- FY2019 Revenue - $85.0M, Gross
Margin - 53%, Cash Balance - $44.4M
- Secured first master purchase agreement covering Entra DAA
products with a Tier 1 MSO
- Broadened Entra engagements, lab trials and field trials
with widening set of cable operators globally
- Accelerated lead in emerging global IPTV market with
technology differentiation and capturing customers on the forefront
of modern IPTV rollouts
VICTORIA, Sept. 26, 2019 /CNW/ - Vecima Networks Inc.
(TSX:VCM) today reported financial results for the three and twelve
month periods ended June 30,
2019.
FINANCIAL HIGHLIGHTS
(Canadian
dollars in millions except percentages,
employees, and per share data)
|
Q4FY19
|
Q4FY18
|
|
FY2019
|
FY2018
|
Revenue
|
$20.7
|
$24.4
|
|
$85.0
|
$78.1
|
Gross
Margin
|
49%
|
55%
|
|
53%
|
54%
|
Net (Loss) /
Income
|
$(3.0)
|
$0.7
|
|
$(3.5)
|
$10.8
|
(Loss) / Earnings per
share1
|
$(0.13)
|
$0.03
|
|
$(0.15)
|
$0.48
|
Adjusted (Loss) /
Earnings per share1, 2, 3
|
$(0.08)
|
$0.04
|
|
$(0.09)
|
$0.17
|
Adjusted
EBITDA2
|
$0.3
|
$4.4
|
|
$8.2
|
$14.5
|
Cash and Short-term
Investments
|
$44.4
|
$57.7
|
|
$44.4
|
$57.7
|
Employees
|
364
|
419
|
|
364
|
419
|
1Based on weighted average
number shares outstanding
|
2Adjusted Earnings Per Share and
Adjusted EBITDA do 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 / (Loss) Per Share"
below.
|
3Starting in Q4 fiscal 2019, we
have changed our definition and calculation of Adjusted Earnings
Per Share. For a reconciliation of Adjusted
Earnings / (Loss) Per Share, investors should refer to Vecima's
Management's Discussion and Analysis for the fourth quarter of
fiscal 2019.
|
"Fiscal 2019 was a year of concerted moves and important
achievements as we broadly solidified our market position in
preparation for the most profound transitions unfolding in the
industry: DOCSIS Distributed Access Architecture (DAA) and
IPTV," said Sumit Kumar, Vecima
Networks' President and CEO.
"On the DAA front, we have now secured our first master purchase
agreement covering our Entra Remote PHY Nodes and Monitor products
with a Tier 1 operator entering field trials. Our DAA products are
also progressing successfully through lab trials with a diverse mix
of other Tier 1, Tier 2 and Tier 3 MSOs. These are important
milestones on the path to commercialization of our new Entra
technologies, and we anticipate deployments will initiate in fiscal
2020."
"In our Content Delivery and Storage segment, we continue to
make strides in the emerging global IPTV market. During fiscal
2019, we significantly advanced our industry-leading MediaScaleX™
platform and built and expanded customer relationships with some of
the world's largest MSOs. We believe our Content Delivery and
Storage segment has the potential for over 20% sales growth in
fiscal 2020 stemming from the pipeline of opportunities for
migration to IP video networks, including linear broadcast, cloud
DVR and time-shift TV."
"Vecima achieved revenues of $85.0
million in fiscal 2019, a 9% increase over last year as a
result of our acquisition of the Content Delivery and Storage
business. While financially, fiscal 2019 reflected the overall
transition of the business translating into a net loss of
$3.5 million, the results are
representative of a point in time for Vecima with DAA revenue yet
to come. Thanks to the strategic steps taken in fiscal 2019 to
tighten our R&D priorities, streamline our administrative
processes and manage our business and finances prudently, we are
moving into fiscal 2020 in a very strong financial position and
ready to embark on growth."
