Vecima Reports Q2 Fiscal 2019 Results

Revenue – $22.7M, Gross Margin – 56.7%, EPS – $0.09, Adj. EBITDA – $5.5M

Record Quarter for Content Delivery and Storage Segment

Significant increase in global activity and customer engagement with Entra

VICTORIA – (February 7, 2019) – Vecima Networks Inc. (TSX:VCM), an experienced designer and manufacturer of innovative technology solutions, today reported financial results for the three and six months ended December 31, 2018.

FINANCIAL HIGHLIGHTS

“We achieved record results in our Content Delivery and Storage segment during the second quarter, while continuing to invest in differentiated technology solutions that position Vecima at the forefront of the large global markets we serve,” said Sumit Kumar, Vecima Networks’ President and CEO.

“Vecima is capitalizing on the continued build-up in the emerging IPTV market, which supports leading-edge services like time-shift TV, streaming and Cloud DVR using our innovative platforms. Our IPTV deployments continued to expand in Q2, and we see an expansive pipeline of future opportunities in the U.S., European, Latin America, and Asia-Pacific markets as the industry begins the broader transition to IPTV.”

As anticipated, Content Delivery and Storage revenues in the second quarter were also bolstered by timing changes that delayed orders in Q1. Overall demand for our MediaScaleX™ platforms continued to grow.

“In our Video and Broadband segment, we made further strides in development of our Entra family of products which addresses the industry evolution to DOCSIS 3.1 distributed access architecture (DAA). We are now in lab trials with multiple MSOs, including Tier 1, 2 and 3 operators, and while the broader industry operationalization of DAA is widely acknowledged to be progressing slowly, we are on track for field trials in calendar 2019,” added Mr. Kumar.

BUSINESS HIGHLIGHTS

Video and Broadband Solutions

• Progressing through lab trials with multiple MSOs
• Initiated lab trials for Entra Remote PHY Node with a European Tier 1 MSO
• On track to move to DAA field trials in calendar 2019

Content Delivery and Storage

• Achieved record quarter with revenues of $14.3 million
• MediaScaleX//Storage™ revenues hit all-time high, signifying the differentiation of Vecima’s object storage technology in media-intensive environments, such as Cloud DVR and time shift
• Further expansion into accelerating IPTV market with another MSO, bringing to nine, the number of operators using Vecima platforms for core IPTV video services

Telematics

• Following shortly after the Q4FY18 contract win with City of Victoria, selected by another major Western Canadian municipality for deployment related to winter and summer equipment fleets
• Achieved initial revenue contribution from newly released Nero Equipment Tracking product which targets the asset tracking market and augments Vecima’s fleet management business

Added Mr. Kumar, “Going forward, demand for gigabit internet and IPTV is creating vast new markets for Vecima. We intend to continue to invest in our leading technologies and capitalize on the strong differentiation of our products as these wide-reaching network evolutions roll out.”

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 March 18, 2019 to shareholders of record as at February 22, 2019.

CONFERENCE CALL

A conference call and live audio webcast will be held today, February 7, 2019 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 and six months ended December 31, 2018 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/vecima20190207.html and will be archived on the Vecima website at www.vecima.com/shareholder-events.