Click here to close now.


News Feed Item

Spectra7 Announces Financial Results for Three Month Period Ended March 31, 2014

Gross Margins Increase to 76%

TORONTO, ONTARIO -- (Marketwired) -- 05/29/14 -- 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 unaudited financial results for the three month period ended March 31, 2014 ("Q1"). A copy of the unaudited condensed interim consolidated financial statements for the three month period ended March 31, 2014 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 All amounts are in US dollars unless otherwise noted.

Q1 Highlights

--  Revenue for the quarter ended March 31, 2014 was $0.9 million, an
    increase of more than three times the revenue in the same quarter of
--  Revenue from the Company's interconnect products increased 30% for the
    quarter ended March 31, 2014 to $0.8 million compared to $0.6 million
    for the quarter ended December 31, 2013. 
--  Overall gross margins as a percent of revenue increased to 76% for the
    quarter ended March 31, 2014, compared to 63% for the quarter ended
    December 31, 2013 and 42% for the three month ended March 31, 2013. 
--  Gross margins for the Company's interconnect products increased to 75%
    for the quarter ended March 31, 2014, compared to 74% for the quarter
    ended December 31, 2013 and from 70% for the quarter ended March 31,
    2013. The introduction of new products and retail channel strategies
    continues to contribute to the Company's strong gross margin trend. 
--  Significant progress made in expanding the Company's retail channel for
    CouchConnect(TM) with the addition of and
    authorized retailers shipping CouchConnect(TM) across the United States.
--  Completed equity public offering of over CDN$7 million to accelerate
    product development. 

"The Company has achieved significant milestones this quarter. We believe that the unique value premise of our technology and products resonates well with our customers, investors and partners as we expand our footprint into segments requiring high bandwidth, ultra-thin and low latency connections from "wearable" visual displays to next-generation wall-mounted 4K UltraHD panels," said Tony Stelliga, CEO of Spectra7. "Our recent equity fundraising will help accelerate new product development to meet the broadening demand for this unique capability."

Financial Summary

For the three month period ended March 31, 2014, the revenue remained strong at $0.9 million, over three times the revenue in the same quarter in the previous year.

Gross margins for the three month period ended March 31, 2014 were $0.7 million which was 5% higher than the previous quarter. Gross margin percent improved from 63% in the previous quarter to 76% in the current quarter.

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. On April 28, 2014, the Company issued an additional 3,500,000 units pursuant to the exercise in full of the agent's over-allotment option at a price of CDN$0.30 for a gross proceeds of CDN$1,050,000. The Company intends to use the proceeds from the offering as disclosed in the final prospectus dated March 24, 2014.

The following table is a summary of the financial information presented in the financial statements.

                                                 Three months               
                                  Three months          ended               
                                         ended   December 31,               
                                March 31, 2014           2013               
                                   (unaudited)    (unaudited) Percent Change
$000                                         $              $     Q1 over Q4
Wireless                                   102            404           -75%
Interconnect                               759            585            30%
Revenue                                    861            989           -13%
Product Gross Margin %                                                      
Wireless                                   79%            88%            -9%
Interconnect                               75%            74%             1%
Product Gross Profit                       76%            80%            -4%
Provision for Write Down                     -            167             0%
Percent of Revenue                          0%            17%           -17%
Total Gross Margin                         652            623             5%
Total Gross Margin %                       76%            63%            13%
Operating Expenses                       2,376          2,492            -5%
Other Expenses                           1,055          2,977           -65%
Net loss                               (2,779)         (4846)           -43%


Revenue for the three months ended March 31, 2014 was $0.9 million compared to $1.0 million for the previous quarter. The Company continues to experience 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.

The Company's wireless SimplyRF(TM) analog intellectual property ("IP") technology continued to generate strong revenue in the quarter. SimplyRF(TM) licensing revenue in the previous quarter was $0.3 million due to a milestone payment under a contract with a large TV manufacturer. Monthly royalty payments under that contract started in January 2014 and are expected to continue for the remainder of 2014.

Gross Margins

Percentage of total gross margin improved from 63% in the previous quarter to 76% for the three months ended March 31, 2014.

Percentage of product gross margins(1) for interconnect products improved in the three months ended March 31, 2014 over the previous quarter by 1% while decreasing for wireless by 9% due to a lower mix of IP licensing revenue.

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


Operating expenses decreased from the previous quarter by 5% as the Company continues to carefully control both resources and related expenses. The Company has recently hired a small number of engineers that will be used to accelerate new product development. This will increase expenses nominally in the next quarter.

Other expenses decreased 65% from the previous quarter due mainly to a year-end adjustment made in December 2013 that will not occur in 2014.

For a complete discussion of expenses please refer to the financial statements and management's discussion and analysis for the three months ended March 31, 2014.

Product and Customer Development

During the three month period ended March 31, 2014, the Company continued to advance its product offering and expanded into new retail sales channels.

Product Announcements

In January 2014, the Company announced the launch of CouchConnect(TM), a portable five meter/16 foot plug'n'play solution capable of delivering true, real time 1080p HD or 4K UltraHD content from a mobile device to a main screen.

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

In May 2014, the Company announced that the Company's DisplayDirect(TM) Virtual Reality VR7100 product had commenced production based on purchase orders to use the Company's product in leading wearable computing and virtual reality platforms.

Customer Announcements

During the first quarter 2014, the Company made significant progress in expanding its retail channel for CouchConnect(TM) to both "bricks and mortar" storefront retailers and leading online e-tailers. The Company expanded its online presence with the addition of,,, and as authorized retailers shipping CouchConnect(TM) across the United States.

In March 2014, the Company announced that Newegg was shipping the entire CouchConnect(TM) product line. Newegg is an award-winning electronics-focused e-retailer. The product also became available on and in April 2014.


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


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 and product gross margin are additional GAAP measures. 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.

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 recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving t...
There are over 120 breakout sessions in all, with Keynotes, General Sessions, and Power Panels adding to three days of incredibly rich presentations and content. Join @ThingsExpo conference chair Roger Strukhoff (@IoT2040), June 7-9, 2016 in New York City, for three days of intense 'Internet of Things' discussion and focus, including Big Data's indespensable role in IoT, Smart Grids and Industrial Internet of Things, Wearables and Consumer IoT, as well as (new) IoT's use in Vertical Markets.
As organizations shift towards IT-as-a-service models, the need for managing & protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection & 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.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, 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. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessi...