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Vecima Reports Q3 Fiscal 2020 Results and Provides Business Update, Sales Revenue and Earnings Rise Sharply (Sales up 23.5% year-over-year)
Friday, May 15, 2020Company Profile | Follow Company
Victoria, BC, May 15, 2020--(T-Net)--Vecima Networks Inc. (TSX:VCM) today reported financial results for the three and nine months ended March 31, 2020 and provided a COVID-19 business update.
FINANCIAL HIGHLIGHTS
Navigating COVID-19
"We delivered a very strong quarter while navigating the COVID-19 pandemic, and I want to thank all of our employees for helping us to fulfill our essential role in the telecommunications supply chain through these unprecedented times," said Sumit Kumar, Vecima Network's President and CEO.
"Around the globe, social distancing and stay-at-home mandates related to the COVID-19 situation are driving incredible utilization across our customers' cable and IPTV networks. This, in turn, has driven increased need for the solutions we provide to bring additional capacity to our customers' networks. We have quickly adapted our ways of doing business so that we can protect the health and safety of our teams while responding to this growing demand."
"More than 80% of our workforce is now working from home, and we have implemented strict practices and protocols for the small number of employees whose presence is required on site to perform their job functions. This includes social distancing, increased cleaning and availability of personal protective equipment where it is required. Our employees have continued to do exceptional work amidst these changes and we are deeply proud of the entire Vecima team," said Mr. Kumar.
Third Quarter Financial Performance
Third quarter 2020 results reflect the accelerating demand for Vecima's solutions. Consolidated sales grew 23.5% year-over-year, led by the Content Delivery and Storage Segment where new customer wins and significant demand for the Company's MediaScaleXTM solutions resulted in a 119% year-over-year increase in segment sales. Vecima remains on track to deliver 20% or better growth in Content Delivery and Storage sales in fiscal 2020.
In the Video and Broadband Solutions segment, Vecima's next generation Entra family of products continued to gain momentum with sales growing to $1.8 million, led by orders for the Entra Interactive Video Controller (IVC) and also reflecting purchases of Vecima's broader portfolio of Entra distributed access architecture (DAA) products by a diverse group of MSOs. While demand for legacy products in this segment is generally tailing off as customers move to next-generation platforms, sales of Terrace and TerraceQAM hospitality industry products were solid through the third quarter.
"The robust demand for our products and platforms not only helped us generate $25.1 million of revenues during the third quarter, but also contributed to improved bottom-line performance," added Mr. Kumar. "Adjusted EBITDA grew to $5.6 million, from $0.4 million in the same period last year, and we increased earnings per share to $0.03 from a loss of $0.07 in Q3 fiscal 2019. We also ended the quarter in a very strong financial position with $36.2 million in cash and working capital of $56.3 million," said Mr. Kumar.
Q3FY20 BUSINESS HIGHLIGHTS
Video and Broadband Solutions
Content Delivery and Storage
Telematics
"As we enter the fourth quarter, the industry's overall plan of record to move to DAA and IPTV, together with the current climate of unprecedented consumer demands on networks, are translating into opportunities aligned with Vecima's strategic product offerings. Working with our blue-chip customers, we are progressing field and lab trials of our next generation family of Entra and MediaScaleX products to respond," added Mr. Kumar.
"Longer term it is difficult to predict what the full economic, supply chain and network development impacts of the COVID-19 pandemic will be given the evolving and uncertain nature of this crisis. However, with product offerings that respond to essential communication needs and our very strong financial position, we believe we are well positioned to manage the challenges of the COVID-19 business environment in the months ahead."
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 15, 2020 to shareholders of record as at May 22, 2020.
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 Earnings / (Loss) Per Share
Adjusted EBITDA and Adjusted Earnings / (Loss) 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 / (Loss) 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 / (Loss) Per Share, investors should refer to Vecima's Management's Discussion and Analysis for the third quarter of fiscal 2020.
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 delivered a very strong quarter while navigating the COVID-19 pandemic; around the globe, social distancing and stay-at-home mandates related to the COVID-19 situation are driving incredible utilization across our customers' cable and IPTV networks; this, in turn, has driven increased need for the solutions we provide to bring additional capacity to our customers' networks; third quarter 2020 results reflect the accelerating demand for Vecima's solutions; Vecima remains on track to deliver 20% or better growth in Content Delivery and Storage sales in fiscal 2020; Vecima's next generation Entra family of products continued to gain momentum; demand for legacy products in this segment is generally tailing off as customers move to next-generation platforms; the industry's overall plan of record to move to DAA and IPTV, together with the current climate of unprecedented consumer demands on networks, are translating into opportunities aligned with Vecima's strategic product offerings; working with our blue-chip customers, we are progressing field and lab trials of our next generation family of Entra and MediaScaleX products to respond; longer term it is difficult to predict what the full economic, supply chain and network development impacts of the COVID-19 pandemic will be given the evolving and uncertain nature of this crisis; with product offerings that respond to essential communication needs and our very strong financial position, we believe we are well positioned to manage the challenges of the COVID-19 business environment in the months ahead.
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 26, 2019, 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.
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