TORONTO, ONTARIO--(Marketwired - May 28, 2014) - 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, 2014prepared in accordance with International Financial Reporting Standards and the corresponding Management's Discussion and Analysis will be available under the Company's profile on www.sedar.com. All amounts are in US dollars unless otherwise noted. Q1 Highlights -- Revenue for the quarter ended March 31, 2014was $0.9 million, an increase of more than three times the revenue in the same quarter of 2013. -- Revenue from the Company's interconnect products increased 30% for the quarter ended March 31, 2014to $0.8 millioncompared to $0.6 millionfor 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, 2013and 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, 2013and 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 Walmart.comand Newegg.com authorized retailers shipping CouchConnect(TM) across the United States. -- Completed equity public offering of over CDN$7 millionto 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."
For the three month period ended
Gross margins for the three month period ended
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 --------------------------------------------- Revenue 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
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
Percentage of total gross margin improved from 63% in the previous quarter to 76% for the three months ended
Percentage of product gross margins(1) for interconnect products improved in the three months ended
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
For a complete discussion of expenses please refer to the financial statements and management's discussion and analysis for the three months ended
During the three month period ended
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 Newegg.com,
ABOUT SPECTRA7 MICROSYSTEMS INC.
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
(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.
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Spectra7 Microsystems Inc. Sean PeasgoodInvestor Relations 416.565.2805 email@example.com Spectra7 Microsystems Inc. Melissa CheeVice President, Corporate Marketing and Product Management 647-472-2468 firstname.lastname@example.org Source: Spectra7 Microsystems Inc.