Vecima Reports Q4 and Fiscal 2018 Results
Vecima Reports Q4 and Fiscal 2018 Results
Canada NewsWire
VICTORIA, Sept. 27, 2018
- FY2018 Revenue – grew 9% to $78.1M
- Gross Margin – 54%, EPS - $0.48
- Continued progress on Entra DOCSIS 3.1 platform
- Strong performance from new Content Delivery & Storage segment
VICTORIA, Sept. 27, 2018 /CNW/ - Vecima Networks Inc. (TSX:VCM) today reported financial results for the three and twelve month periods ended June 30, 2018.
FINANCIAL HIGHLIGHTS
(Canadian dollars in millions except percentages, | Q4FY18 | Q4FY17 | FY2018 | FY2017 | |
Revenue | $24.4 | $14.6 | $78.1 | $71.5 | |
Gross margin | 55% | 51% | 54% | 52% | |
Net income | $0.7 | $ (0.1) | $10.8 | $18.0 | |
Earnings per share1 | $0.03 | $ (0.01) | $0.48 | $0.81 | |
Adjusted earnings per share1,2 | $0.04 | $0.00 | $0.17 | $0.40 | |
Adjusted EBITDA2 | $4.4 | $2.4 | $14.5 | $20.3 | |
Cash and short-term investments | $57.7 | $89.2 | $57.7 | $89.2 | |
Employees | 419 | 3523 | 419 | 3523 | |
1Based on weighted average number shares outstanding | |||||
"Fiscal 2018 was a year of expansion and broad strategic progress for Vecima," said Sumit Kumar, Vecima Networks' President and CEO. "Revenues grew 9% to $78.1 million; we increased our gross margin to 54%, achieved EPS of $0.48, generated Adjusted EBITDA of $14.5 million and ended the year with a cash balance of $57.7 million, after completing a major acquisition and making significant investments in new product development. We also turned in a strong fourth quarter, with revenues up 66% to $24.4 million, gross margin increasing to 55%, and Adjusted EBITDA increasing by 80% to $4.4 million year-over-year as we benefited from the addition of our new Content Delivery and Storage operations, which we acquired midway through fiscal 2018."
"In our core cable business, we continued to position Vecima to capitalize on the DOCSIS 3.1 network transformation which is poised to disrupt the global cable industry and support customer demand for gigabit internet speeds and multi-screen IP video. We made great strides in readying our Entra family of DOCSIS 3.1 products for trials during the year, receiving industry recognition for our technologies and moving closer to field trials with our core customers."
"The addition of the Concurrent business has further enhanced Vecima with a complementary and more diversified product portfolio as well as broader market reach. After a smooth integration, the operations are fully meeting our expectations with all product lines enjoying strong market momentum," said Mr. Kumar.
FISCAL 2018 HIGHLIGHTS
Video and Broadband Solutions
- Achieved significant progress on Entra DOCSIS 3.1 solution, demonstrating further functionality and interoperability with several major North American MSOs
- Shipped multiple Entra products, including Remote PHY Access node, Legacy QAM Adapter and Access switch to multiple customer labs in North America and Latin America for integration and vendor qualification
- Terrace family of products sales increased 12% YOY, reflecting strong demand for TC600E
- Successfully completed Terrace DVB field trials with a Tier 1 MSO in Europe
Content Delivery and Storage
- Achieved strong sales momentum with second half of 2018 sales exceeding Concurrent's prior-year results by 12.4% on a comparative basis as product rollouts were increased to Tier 1 and Tier 2 customers
- Deployment of primary IPTV services to multiple Tier 1 and Tier 2 MSOs, adding to a growing list of North American and international customers launching IPTV services on Concurrent platforms
- Strong order flow for Laguna Cache following completion of a feature enhancement for a large Tier 1 U.S. MSO
- In Q4 2018, Laguna Cache honoured with NewBay Media's Best of Show award at NAB 2018
Telematics
- Software release to address fleet management requirements of municipal government customers
- Selected by City of Victoria for provision of fleet management solutions
"Looking ahead, we expect fiscal 2019 to be a period of sharp focus as we pursue the emerging opportunities in the cable broadband sector while also building and developing our new Content Delivery and Storage segment," added Mr. Kumar. "We will be leveraging the complementary nature of these two businesses to provide immediate benefits to our shared customers while addressing larger, commercial opportunities and building Vecima as a stronger global player in the marketplace."
