VICTORIA – Broadband equipment manufacturer Vecima Networks is expecting revenues for fiscal 2012 of $90 million to $100 million, and gross profit margins to hit the “top end of our targeted 30% to 40% range,” reads the company’s press release this morning.
The company reported second quarter fiscal 2012 revenue of $21.2 million, an increase of 6% compared to the first quarter of fiscal 2012, which it credited primarily to increased sales of recently introduced and new products. "Increased revenue from our recently introduced and new products signals that the expected revenue shift away from our legacy products is continuing. Our customers have increased confidence in the economy moving forward and as a result, are purchasing equipment to further facilitate their operational requirements," said Dr. Surinder Kumar, CEO of Vecima. "We will continue our focus on containing expenses as we grow sales from new and recently introduced products."
The company's cash position was $12.6 million at quarter end, up from $7.8 million at the end of the first quarter of FY2012. On December 20, 2011, Vecima completed its previously announced $8 million sale of 3.5 GHz radio spectrum.
"The improvement in gross margin indicates that we're realizing operational savings from decisions that were made in previous quarters," noted Dr. Kumar. "I'm confident that the executive team that I have in place will continue to execute on initiatives that I have set. These initiatives will result in greater improvements in overall performance."
Vecima says sales of Terrace A increased by 2% in Q2 and expects to increase revenue as new versions of the product are introduced. The quarter-over-quarter revenue from its OEM QAM modules increased by 26%. The company added that these new products are in the initial stage of market introduction and sales orders are expected to ramp up over the next three quarters.
Sales of TerraceQAM in Q2 FY2012 were $1.1 million. Vecima said the result was encouraging given that they are still concluding approval testing in the previous quarter. Forecasts indicate that the conclusion of second phase testing will intensify sales in future quarters. Broadband wireless revenue for the three months ended December 31, 2011 was down 8% to $2.4 million, compared to Q1 of fiscal 2012. Vecima attributed the weaker sales to the BWIN (wireless DOCSIS) line of products.
YourLink (the company’s independent cable and broadband provider) revenue was $3.1 million for Q2 FY2012, compared to $3.2 million last quarter. It says the decrease in the current period compared to the previous period is primarily due to the discontinuance of wireless cable television broadcasting in Saskatchewan as a result of mandatory spectrum claw-back by Industry Canada. YourLink continues to broadcast cable television in British Columbia.
