VICTORIA – Despite a $4.3 million net loss in the fourth quarter, (the first unprofitable quarter in its 22 year history), Vecima says that it has successfully “navigated the storm of the global economic recession”.
Revenue for the 2010 fiscal year, ended June 30, was essentially flat at $113.2 million, compared to $114.2 million in fiscal 2009. Net income for the year decreased 94% to $0.8 million, compared with $13.2 million last fiscal year, while net margin was 1% for fiscal 2010, compared with 12% last year.
“Vecima’s sales and net income for the year reflect the impact on our core business where we experienced a marked transition away from historical products that previously contributed significantly to revenue”, said chairman and CEO, Dr. Surinder Kumar, in a statement. “Operators are deploying Vecima products both to enable their transition to all-digital networks and to use freed up capacity on their networks for HDTV and high speed data bandwidth. We are excited that the hard work in R&D during the 2010 fiscal year will deliver increasing new product revenue in 2011."
The manufacturer and cable operator said that the strong Canadian dollar and lower initial margins from new products contributed to push gross margin down by 35%, providing a gross profit of $39.1 million during fiscal 2010, compared with a gross margin of 46% for last year that provided a gross profit of $52.6 million.
Going forward, the company said that its growth strategy is focused on the introduction of new products as well as accessing new markets and new customers. It expects to return to profitability this quarter, and that revenue from new products will ramp up in the second half of the fiscal year. Vecima forecast single digit growth in fiscal 2011.
