Spectra7 Announces First Quarter 2019 Financial Results
May 15 2019 - 5:05PM
Business Wire
Revenue up 56% Year-over-Year; Virtual
Reality Revenues Stabilized and Strong Momentum in Data Center
Market
(TSX:SEV) Spectra7 Microsystems Inc. (“Spectra7” or the
“Company”), a leading provider of high-performance analog
semiconductor products for broadband connectivity markets, today
announced its unaudited financial results for the three month
period ended March 31, 2019. A copy of the unaudited consolidated
financial statements prepared in accordance with International
Financial Reporting Standards and the corresponding management’s
discussion and analysis (“MD&A”) for the quarter ended March
31, 2019, can be found under the Company’s profile at
www.sedar.com. Unless otherwise indicated, all amounts in this
release are expressed in US dollars.
Q1 2019 Financial Summary
- Revenue was approximately $1.4 million,
nearly flat from the prior quarter and representing a 56% increase
over the same period in the prior year;
- Gross margin1 as a percentage of
revenue was 55%, an approximately 2% increase from the prior
quarter and flat from the same period in the prior year;
- Non-IFRS operating expenses were $2.8
million, representing a slight increase from $2.6 million in the
prior quarter and down approximately $0.4 million or 13% from the
same period in the prior year; and
- EBITDA2 loss of approximately $1.7
million compared to a loss of approximately $1.5 million in the
prior quarter and a $0.7 million improvement from the same period
in the prior year due to strong operating expense management.
CEO COMMENTARY
“I am pleased with our Q1 performance that we had pre-announced,
particularly given that the first quarter is seasonally a slow
quarter in our industry. We continue to drive strong design win
traction in the data center market while maintaining a majority
share of the tethered VR market with industry-leading OEMs,” said
Spectra7 CEO Raouf Halim. “We continue to anticipate the production
ramp of our data center active copper cable solutions in the second
half of the year with a major China hyperscale operator and believe
that we are track to achieve significant revenue growth.”
Quarterly Highlights
- Spectra7 continued to experience strong
traction with its data center solutions and announced ten new
customer design-ins in Q1 2019, for a total of 55 to date;
- A major China hyperscale data center
Operator is on track to deploy active copper cables enabled by
Spectra7 technology starting in the second half of 2019;
- A major Ethernet Switch OEM has chosen
to develop their own branded active copper cables with Spectra7
embedded integrated circuits for production shipments beginning
this year;
- The Company announced that it now has
key partnerships with 4 of the top 5 global cable data center
interconnect companies; and
- The Company showcased 25/100/200/400
Gbps data center interconnects at DesignCon and OFC in the first
quarter including demonstrations with leading system OEMs.
Capital Raise Update
The Company continues to evaluate various capital raise options,
including but not limited to, a loan based on its valuable patent
portfolio and is currently evaluating multiple term sheets for an
asset-based loan. The Company is looking to bolster its capital
structure to support the ramp of its innovative, low
power GaugeChanger™ active copper cable interconnect
technology for the growing hyperscale Data Center market and
expects to complete its capital raise by or before the end of the
second quarter.
ABOUT SPECTRA7 MICROSYSTEMS INC.
Spectra7 Microsystems Inc. is a high performance analog
semiconductor company delivering unprecedented bandwidth, speed and
resolution to enable disruptive industrial design for leading
electronics manufacturers in virtual reality, augmented reality,
mixed reality, data centers and other connectivity markets.
Spectra7 is based in San Jose, California with design centers in
Cork, Ireland and Little Rock, Arkansas. For more
information, please visit www.spectra7.com.
CAUTIONARY NOTES
Certain statements contained in this press release constitute
"forward-looking statements". All statements other than statements
of historical fact contained in this press release, including,
without limitation, those regarding the Company's future financial
position and results of operations, outlook, revenue growth,
revenue in the 2019 financial year, deployment of the Company’s
technology by its customers, timing of the Company’s capital
raising activities, strategy, proposed acquisitions, plans,
objectives, goals and targets, and any statements preceded by,
followed by or that include the words "believe", "expect", "aim",
"intend", "plan", "continue", "will", "may", "would", "anticipate",
"estimate", "forecast", "predict", "project", "seek", "should" or
similar expressions or the negative thereof, are forward-looking
statements. These statements are not historical facts but instead
represent only the Company's expectations, estimates and
projections regarding future events. These statements are not
guarantees of future performance and involve assumptions, risks and
uncertainties that are difficult to predict. Therefore, actual
results may differ materially from what is expressed, implied or
forecasted in such forward-looking statements. Additional factors
that could cause actual results, performance or achievements to
differ materially include, but are not limited to the risk factors
discussed in the Company's annual MD&A for the year ended
December 31, 2018. Management provides forward-looking statements
because it believes they provide useful information to investors
when considering their investment objectives and cautions investors
not to place undue reliance on forward-looking information.
Consequently, all of the forward-looking statements made in this
press release are qualified by these cautionary statements and
other cautionary statements or factors contained herein, and there
can be no assurance that the actual results or developments will be
realized or, even if substantially realized, that they will have
the expected consequences to, or effects on, the Company. These
forward-looking statements are made as of the date of this press
release and the Company assumes no obligation to update or revise
them to reflect subsequent information, events or circumstances or
otherwise, except as required by law.
1 Gross margin is a non-GAAP measure. Refer to “Revenue and
Gross Margin” in the Company’s annual MD&A for the year ended
December 31, 2018 for reconciliation to measures reported in the
Company’s financial statements.
2 EBITDA or earnings before interest, tax, depreciation, and
amortization is a non-GAAP measure. EBITDA excludes share-based
compensation, amortization, depreciation, interest, and tax
expenses.
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version on businesswire.com: https://www.businesswire.com/news/home/20190515005944/en/
For more information, please contact:
Spectra7 Microsystems Inc.Sean PeasgoodInvestor
Relations647-503-1034ir@spectra7.com
Spectra7 Microsystems Inc.Darren MaChief Financial
Officer669-284-3170pr@spectra7.com