VICTORIA, B.C. – Broadband equipment provider Vecima saw significant decreases in its revenue and profit in its third quarter of 2013, despite improving margins and operating costs.
Revenue in Q32013 dropped by 16.3%, or $2 million, to $21.6 million, compared to $25.8 in the same period in 2012. Vecima attributes much of the decline to lower sales of its QAM modules, which were anticipated as these products transitioned to end of life.
Net profit plummeted 68% in the third quarter to $2 million, or $0.09 per share, compared to $6.2 million or $0.28 per share in the third quarter of 2012. Adjusted EBITDA increased to $4.5 million in the third quarter up from $2.7 million in Q32012, which Vecima says was primarily driven by an increase in the volume of newer, higher margin products sold.
“Gross margin improved to 44% and this is the third consecutive quarter with margins exceeding 40%,” said Dr. Surinder Kumar, CEO of Vecima, in a release. “Our MSO [multiple service operator] business services products continue to be major contributors to our overall revenue. Vecima experienced an almost 50% increase in Terrace QAM sales in Q3 compared to the prior quarter."
Vecima says sales of its Terrace QAM products for MSOs increased $7.3 million in the third quarter from $5.0 million in the previous quarter. Terrace Family revenue, however, has leveled off from its peak in FY12 which the company attributed to pent up demand for a new version from its MSO customers.
The company expects gross margins for FY13 will be above its historical range of 35 to 40%. As a result of improving margins and controlling costs, FY13 adjusted EBITDA is expected to improve by over 40% compared to the same period in 2012.
