• 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.

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

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.
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.

Copyright 2019 Canada NewsWire

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