Vecima Reports Q1 Fiscal 2018 Results

Revenue – $14.9M, Gross Margin – 57%, EPS – $0.36

Cash balances reach $103.2M

Significant progress on Entra DOCSIS 3.1 platform

VICTORIA – (November 9, 2017) – Vecima Networks Inc. (TSX:VCM), an experienced designer and manufacturer of innovative technology in the broadband equipment market, today reported financial results for the three months ended September 30, 2017.

FINANCIAL HIGHLIGHTS

FY18Q1 Financial Highlights

BUSINESS HIGHLIGHTS

  • Entra Developments:
    • Demonstrated Entra Remote PHY node interoperability at industry events with the top two converged cable access platform (CCAP) vendors
    • Delivered Entra Legacy QAM Adapter solution into customer labs for evaluation
    • Subsequent to the quarter end, Entra Access Switch, Entra Distributed Access Platform and Terrace DVB Commercial Video Gateway received top industry recognition in BTR’s (Broadband Technology Report) 2017 Diamond Technology Reviews
  • Began sales of the Digital Video Access Platform (DVAP) software upgrade enabling platform to support distributed access architecture
  • Completed the sale of YourLink’s Saskatchewan assets for proceeds of $8.7 million
  • Declared a quarterly dividend of $0.055 per share
  • Subsequent to quarter end, Vecima signed an asset purchase agreement to acquire the video and content delivery business of Concurrent Computer Corporation (“Concurrent”), a US- based software and solutions company operating in the Video on Demand and IP Video Content Delivery, for US$29.0 million in cash subject to certain closing adjustments relating to working capital.

“Fiscal 2018 is off to a productive start with excellent progress on our Entra DOCSIS 3.1 distributed access architecture solution,” said Sumit Kumar, Vecima Networks’ President and CEO. “Significant recent milestones included successfully demonstrating the interoperability of our Entra Remote-PHY Distributed Access node, this after having the product shortlisted by a Tier 1 MSO customer as part of a major RFP. We are also excited to see the continued validation of our solutions by the industry, including the recognition of Entra last month by BTR Diamond Technology Reviews. The judges described the Entra platform as a ‘game changer’ that leads the way towards a software-defined future by improving flexibility and ultimately lowering the total cost of ownership.”

“We made a strategic move to acquire Concurrent’s video and content delivery business that will further enhance Vecima’s growth opportunities. The future of our industry is tied to two rapidly growing technologies that feed off each other – gigabit broadband internet together with IP video. Adding Concurrent’s talent and leading IPTV technology to Vecima’s strong team and powerful portfolio of gigabit broadband platforms ideally positions us to thrive collectively by serving the industry with an end-to-end, massively scalable video and data solution.”

“Financially, we achieved revenues of $14.9 million and Adjusted EBITDA of $2.9 million, which were in line with our expectations for the first quarter of this 2018 transition year. With receipt of the final proceeds from the YourLink Saskatchewan sale, we closed the first quarter with cash balances of $103.2 million, which is available to fund continued development and future acquisitions,” 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 December 18, 2017 to shareholders of record as at November 24, 2017.

OUTLOOK FOR FISCAL 2018

Vecima anticipates a year of transition as the North American cable industry prepares for the DOCSIS 3.1 standard. Based on current customer feedback, field trials of various components of Vecima’s new Entra family of DOCSIS 3.1 products are expected to commence in calendar year 2018. Management notes, however, that the plans and priorities of major MSOs continue to evolve, making it difficult to project timelines with certainty.

Demand for some of Vecima’s legacy products is expected to taper off as market saturation is reached and customers focus on next generation products and technologies. Management expects fiscal 2018 to be a year of continued investment and development as it positions Vecima for industry leadership in the emerging DOCSIS 3.1 market and the IP video and content delivery space.

With a strong financial foundation, Vecima is well positioned to pursue its product strategies while also continuing to assess attractive acquisitions that provide significant accretion and give rapid access to technologies that will help drive the Company’s growth and success.

CONFERENCE CALL

A conference call and live audio webcast will be held today, November 9, 2017 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 months ended September 30, 2017 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 services.choruscall.ca/links/vecima20171109.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 also provides fleet managers the key information and analytics they require to optimally manage their business under the Contigo, NEROglobal, 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 first 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. Forward-looking information in this news release include the following statements: Fiscal 2018 is off to a productive start with excellent progress on Entra; Vecima sees the continued validation of our solutions by the industry; Vecima leads the way towards a software-defined future; DVAP software upgrade enables platform to support distributed access architecture; Vecima’s asset purchase agreement to acquire the video and content delivery business of Concurrent is subject to certain closing adjustments relating to working capital; Vecima’s strategic move to acquire Concurrent will further enhance growth opportunities; the future of our industry is tied to two rapidly growing technologies – gigabit broadband internet and IP video; adding Concurrent’s talent and leading IPTV technology to Vecima’s strong team and powerful portfolio of gigabit broadband platforms ideally positions us to thrive collectively by serving the industry with an end-to-end, massively scalable video and data solution; we have cash balances available to fund continued development and future acquisitions; the dividend payable on December 18, 2017 to shareholders of record as at November 24, 2017; Vecima anticipates a year of transition in fiscal 2018 as the North American cable industry prepares for the DOCSIS 3.1 standard; based on current customer feedback, field trials of various components of Vecima’s new Entra family of DOCSIS 3.1 products are expected to commence in calendar year 2018; management notes that the plans and priorities of major MSOs continue to evolve, making it difficult to project timelines with certainty; demand for some of Vecima’s legacy products is expected to taper off as market saturation is reached and customers focus on next generation products and technologies; management expects fiscal 2018 to be a year of continued investment and development as it positions Vecima for industry leadership in the emerging DOCSIS 3.1 market and IP video and content delivery space; Vecima is well positioned to pursue its product strategies, while also continuing to assess attractive acquisitions that provide significant accretion and give rapid access to technologies that will help drive the Company’s growth and success.

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 25, 2017, 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
Tel: 250-881-1982
Email:

FY18Q1 IFRS Statement Appendix