|[November 14, 2018]
Spectra7 Announces Third Quarter 2018 Financial Results
(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 and nine months ended September 30, 2018. All
dollar amounts in this release are expressed in US dollars unless
otherwise stated. A copy of the unaudited interim consolidated financial
statements for the three and nine month periods ended September 30, 2018
and corresponding management's discussion and analysis will be available
under the Company's profile on www.sedar.com.
Q3 2018 Financial Results
Revenue for the quarter ended September 30, 2018 was approximately $1.1
million, representing an increase of approximately 30% from the prior
quarter. Data Center prototype revenue nearly doubled in the third
quarter of 2018 as compared to the prior quarter, while Spectra7
continues to enjoy a strong position in the virtual reality
("VR") and mixed reality ("MR") markets.
Gross margin1 as a percentage of revenue was approximately
50%, a decrease from 55% the prior quarter driven by a higher mix of
lower margin parts for older generation VR programs.
Non-IFRS expenses2 were approximately $2.5 million,
representing a decrease of approximately 11% from the prior quarter,
while IFRS operating expenses were approximately $3.5 million,
representing a decrease of approximately 3% from the prior quarter.
The continued sequential decline in Non-IFRS expenses is due primarily
to continued cost reductions and expense management.
Adjusted EBITDA3 loss was $1.7 million, which was a 19%
improvement from the $2.1 million EBITDA loss in the prior quarter.
"Our investment in Active Copper Cable solutions for the burgeoning Data
Center Interconnect market is starting to pay off as we expect
significant revenue growth in this current quarter," said Spectra7 CEO
Raouf Halim. "Additionally, we are seeing seasonal recovery in our core
VR business as we maintain our strong position in that market."
On July 6, 2018, the Company closed an oversubscribed private
placement consisting of 28,336,290 units at a price of CDN $0.105 per
unit for gross proceeds of approximately $2.3 million.
The Company experienced continued strong customer engagement including
9 new Data Center design-ins in the third quarter of 2018 for a total
of 36 Data Center design-ins to date.
The Company received multiple orders from cable partners for its first
Data Center deployments in China.
The Company announced a major Data Center partner, Zhaolong
Interconnect Technology Co., who is now offering data center cable
assemblies featuring Spectra7's embedded GaugeChangerTM
The Company announced a new HDMI 2.1 device to support Active Copper
Cables for connecting to enhanced 4K and emerging 8K displays.
Highlights Subsequent to Quarter End
On October 30, 2018, the Company closed an oversubscribed,
non-brokered private placement consisting of 32,412,228 units at a
price of CDN $0.15 per unit for gross proceeds of approximately CDN
On November 8, 2108, the Company announced a key partnership with
Molex (News - Alert), a major Data Center Interconnect supplier.
The Company has entered the fourth quarter of 2018 with its highest
starting backlog of 2018 and expects sequential revenue growth in the
fourth quarter of 2018. Currently, the Company has record Data Center
order backlog on the books to be shipped in the fourth 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.
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 in the fourth quarter of
2018, 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, 2017. 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 Additional GAAP Measure - Gross margin is presented in this
press release consistent with information presented in the Company's
financial statements. Gross margin has been calculated by deducting
manufacturing cost of sales, and provision for inventory write-downs
from revenue. Management of the Company believes that providing this
information allows investors to better understand the Company's
historical and future financial performance.
2 Non-IFRS expenses excludes stock-based compensation,
restructuring expenses, impairment expenses and other one-time expenses.
3 Non-GAAP Financial Measure - Adjusted EBITDA does not have
any standardized meaning prescribed by GAAP and is therefore unlikely to
be comparable to similar measures presented by other issuers. Adjusted
EBITDA is defined as net earnings before interest, taxes, other expense
(income), net, depreciation and amortization, including amortization of
intangibles, stock-based compensation, and acquisition and strategic
activities related costs. Management believes adjusted EBITDA and the
other non-GAAP and non-IFRS financial measures are important indicators
of the ongoing operations of Spectra7's business, provide an additional
metric for comparability between reporting periods and provide an
additional baseline for analyzing trends in Spectra7's operations.
Management believes these financial measures provide a view of the
Company's operations that excludes items that management believes are
not reflective of the Company's operating performance, such as items
traditionally removed from net earnings in the calculation of adjusted
EBITDA as well as other expense (income), net. As a result, these
non-GAAP measures are provided to supplement investors' overall
understanding of, and an enhanced level of transparency into, Spectra7's
financial performance. Adjusted EBITDA is not a calculation based on
GAAP, and, in measuring the Company's performance, should not be
considered as an alternative to net income/(loss), which is the most
directly comparable GAAP financial measure.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181114005254/en/
[ Back To Contact Center on Demand Homepage's Homepage ]