Vecima Reports Q1 Fiscal 2024 Results
Vecima Networks Inc. (TSX: VCM) today reported financial results for the three months ended September 30, 2023.
"Vecima performed well in the first quarter as we achieved positive operating results and generated year-over-year revenue growth in our Content Delivery and Storage and Telematics segments, while weathering the anticipated temporary slowdown in Entra distributed access architecture (DAA) product deliveries," said Sumit Kumar, Vecima's President and Chief Executive Officer.
"As we noted in our fourth quarter report, we successfully managed major constraints in the supply chain during fiscal 2023 to fulfill strong DAA deliveries in support of our customers' ongoing major network upgrade projects. Correspondingly, customers have now temporarily shifted from building up their product pipelines to managing their DAA rollout logistics, expanding field deployment activity, and working through existing inventories. We anticipate renewed Entra sales growth in the second half of fiscal 2024 as customers bring inventories into balance while initiating new programs and deployments alike. These encompass additional DAA launches and project ramp-ups with key customers, including a major ERM3 rollout to support a Tier 1 customer's network evolution to 10G."
"In our Content Delivery and Storage segment, first quarter sales grew 43% to $15.7 million, reflecting both the growing base of customers for our IPTV solutions and expansions with a number of these customers during the period. Paired with strong gross margin performance of 58.5%, our CDS segment enjoyed an excellent start to fiscal 2024," added Mr. Kumar.
"Operationally, we continued to focus on tightly managing the business to achieve efficiently lower operating expenses while continuing to advance our technologies and industry leadership with robust R&D investment. We ended the first quarter in a strong financial position, with an unparalleled portfolio of next-generation solutions, a veritable war chest of customer program-aligned DAA product inventory, and a growing base of customers that are effecting a widescale migration to next-generation networks globally using our products. While the timing of our customers' rollouts may naturally vary, we see multiple pathways for growth coalescing as the year progresses and translating into the next wave of revenue momentum in the latter half of fiscal 2024," said Mr. Kumar.
Financial and Corporate
Video and Broadband Solutions (VBS)
The Video and Broadband Solutions segment contributed first quarter sales of $44.1 million, as compared to $61.0 million in Q1 fiscal 2023 and $57.0 million in Q4 fiscal 2023.
DAA (Entra Family)
Notable first quarter DAA achievements:
Achievements subsequent to the quarter-end:
Commercial Video (Terrace Family)
Content Delivery and Storage (CDS)
"Moving forward, Vecima's long-term outlook remains exceptionally compelling," added Mr. Kumar. "We are continuing to demonstrate the full deployment potential of our technologies as we support our customers' wide-scale network transformations and repeatedly break new ground in ultra-high-speed connectivity. We are advancing further from a global leadership position and remain highly confident in our ability to capture the major and multi-year opportunities in the large DAA and IPTV markets."
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, 2023 to shareholders of record as at November 24, 2023.
A conference call and live audio webcast will be held today, November 9, 2023 at 1 p.m. ET to discuss the Company's first quarter results. Vecima's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the three months ended September 30, 2023 are available under the Company's profile at www.sedarplus.ca, 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/vecima2024q1.html and will be archived on the Vecima website at https://vecima.com/investor-relations/earnings-call-archive/.
About Vecima Networks
Vecima Networks Inc. (TSX: VCM) is leading the global evolution to the multi-gigabit, content-rich networks of the future. Our talented people deliver future-ready software, services, and integrated platforms that power broadband and video streaming networks, monitor and manage transportation, and transform experiences in homes, businesses, and everywhere people connect. We help our customers evolve their networks with cloud-based solutions that deliver ground-breaking speed, superior video quality, and exciting new services to their subscribers. There is power in connectivity - it enables people, businesses, and communities to grow and thrive. Learn more at www.vecima.com.
Adjusted Gross Margin, Adjusted EBITDA, and Adjusted Earnings Per Share
Adjusted Gross Margin, 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 Gross Margin, 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 Gross Margin, Adjusted EBITDA, or Adjusted Earnings (Per Share, investors should refer to Vecima's Management's Discussion and Analysis for the first quarter of fiscal 2024.
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: Vecima performed well in the first quarter as we achieved positive operating results and generated year-over-year revenue growth in our Content Delivery and Storage and Telematics segments, while weathering the anticipated temporary slowdown in Entra distributed access architecture (DAA) product deliveries; we anticipate renewed Entra sales growth in the second half of fiscal 2024 as customers bring inventories into balance while initiating new programs and deployments alike; while the timing of our customers' rollouts may naturally vary, we see multiple pathways for growth coalescing as the year progresses and translating into the next wave of revenue momentum in the latter half of fiscal 2024; moving forward, Vecima's long-term outlook remains exceptionally compelling; we are advancing further from a global leadership position and remain highly confident in our ability to capture the major and multi-year opportunities in the large DAA and IPTV markets.
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 21, 2023, as well as the Company's continuous disclosure filings with Canadian securities regulatory authorities available at www.sedarplus.ca. 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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