Vecima Provides Business Update
VICTORIA – (July 27, 2017) – Vecima Networks Inc. (TSX:VCM), an experienced designer and manufacturer of innovative network technology solutions, today provided a business update including preliminary information on its fiscal 2017 financial performance and updates on ongoing product development and launches.
Based on preliminary financial information for the fiscal year ended June 30, 2017, Vecima expects its fiscal year 2017 revenue to be within its previously guided revenue range of $70.0 million to $72.0 million. Vecima remained on target despite revenue expectations being based on customer acceptance of a new product upgrade that did not occur, instead achieving higher than forecasted sales in other products. The Company expects that the upgrade acceptance will now occur early in fiscal 2018.
Vecima also expects to report a cash balance at June 30, 2017 of approximately $89.0 million, a $14.9 million increase over 2016.
The Company is also reporting that, subsequent to June 30, it completed the second closing of the sale of its YourLink business in Saskatchewan for proceeds of $8.73 million. This sale marks the conclusion of the divestiture of the YourLink business for total proceeds of $28.73 million.
Product Development and Launches
In June 2017, Vecima launched its Terrace DVB Commercial Video Gateway for the international market at ANGA COM 2017 in Cologne, Germany. A product line extension of the successful Terrace QAM platform, Terrace DVB was developed for markets outside of North America, giving global cable operators the flexibility to adapt to emerging technologies while providing compelling services in hospitality. The first lab trial for the Terrace DVB platform is now underway at a large European MSO.
Vecima continues to make excellent progress on its Entra family of products for the cable industry’s evolution to DOCSIS 3.1 distributed access. In the third quarter, Vecima’s first Entra Remote MACPHY Distributed Access Node was shipped for customer lab testing while the Entra 10Gb Access Switch was launched at ANGA COM 2017. Vecima is pleased to report it has made rapid progress on its new DOCSIS Remote PHY Distributed Access Node and that interoperability testing is now underway for that major opportunity. Remote PHY is Vecima’s third major platform in the Entra Distributed Access family.
As anticipated, however, the timing of major MSO customers’ transition to the new network architecture has been subject to changes due to their evolving plans and priorities. Most recently, a significant number of MSOs have encountered delays as they work to plan and implement lab and field trials for the major cycle of network infrastructure replacement to take place for DOCSIS 3.1 distributed access architecture. As a result, Vecima now anticipates field trials of various components of the Entra family will commence in calendar year 2018.
Vecima continues to make significant progress in development of and customer engagement for a compelling suite of platforms that widely address distributed access architecture, and trials are expected to initiate corresponding to customer readiness.
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, NERO Global, and FleetLynx brands. More information is available at our website at www.vecima.com.
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.
In connection with the forward-looking information contained in this news release, Vecima has made numerous assumptions, regarding, among other things: we will continue to pay dividends; that MSOs continue to upgrade to all-digital networks; that Vecima is able to continue its relationships with its few large customers; we are able to develop new products for customers; competition that serves the same market(s) will not have an adverse effect on the business; we are able to adapt to technological changes – designing to new standards and competing with new products; third party contractors are able to deliver on time and budget; we will be able to deliver based on the terms of our key contracts; currency fluctuations do not adversely affect Vecima; larger cable operator budgets are not static; suppliers will provide parts in a timely fashion; Vecima manages its business and its growth successfully; Vecima does not experience production capacity constraints; and the rationalization of operations could cause our operating results to fluctuate. While Vecima considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Vecima’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: future quarterly dividends will be subject to approval of the Board of Directors; Vecima derives a substantial part of its revenue from a few large customers; Vecima may be unable to deliver products associated with key contracts; failure to manage Vecima’s business or its growth successfully may adversely affect its operating results; if Vecima cannot meet customers’ requirements for manufacturing capacity, sales may suffer; our inability to adapt to technological change, new products and standards could harm our business; if Vecima is required to change its pricing models to compete successfully, Vecima’s margins and operating results may be adversely affected; competition from new or existing technologies may adversely affect Vecima’s business; Vecima’s reliance on third-party suppliers and contract manufacturers reduces its control over its performance; currency fluctuations may adversely affect Vecima; the budgeting cycles of larger cable operators can also result in quarter-to-quarter variability in customer orders, while availability of parts and production capacity can influence the timing of product deliveries; and our operating results are expected to fluctuate.
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, 2016, 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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Vecima Networks Inc.
771 Vanalman Avenue, Victoria, BC V8Z-3B8. Canada
Phone: (250) 881-1982 Fax: (250) 881-1974