VICTORIA – Net income for broadband equipment provider Vecima Networks increased to $9.1 million in the second quarter of 2013, up from $6.2 million the year before, even though revenues declined to $23.6 million in the second quarter from $24.9 million in the previous quarter. The company is revising its fiscal 2013 revenue forecast to be in the range of $91 to $98 million and expects fiscal year adjusted EBITDA to improve by 20-40% over fiscal 2012.
"Vecima sees strong deployment of our Terrace and Terrace QAM families of products by North America's largest cable MSOs," said Dr. Surinder Kumar, CEO of Vecima. "I am pleased to report that gross margin remained 40% or higher over the last two quarters. This continued strength in gross margin is attributable to a transition to higher margin products."
"Vecima is in a position where its cash at the end of Q2 [ended December 31, 2013] plus its realizable value of non-core assets is approaching its current market capitalization. We are working hard to unlock hidden value."
In comparing the first half of fiscal 2013 to the last six months of fiscal 2012, adjusted EBITDA increased to $8.4 million from $7.3 million despite revenue decreasing from $54.5 million to $48.5 million says the company. Vecima's cash position improved from $25.7 million at the end of Q1 fiscal 2013 to $41.4 million at the end of Q2 fiscal 2013. The increase in cash and marketable securities is attributable to cash flow from operations and the further sale of radio spectrum for proceeds of $9.4 million.
MSO Business Services
Terrace Family
– Sales decreased 22% to $6.8 million compared to $8.7 million in Q1 of FY13. Vecima says its leading MSO customer had pent up demand for its TC1200 in prior quarters that is starting to level off.
– While revenue from the Terrace Family from lead customer continues to be strong, other MSO customers have taken longer than expected to initiate analog reclamation.
Terrace QAM
– Sales decreased 6% from $5.3 million in Q1 of FY13 to $5.0 million this quarter. The number of units deployed varies from quarter to quarter but expects a sales increase in the coming quarters.
Cable Headend
OEM QAM modules
– Sales increased from $1.1 million to $3.0 million. The uptick was a one- time increase in demand from our customer and is not indicative of sales in future quarters. As indicated previously, sales are expected to decline over fiscal 2013 as the product moves towards end of life.
OEM return path demodulator and CableVista
– Combined sales of these legacy products were relatively flat from Q1 fiscal 2013 to Q2 fiscal 2013. Sales for OEM return path demodulator dropped from $1.6 million to $1.2 million; while CableVista sales improved from $1.1 million to $1.5 million.
– New OEM digital broadband access platform is expected to start volume shipping in Q4 fiscal 2013.
Fleet management – Fleetlynx
– Feedback from customers confirms that the FleetLynx system solution provides superior benefits as compared to competitive offerings. Focus is on accelerating sales to address this large and fragmented market.
Broadband wireless
– Sales decreased from $2.3 million in Q1 of fiscal 2013 to $2.1 million this period. Weakness in sales of both BWIN and WiMAX products were responsible for the revenue drop. Software defined radio sales remained relatively flat quarter over quarter. Vecima has introduced new products in our software defined radio division.
YourLink
– Revenue increased slightly to $3.1 million from Q1 fiscal 2013 to Q2 fiscal 2013. YourLink had net additions to its subscriber base during the period.
