Welcome!

News Feed Item

Spectra7 Announces Financial Results for the Fifteen Month Period Ended December 31, 2013

Strong Year over Year Revenue Growth and Increasing Product Gross Margins

TORONTO, ONTARIO and PALO ALTO, CALIFORNIA -- (Marketwired) -- 04/23/14 -- Spectra7 Microsystems Inc. ("Spectra7" or the "Company") (TSX VENTURE: SEV), a high performance analog semiconductor company delivering unprecedented speed, resolution and signal fidelity to consumer and wireless infrastructure products, today announced its audited financial results for the fifteen month period ended December 31, 2013. A copy of the audited consolidated financial statements for the fifteen month period ended December 31, 2013 prepared in accordance with International Financial Reporting Standards and the corresponding Management's Discussion and Analysis will be available under the Company's profile on www.sedar.com. All amounts are in US dollars unless otherwise noted.

2013 Highlights


--  Revenue increased 45% for the 12 months ended December 31, 2013 to $3.0
    million compared to $2.1 million for the 12 months ended December 31,
    2012.
--  Revenue increased 61% for the quarter ended December 31, 2013 to $1.0
    million compared to $0.6 million for the prior quarter ended September
    30, 2013.
--  Product gross margins(1) were strong at 80% for the quarter ended
    December 31, 2013 and 71% for the 12 months ended December 31, 2013.
--  Announcement of five new products during the year ended December 31,
    2013.
--  Equity financings of $8.8 million to accelerate product development.

"The Company is now delivering on its vision to develop, launch and command value for best-in-class products across multiple high growth segments," said Tony Stelliga, CEO of Spectra7. "Our latest products are being adopted by market leaders in UltraHD displays, consumer interconnects and wearable computing as we showcase their extensive capabilities and consumer benefits. The year ended December 31, 2013 included a major acquisition, with the successful consolidation and streamlining of operations and costs. Shortly after the year end, the Company closed an upsized CDN$7.0 million public offering to further accelerate the roll-out of these new products."

Financial Summary

Following completion of the Company's previously disclosed qualifying transaction (the "Qualifying Transaction"), the Company changed its financial year end from September 30 to December 31 which resulted in a 15 month period (October 1, 2012 to December 31, 2013) for its first reporting period.

Since completing the Qualifying Transaction, the Company has made significant progress with respect to capital, products and customers. Re-affirming preliminary financial results announced on January 24, 2014 for the fifteen month period ended December 31, 2013, the Company had revenue of $3.1 million. For the three month period ended December 31, 2013, the Company exceeded previously disclosed results with revenue of $1.0 million, an increase of 61% over the prior quarter ended September 30, 2013 and exceeded revenue for the same quarter of the previous year by almost nine fold.

Product gross margins(1) for the three month period ended December 31, 2013 were 80%, above the preliminary results previously announced, due to product mix consisting of higher margin products. Product margins continue this trend, which started in the three months ended March 31, 2013, resulting in product gross margins(1) for the twelve month period ended December 31, 2013 of 71% compared to 67% for the twelve months ended December 31, 2012.

On March 28, 2014, the Company announced it had closed a public offering of 23,333,333 units for gross proceeds of CDN$7.0 million. The Company intends to use the proceeds from the offering as disclosed in the final prospectus dated March 24, 2014.

Results for the fifteen month period ended December 31, 2013 includes RedMere from the date of acquisition, February 5, 2013. Results prior to February 5, 2013 include Fresco results only.


                                              Fifteen Month
                                               Period Ended      Year ended
                                                December 31    September 30
                                                       2013            2012
                                                       $000            $000
                                            --------------------------------
Revenue                                               3,100           3,495
Cost of Sales                                         1,153           1,867
Gross Margin                                          1,948           1,627

Expenses                                             14,590           8,854
Other expense                                         5,445           4,591

Net loss                                            (18,087)        (11,818)

The Company believes that the most meaningful presentation of the financial results is to discuss the results based on the new year-end for twelve months ended December 31.

The following table outlines key financial information for the twelve month period ended December 31, 2013 and 2012 and the three month period ended December 31, and September 30, 2013.