BUSINESS HIGHLIGHTS
Video and Broadband Solutions
- Neared commercial roll-out of Entra family of Distributed
Access Architecture products
-
- In various phases of lab and field trials with a total of 16
Tier 1, 2 & 3 operators in North
America, Central and Latin
America, Europe and
Asia
- Significantly broadened Entra products portfolio to include
Entra Remote PHY Monitor, which provides industry-leading service
assurance for DAA, and Entra video QAM manager, a solution that
allows service providers to maintain today's primary video services
within DAA architecture at the lowest cost in the industry
- Signed master purchase agreement covering Entra Remote PHY
nodes and Remote PHY Monitor with a Tier 1 MSO
- Market-leading Terrace family of commercial video platforms
enjoyed continued wide adoption among some of the world's largest
cable operators
-
- Supported a Tier 1 customer's MPEG-4 network expansion with the
TC600E
- Secured initial revenue with a leading European MSO for
next-generation Terrace DVB
Content Delivery and Storage
- Continued expansion into IPTV market with 17 operators now
using Vecima platforms to deliver IP video
-
- Expanded relationship with NOS, one of the largest
communications and entertainment groups in Europe, to deploy the MediaScaleX™
platform
- Secured agreements with two global resellers for transcoding
and storage solutions
- Partnered with one of the world's top five MSOs to use the
MediaScaleX™ platform to expand services to over 75% of its
footprint and more efficiently serve on-demand video across its
network of cable providers
- Total of six customers have deployed, or are in the process of
deploying, our cloud DVR solution
- On May 31, 2019, expanded
Vecima's end-to-end solutions capability by acquiring the assets of
Root6, a UK-based software and solutions company specializing in
the video ingest and delivery automation solutions used by some of
the world's leading content creators
Telematics
- Continued incremental growth in fleet management market
- Entered the movable assets market, securing initial customers
in the restoration segment of the construction industry
Mr. Kumar concluded, "Fiscal 2020 promises to be a significant
year for Vecima. We firmly believe we are one of the vendors best
able to take advantage of near-term opportunities in the DAA and
IPTV markets and we are sharply focused on supporting our
customers' deployment plans with highly differentiated, world-class
technologies."
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 1, 2019 to shareholders of record as at
October 11, 2019.
CONFERENCE CALL
A conference call and live audio webcast will be held today,
September 26, 2019 at 1 p.m. ET to discuss the Company's fourth quarter
and full year results. Vecima's audited annual consolidated
financial statements and management's discussion and analysis for
the three months and year ended June 30,
2019 are available under the Company's profile at
www.SEDAR.com, and at
https://vecima.com/investor-relations/financial-reports/
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/vecima20190926.html and
will be archived on the Vecima website
at https://vecima.com/investor-relations/earnings-call-archive/
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 fourth 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: Fiscal 2019 was a year
of concerted moves and important achievements as we broadly
solidified our market position in preparation for the most profound
transitions unfolding in the industry: DOCSIS Distributed Access
Architecture (DAA) and IPTV; Our DAA products are also progressing
successfully through lab trials with a diverse mix of other Tier 1,
Tier 2 and Tier 3 MSOs. These are important milestones on the path
to commercialization of our new Entra technologies, and we
anticipate deployments will initiate in fiscal 2020; In our Content
Delivery and Storage segment, we continue to make strides in the
emerging global IPTV market; During fiscal 2019, we significantly
advanced our industry-leading MediaScaleX™ platform and built and
expanded customer relationships with some of the world's largest
MSOs; We believe our Content Delivery and Storage segment has the
potential for over 20% sales growth in fiscal 2020 stemming from
the pipeline of opportunities for migration to IP video networks,
including linear broadcast, cloud DVR and time-shift TV; While
financially, fiscal 2019 reflected the overall transition of the
business translating into a net loss, the results are
representative of a point in time for Vecima with DAA revenue yet
to come; Thanks to the strategic steps taken in fiscal 2019 to
tighten our R&D priorities, streamline our administrative
processes and manage our business and finances prudently, we are
moving into fiscal 2020 in a very strong financial position and
ready to embark on growth; Fiscal 2020 promises to be a significant
year for Vecima; We firmly believe we are one of the vendors best
able to take advantage of near-term opportunities in the DAA and
IPTV markets and we are sharply focused on supporting our
customers' deployment plans with highly differentiated, world-class
technologies.
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.
