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Vecima Reports Strong First Quarter Fiscal 2022 Results, Q1 Sales Climb 19% Year-Over-Year to $32.4 Million
Wednesday, November 24, 2021Company Profile | Follow Company
Victoria, BC, November 24, 2021--(T-Net)--Vecima Networks Inc. (TSX: VCM) today reported financial results for the three months ended September 30, 2021.
Sumit Kumar, Chief Executive Officer, Vecima Networks Inc.
"Fiscal 2022 got off to a strong start with first quarter sales climbing 19% year-over-year to $32.4 million, even as we responded to continued supply chain challenges," said Sumit Kumar, Vecima's President and Chief Executive Officer. "Gross margin also strengthened to 48.5%, and our adjusted EBITDA performance of $4.3 million was nearly double what we achieved in Q1 last year."
"Our Video and Broadband Solutions segment led the growth with sales of $24.3 million climbing 80% year-over-year as several customers, including some of the world's largest Tier 1 operators, began and continued scale deployments of our Entra Distributed Access Architecture (DAA) solutions. Entra sales set a new quarterly record of $18.1 million, up 246% year-over-year and 9% quarter-over-quarter, continuing the growth trajectory from fiscal 2021. This was achieved despite significant logistics and freight hurdles experienced late in the quarter, with carriers failing to meet delivery commitments for scheduled and in-transit DAA shipments. While these are still early days for the vast new DAA market, the momentum and success of our industry-leading cable and fiber access portfolio is setting the stage for another year of rapid growth in the VBS segment."
"Our Video and Broadband Solutions segment further benefited from ongoing solid performance from our TerraceQAM product family, which contributed an additional $4.8 million to segment sales in the first quarter," added Mr. Kumar.
"Our Content Delivery and Storage segment experienced a significant quarterly sales fluctuation with some large orders delayed as a result of supply chain issues and pandemic-driven project delays affecting our customers' operations. Underlying demand for IPTV and our MediaScaleX solutions remains very strong and Content Delivery and Storage sales are expected to regain momentum subsequent to quarter-end."
"We ended the first quarter with $17.9 million in cash after investing an incremental $7.7 million in strategic inventory to mitigate supply chain challenges, working capital of $41.8 million, and virtually no debt, providing a very strong financial foundation to support the significant growth opportunities Vecima is pursuing," said Mr. Kumar.
BUSINESS HIGHLIGHTS
Video and Broadband Solutions (VBS)
Delivered strong segment sales growth with first quarter VBS revenue increasing 80% to $24.3 million, from $13.5 million in Q1 fiscal 2021
Content Delivery and Storage (CDS)
Telematics
"As our year progresses, we see a continued sharp growth trajectory for our Entra DAA solutions supported by a growing backlog of purchase orders and binding forecasts that are providing excellent visibility into heavy demand levels going forward. Vecima has emerged as one of the world's foremost providers of DAA network solutions worldwide and we expect to continue growing both our sales and our share of the large and rapidly growing distributed access market in fiscal 2022," said Mr. Kumar.
"In our Content Delivery and Storage segment, demand for our IPTV and open caching solutions remains very strong. On a full-year basis, we continue to anticipate sales growth from the segment in fiscal 2022."
"We reiterate our caution that the significant current global macro supply chain challenges could temper our growth and margin potential, particularly in the near term. However, the opportunities in both the DAA and IPTV markets are enormous and Vecima is exceptionally well-positioned to capitalize on them over an expected multi-year generational shift in the access network," concluded 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 December 20, 2021 to shareholders of record as at November 26, 2021.
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 first quarter of fiscal 2022.
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