Vecima Reports Q4 and Fiscal 2019 Results

  • 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, BC
– (September 26, 2019) – Vecima Networks Inc. (TSX:VCM) today reported financial results for the three and twelve month periods ended June 30, 2019.


FINANCIAL HIGHLIGHTS


 

“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

Investor Relations – 250-881-1982

invest@vecima.com