Vecima Networks
Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
|
|
|
|
|
As at June
30,
|
|
2019
|
2018
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,834
|
$
|
11,034
|
Short‑term
investments
|
|
24,569
|
46,660
|
Accounts
receivable
|
|
15,154
|
18,047
|
Income tax
receivable
|
|
437
|
2,519
|
Inventories
|
|
12,724
|
15,020
|
Prepaid
expenses
|
|
2,235
|
1,608
|
Contract
assets
|
|
187
|
-
|
|
|
75,140
|
94,888
|
Non‑current
assets
|
|
|
|
Property, plant and
equipment
|
|
12,526
|
12,105
|
Goodwill
|
|
15,131
|
14,903
|
Intangible
assets
|
|
67,887
|
62,324
|
Other long‑term
assets
|
|
1,017
|
788
|
Investment tax
credits
|
|
24,355
|
22,692
|
Deferred tax
asset
|
|
4,714
|
2,339
|
|
|
$
|
200,770
|
$
|
210,039
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
11,699
|
$
|
12,151
|
Provisions
|
|
804
|
520
|
Income tax
payable
|
|
55
|
358
|
Deferred
revenue
|
|
4,046
|
4,206
|
Current portion of
long‑term debt
|
|
250
|
250
|
|
|
16,854
|
17,485
|
Non‑current
liabilities
|
|
|
|
Deferred
revenue
|
|
763
|
524
|
Provisions
|
|
332
|
352
|
Deferred tax
liability
|
|
324
|
414
|
Long‑term
debt
|
|
1,729
|
1,979
|
|
|
20,002
|
20,754
|
Shareholders'
equity
|
|
|
|
Share
capital
|
|
1,916
|
1,756
|
Reserves
|
|
4,104
|
4,041
|
Retained
earnings
|
|
173,738
|
182,411
|
Accumulated other
comprehensive income
|
|
1,010
|
1,077
|
|
|
180,768
|
189,285
|
|
|
$
|
200,770
|
$
|
210,039
|
Vecima Networks
Inc.
Consolidated Statements of Comprehensive (Loss) Income
(in thousands of Canadian dollars except net income per share
data)
|
|
Years ended June
30,
|
|
2019
|
2018
|
Sales
|
$
|
85,032
|
$
|
78,104
|
Cost of
sales
|
40,155
|
36,254
|
Gross
profit
|
44,877
|
41,850
|
Operating
expenses
|
|
|
Research and
development
|
18,973
|
15,101
|
Sales and
marketing
|
14,112
|
10,463
|
General and
administrative
|
16,596
|
13,248
|
Impairment of
intangible assets
|
-
|
22
|
Restructuring
costs
|
2,176
|
-
|
Share‑based
compensation
|
112
|
80
|
Other (income)
expense
|
(418)
|
(317)
|
|
51,551
|
38,597
|
Operating (loss)
income
|
(6,674)
|
3,253
|
Finance
income
|
879
|
1,132
|
Foreign exchange
(loss) gain
|
(66)
|
930
|
(Loss) income
before income taxes
|
(5,861)
|
5,315
|
Income tax (recovery)
expense
|
(2,402)
|
1,532
|
Net (loss) income
from continuing operations
|
(3,459)
|
3,783
|
Net income from
discontinued operations
|
-
|
7,019
|
Net (loss)
income
|
(3,459)
|
10,802
|
Other
comprehensive (loss) income
|
|
|
Item that may be
subsequently reclassed to net income
|
|
|
Exchange differences
on translating foreign operations
|
(67)
|
1,077
|
Comprehensive
(loss) income
|
$
|
(3,526)
|
$
|
11,879
|
Net (loss) income
per share
|
|
|
Continuing
operations
|
(0.15)
|
0.17
|
Discontinued
operations
|
-
|
0.31
|
Total basic net
(loss) income per share
|
$
|
(0.15)
|
$
|
0.48
|
Continuing
operations
|
(0.15)
|
0.17
|
Discontinued
operations
|
-
|
0.31
|
Total diluted net
(loss) income per share
|
$
|
(0.15)
|
$
|
0.48
|
Weighted average
number of common shares
|
|
|
Shares outstanding ‑
basic
|
22,362,031
|
22,414,944
|
Shares outstanding ‑
diluted
|
22,362,031
|
22,456,821
|
Vecima Networks
Inc.