"As we move into fiscal 2019, we are strongly positioned at the forefront of two of the most significant market developments driving the cable industry: the move to gigabit internet and the rapid growth of IP video. We are very excited about the innovative product solutions we are creating in response, and we have the technical and financial strength to continue pursuing our technology roadmap as we position Vecima for industry leadership in the cable broadband and IP video space," 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 November 2, 2018 to shareholders of record on October 12, 2018.
CONFERENCE CALL
A conference call and live audio webcast will be held today, September 27, 2018 at 1 p.m. ET to discuss the Company's fourth quarter and full-year results. Vecima's audited consolidated financial statements and management's discussion and analysis for the three and twelve month period ended June 30, 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/vecima20180927.html and will be archived on the Vecima website at www.vecima.com/shareholder-events/.
About Vecima Networks
Vecima Networks Inc. (TSX:VCM) is a globally recognized leader in creating breakthrough technology solutions that empower network service providers to connect people and enterprises to information and entertainment worldwide. Vecima products for the cable industry allow service providers a cost-effective Last Mile Solution® for both video and broadband access, especially in the demanding business services market segment. Vecima's Video Content Delivery and Storage business, operated under the Concurrent brand, includes solutions and software for industries and customers that focus on storing, protecting, transforming, and delivering high value media assets. Vecima also provides fleet managers the key information and analytics they require to optimally manage their business under the Contigo, NERO Global Tracking, and FleetLynx brands. For more information, please visit our website at 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 fourth quarter of fiscal 2018.
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. In connection with the forward-looking information contained in this news release, Vecima has made numerous assumptions, regarding, among other things: we continue to position Vecima to capitalize on the DOCSIS 3.1 network transformation which is poised to disrupt the global cable industry and support customer demand for gigabit internet speeds and multi-screen IP video; the addition of the Concurrent business has further enhanced Vecima with a complementary and more diversified product portfolio as well as broader market reach; we expect fiscal 2019 to be a period of sharp focus as we pursue the emerging opportunities in the cable broadband sector while also building and developing our new Content Delivery and Storage segment; we will be leveraging the complementary nature of these two businesses to provide immediate benefits to our shared customers while addressing larger, commercial opportunities and building Vecima as a stronger global player in the marketplace; we are strongly positioned at the forefront of two of the most significant market developments driving the cable industry: the move to gigabit internet and the rapid growth of IP video; we are positioning Vecima for industry leadership in the cable broadband and IP video space.
Known risk factors include, among others: future quarterly dividends will be subject to approval of the Board of Directors; Vecima derives a substantial part of its revenue from a few large customers; Vecima may be unable to deliver products associated with key contracts; failure to manage Vecima's business or its growth successfully may adversely affect its operating results; if Vecima cannot meet customers' requirements for manufacturing capacity, sales may suffer; our inability to adapt to technological change, new products and standards could harm our business; if Vecima is required to change its pricing models to compete successfully, Vecima's margins and operating results may be adversely affected; competition from new or existing technologies may adversely affect Vecima's business; Vecima's reliance on third-party suppliers and contract manufacturers reduces its control over its performance; currency fluctuations may adversely affect Vecima; the budgeting cycles of larger cable operators can also result in quarter-to-quarter variability in customer orders, while availability of parts and production capacity can influence the timing of product deliveries; and our operating results are expected to fluctuate.