                     Twelve    Twelve              Three     Three
                     months    months             months    months
                      ended     ended              ended     ended
                   December  December           December September
                         31        31                 31        30
                       2013      2012  Percent      2013      2013  Percent
                       $000      $000   Change      $000      $000   Change
                  ----------------------------------------------------------
Product Revenue       2,662     1,796       48%      643       613        5%
License IP Revenue      346       278                346         -
                  ----------------------------------------------------------
Total Revenue         3,008     2,074       45%      989       613       61%

Product Cost            880       690       28%      200       193        4%
Inventory
 Provision              186       279      -33%      173         -
                  ----------------------------------------------------------
Total Cost of
 Sales                1,066       969       10%      373       193       93%
Gross Margin          1,942     1,105       43%      616       420       47%

Product Gross
 Margin %                71%       67%       4%       80%       69%      11%

Total Gross Margin
 %                       65%       53%      11%       62%       69%      -6%

Expenses             10,509     7,246       31%    2,492     2,773      -10%
Amortization of
 intangibles other
 than licenses        2,726                        2,726
Other expense         4,471     4,463        0%      393       856      -54%
Net loss            (15,764)  (10,604)            (4,995)   (3,209)

Revenue

Revenue for the twelve months ended December 31, 2013 was $3.0 million compared to $2.1 million for the year ended December 31, 2012, an increase of 45% year over year. The Company experienced strong demand for its active cable signal processing technology which is used by market leading customers to design, develop and launch next-generation interconnects for HD displays, wearable computing and second screen viewing.

Revenue for the quarter ended December 31, 2013 was $1.0 million, an increase of 61% over the previous quarter. There was strong interest for the Company's broader analog IP technology from major system on chip companies which contributed to the revenue increase in the quarter.

Gross Margins

Product gross margins(1) improved year over year from 67% in 2012 to 71% in 2013 reflecting the

Company's strategy to modify traditional distribution channel modes and focus on higher margin products.

Product gross margins(1) represent revenue less the direct costs of manufacturing including yield loss and freight costs. Total gross margin represents product gross margin less a provision to write-down surplus, obsolete, or on-hand inventory to its recoverable amount which was done for demodulators, tuner and cable components. The Company does not expect further significant provisions in the foreseeable future.

Expenses

Expenses increased year over year by 31% as a result of certain one-time expenses relating to the completion of the Qualifying Transaction and opening of the Company's office in Silicon Valley.

For the quarter ended December 31, 2013, expenses were 10% lower than the previous quarter as a result of cost control programs to reduce variable expenses such as travel.

For a complete discussion of expenses please refer to the financial statements and management's discussion and analysis.

Product and Customer Development

During the quarter ended December 31, 2013, the Company announced the VR7100 chip which delivers the speed and low latency to enable new levels and lengths of ultra-light and wearable connectivity between virtual reality ("VR") headsets and compute cluster or gaming machine. The VR7100 seeks to address the bulk and weight of previous VR platforms.

On September 24, 2013, the Company announced CouchConnect™, a portable, five meter / 16 foot, plug'n'play, ultra-light and ultra-long active HDMI cable capable of delivering true, real-time 1080p HD or 4K UltraHD content from any mobile device to any large screen display. On January 7, 2014, the Company announced that CouchConnect™ would be sold on Walmart.com. In March 2014, the Company announced that it had expanded its retailer presence with the availability of CouchConnect™ on Newegg.com.

On January 7, 2014, the Company unveiled its Detectiv4K™ integrated audio/video performance monitoring technology and announced that Detectiv4K™ was now embedded in Monster® Cable's Black Platinum® cable, adding to the existing use of the Company's home theatre technology in Monster's Core Power® and MSeries® cable lines.

ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high performance analog semiconductor company delivering unprecedented speed, resolution and signal fidelity to consumer and wireless infrastructure products. Spectra7's new system-level components address throughput bottlenecks and satisfy the exponential demand for more bandwidth and lower costs in mobile and internet infrastructure equipment, including handsets, tablets, base stations and microwave backhaul systems. Spectra7 is headquartered in Markham, Ontario with development centers in Silicon Valley, Irvine, California and Cork, Ireland. For more information, please visit www.spectra7.com.

ADDITIONAL GAAP MEASURES

Gross margin is an additional GAAP measure. Gross margin is presented in this press release as additional information regarding the Company's financial performance. The Company's method of calculating gross margin may differ from other methods used. Gross margin has been calculated by deducting manufacturing cost of sales from revenue excluding any provision for inventory write- downs. Gross margin helps the Company to plan and forecast for future periods as well as being a close proximity to cash. Management of the Company believes that providing this information, in addition to IFRS measures, allows investors to see the Company's results through the eyes of management, and to better understand its historical and future financial performance.

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, 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, 2013. 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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

(1) Gross margin is an additional GAAP measure. See "Additional GAAP Measures".

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound...
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
In the rush to compete in the digital age, a successful digital transformation is essential, but many organizations are setting themselves up for failure. There’s a common misconception that the process is just about technology, but it’s not. It’s about your business. It shouldn’t be treated as an isolated IT project; it should be driven by business needs with the committed involvement of a range of stakeholders.
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.