461)
|
|
(2,467)
|
|
|
(2,461)
|
|
(2,467)
|
Net cash used by
financing
|
|
(2,606)
|
|
(1,574)
|
|
|
(2,724)
|
|
(1,575)
|
(Decrease)
increase in cash and cash
equivalents during the period
|
|
(3,320)
|
|
(28,858)
|
|
|
(2,282)
|
|
1,922
|
Effect of change in
exchange rate on cash held
|
|
(903)
|
|
-
|
|
|
(728)
|
|
-
|
Cash, beginning of
period
|
|
12,247
|
|
34,297
|
|
|
11,034
|
|
3,517
|
Cash, end of
period
|
$
|
8,024
|
$
|
5,439
|
|
$
|
8,024
|
$
|
5,439
|
SOURCE Vecima Networks Inc.