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
Investor Relations - 250-881-1982
[email protected]
VECIMA NETWORKS INC. | |||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||||
(in thousands of Canadian dollars) | |||||
June 30, 2018 | June 30, 2017 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 11,034 | $ | 3,517 | |
Short‑term investments | 46,660 | 85,675 | |||
Accounts receivable | 17,997 | 12,972 | |||
Income tax receivable | 2,519 | 2,011 | |||
Inventories | 15,020 | 13,928 | |||
Assets held for sale | - | 641 | |||
Prepaid expenses | 1,658 | 1,258 | |||
94,888 | 120,002 | ||||
Non‑current assets | |||||
Property, plant and equipment | 12,105 | 11,109 | |||
Goodwill | 14,903 | 6,111 | |||
Intangible assets | 62,324 | 32,566 | |||
Other long‑term assets | 788 | - | |||
Investment tax credits | 22,692 | 20,141 | |||
Deferred tax asset | 2,339 | 4,066 | |||
$ | 210,039 | $ | 193,995 | ||
Liabilities | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | $ | 12,151 | $ | 6,377 | |
Provisions | 520 | 692 | |||
Income tax payable | 358 | - | |||
Deferred revenue | 4,206 | 2,226 | |||
Current portion of long‑term debt | 250 | 250 | |||
17,485 | 9,545 | ||||
Non‑current liabilities | |||||
Deferred revenue | 524 | - | |||
Provisions | 352 | - | |||
Deferred tax liability | 414 | - | |||
Long‑term debt | 1,979 | 2,208 | |||
20,754 | 11,753 | ||||
Shareholders' equity | |||||
Share capital | 1,756 | 803 | |||
Reserves | 4,041 | 3,965 | |||
Retained earnings | 182,411 | 177,474 | |||
Accumulated other comprehensive income | 1,077 | - | |||
189,285 | 182,242 | ||||
$ | 210,039 | $ | 193,995 | ||
The financial statements were approved by the Board of Directors and authorized for issue on September 25, 2018 and were signed on its behalf by: | ||
(signed) Kent Elliott | (signed) Ben Colabrese | |
Director | Director | |
VECIMA NETWORKS INC. | |||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||
(in thousands of Canadian dollars except net income and per share data) | |||||
Years ended June 30, | |||||
2018 | 2017 | ||||
Sales | $ | 78,104 | $ | 71,460 | |
Cost of sales | 36,254 | 34,439 | |||
Gross profit | 41,850 | 37,021 | |||
Operating expenses | |||||
Research and development | 15,101 | 11,749 | |||
Sales and marketing | 10,463 | 5,285 | |||
General and administrative | 13,248 | 9,875 | |||
Impairment of intangible assets | 22 | 174 | |||
Restructuring costs | - | 986 | |||
Stock‑based compensation | 80 | 321 | |||
Other (income) expense | (317) | (276) | |||
38,597 | 28,114 | ||||
Operating income | 3,253 | 8,907 | |||
Finance income | 1,132 | 1,134 | |||
Foreign exchange gain | 930 | 795 | |||
Income before income taxes | 5,315 | 10,836 | |||
Income tax expense | 1,532 | 3,045 | |||
Net income from continuing operations | 3,783 | 7,791 | |||
Net income from discontinued operations | 7,019 | 10,257 | |||
Net income | 10,802 | 18,048 | |||
Other comprehensive income | |||||
Items that may be subsequently reclassed to net income | |||||
Exchange differences on translating foreign operations | 1,077 | - | |||
Comprehensive income | $ | 11,879 | $ | 18,048 | |
Net income per share | |||||
Continuing operations | 0.17 | 0.35 | |||
Discontinued operations | 0.31 | 0.46 | |||
Total basic net income per share | $ | 0.48 | $ | 0.81 | |
Continuing operations | 0.17 | 0.35 | |||
Discontinued operations | 0.31 | 0.46 | |||
Total diluted net income per share | $ | 0.48 | $ | 0.80 | |
Weighted average number of common shares | |||||
Shares outstanding ‑ basic | 22,414,944 | 22,385,574 | |||
Shares outstanding ‑ diluted | 22,456,821 | 22,434,282 | |||
VECIMA NETWORKS INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||||||||
(in thousands of Canadian dollars) | ||||||||||