Consolidated Statements of Changes in Equity
(in thousands of Canadian dollars)
|
|
|
Share
Capital
|
Reserves
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
|
Total
|
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)
|
Share repurchased and
cancelled
|
|
(8)
|
-
|
(933)
|
-
|
(941)
|
Shares issued by
exercising options
|
|
13
|
(4)
|
-
|
-
|
9
|
Shares issued in
exchange for
|
|
948
|
-
|
-
|
-
|
948
|
short‑term
investments
|
|
|
|
|
|
|
Share‑based payment
expense
|
|
-
|
80
|
-
|
-
|
80
|
Balance as at June
30, 2018
|
|
$
|
1,756
|
$
|
4,041
|
$
|
182,411
|
$
|
1,077
|
$
|
189,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at June
30, 2018
|
|
$
|
1,756
|
$
|
4,041
|
$
|
182,411
|
$
|
1,077
|
$
|
189,285
|
IFRS 15
transition
|
|
-
|
-
|
(102)
|
-
|
(102)
|
Adjusted balance at
June 30, 2018
|
|
1,756
|
4,041
|
182,309
|
1,077
|
189,183
|
Net loss
|
|
-
|
-
|
(3,459)
|
-
|
(3,459)
|
Other comprehensive
loss
|
|
-
|
-
|
-
|
(67)
|
(67)
|
Dividends
|
|
-
|
-
|
(4,920)
|
-
|
(4,920)
|
Share repurchased and
cancelled
|
|
(2)
|
-
|
(192)
|
-
|
(194)
|
Shares issued by
exercising options
|
|
162
|
(49)
|
-
|
-
|
113
|
Share‑based payment
expense
|
|
-
|
112
|
-
|
-
|
112
|
Balance as at June
30, 2019
|
|
$
|
1,916
|
$
|
4,104
|
$
|
173,738
|
$
|
1,010
|
$
|
180,768
|
Vecima Networks
Inc.
Consolidated Statements of Changes in Equity
(in thousands of Canadian dollars)
|
|
Years ended June
30,
|
|
2019
|
2018
|
Operating
activities
|
|
|
Net (loss) income
from continuing operations
|
$
|
(3,459)
|
$
|
3,783
|
Adjustments to
reconcile net (loss) income to cash
|
8,413
|
9,574
|
Decrease in other
long‑term assets
|
(10)
|
(13)
|
Increase (decrease)
in provisions
|
265
|
(214)
|
Increase in
investment tax credits
|
(67)
|
(238)
|
Net change in
non‑cash working capital relating to operations
|
3,672
|
7,506
|
Interest
paid
|
(98)
|
(92)
|
Interest
received
|
1,047
|
1,174
|
Income tax
received
|
2,413
|
-
|
Income tax
paid
|
(741)
|
(503)
|
Increase in long‑term
contract assets
|
7
|
-
|
Cash provided by
continuing operations
|
11,442
|
20,977
|
Cash provided by
discontinued operations
|
-
|
63
|
Cash provided by
operating activities
|
11,442
|
21,040
|
Investing
activities
|
|
|
Purchase of property,
plant and equipment
|
(2,868)
|
(1,816)
|
Proceeds from sale of
property, plant and equipment
|
25
|
80
|
Purchase of
short‑term investments
|
(2,007)
|
(54,434)
|
Proceeds on sale of
short‑term investments
|
24,098
|
93,449
|
Deferred development
costs
|
(16,057)
|
(16,407)
|
Purchase of
indefinite and finite‑life intangible assets
|
(86)
|
(134)
|
Business
acquisitions
|
(823)
|
(37,379)
|
Proceeds from the
sale of intangible assets
|
202
|
-
|
Cash provided by
(used in) continuing operations
|
2,484
|
(16,641)
|
Cash provided by
discontinued operations
|
-
|
8,732
|
Cash provided by
(used in) investing activities
|
2,484
|
(7,909)
|
Financing
activities
|
|
|
Proceeds from
government grants
|
221
|
49
|
Repurchase and
cancellation of shares
|
(194)
|
(941)
|
Repayment of
long‑term debt
|
(250)
|
(229)
|
Dividends
paid
|
(4,920)
|
(4,932)
|
Proceeds from shares
issued through exercised options
|
113
|
9
|
Proceeds from
issuance of share capital
|
-
|
948
|
Cash used by
financing activities
|
(5,030)
|
(5,096)
|
Increase in cash
and cash equivalents, net
|
8,896
|
8,035
|
Effect of change in
exchange rates on cash held
|
(96)
|
(518)
|
Cash and cash
equivalents, beginning of year
|
11,034
|
3,517
|
Cash and cash
equivalents, end of year
|
$
|
19,834
|
$
|
11,034
|
SOURCE Vecima Networks Inc.