Share | Reserves | Retained | Accumulated | Total | ||||||
Balance as at June 30, 2016 | $ | 739 | $ | 3,662 | $ | 164,642 | $ | - | $ | 169,043 |
Net income and comprehensive income | - | - | 18,048 | - | 18,048 | |||||
Dividends | - | - | (4,924) | - | (4,924) | |||||
Shares repurchased and cancelled | (1) | - | (292) | - | (293) | |||||
Shares issued by exercising options | 65 | (18) | - | - | 47 | |||||
Share‑based payment expense | - | 321 | - | - | 321 | |||||
Balance as at June 30, 2017 | 803 | 3,965 | 177,474 | - | 182,242 | |||||
Net income | - | - | 10,802 | - | 10,802 | |||||
Other comprehensive income | - | - | - | 1,077 | 1,077 | |||||
Dividends | - | - | (4,932) | - | (4,932) | |||||
Shares repurchased and cancelled | (8) | - | (933) | - | (941) | |||||
Shares issued by exercising options | 13 | (4) | - | - | 9 | |||||
Shares issued in exchange for short‑term investments | 948 | - | - | - | 948 | |||||
Share‑based payment expense | - | 80 | - | - | 80 | |||||
Balance as at June 30, 2018 | $ | 1,756 | $ | 4,041 | $ | 182,411 | $ | 1,077 | $ | 189,285 |
VECIMA NETWORKS INC. | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(in thousands of Canadian dollars) | ||||
Years ended June 30, | ||||
2018 | 2017 | |||
Cash flows from operating activities | ||||
Net income from continuing operations | $ | 3,783 | $ | 7,791 |
Adjustments to reconcile net income to cash from operating activities | 9,574 | 8,966 | ||
Decrease in provisions | (214) | (235) | ||
Decrease in other long‑term assets | (13) | - | ||
(Increase) decrease in investment tax credit | (238) | 57 | ||
Net change in non‑cash working capital relating to operations | 7,506 | (2,888) | ||
Interest paid | (92) | (85) | ||
Interest received | 1,174 | 1,109 | ||
Income tax received | - | 11 | ||
Income tax paid | (503) | (26) | ||
Net cash provided by continuing operations | 20,977 | 14,700 | ||
Net cash provided (used) by discontinued operations | 63 | (714) | ||
Net cash provided by operations | 21,040 | 13,986 | ||
Cash flows used in investing activities | ||||
Purchase of property, plant and equipment | (1,816) | (1,607) | ||
Proceeds from the sale of property, plant and equipment | 80 | 71 | ||
Purchase of short‑term investments | (54,434) | (39,115) | ||
Proceeds on sale of short‑term investments | 93,449 | 5,312 | ||
Deferred development costs | (16,407) | (12,950) | ||
Purchase of indefinite and finite‑life intangible assets | (134) | (232) | ||
Business acquisition | (37,379) | - | ||
Net cash used by continuing operations | (16,641) | (48,521) | ||
Net cash provided by discontinued operations | 8,732 | 19,586 | ||
Net cash used in investing | (7,909) | (28,935) | ||
Cash flows used in financing activities | ||||
Proceeds from shares issued through exercised options | 9 | 47 | ||
Proceeds from issuing shares | 948 | - | ||
Proceeds from government grants | 49 | 367 | ||
Repurchase and cancellation of shares | (941) | (293) | ||
Dividends paid | (4,932) | (4,924) | ||
Repayment of long‑term debt | (229) | (250) | ||
Net cash used by continuing operations | (5,096) | (5,053) | ||
Net cash provided by discontinued operations | - | 1,297 | ||
Net cash used by financing | (5,096) | (3,756) | ||
Increase (decrease) in cash and cash equivalents during the year | 8,035 | (18,705) | ||
Effect of movements in exchange rates on cash held | (518) | - | ||
Cash and cash equivalents, beginning of year | 3,517 | 22,222 | ||
Cash and cash equivalents, end of year | $ | 11,034 | $ | 3,517 |
SOURCE Vecima Networks Inc.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/September2018/27/c5890.html
Please make the indicated changes including the new text: US quotes snapshot data provided by IEX. Additional price data and company information powered by Twelve Data.