"Our MSO 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," stated Kumar. At quarter end, cash and marketable securities totaled $25.0 million even after the Company completed a special cash distribution earlier in the quarter of approximately $22.3 million.
MSO BUSINESS SERVICES
-- Sales decreased to $5.0 million compared to $6.8 million in Q2 FY13.-- As expected, Terrace Family revenue has leveled off from its peak in FY12 which was attributed to pent up demand for a new version from our MSO customers.
-- Sales increased 48% from $5.0 million in Q2 FY13 to $7.3 million this quarter. The increase is attributed to greater uptake by MSO customers who are rapidly deploying high definition video services within the hospitality market space.
OEM QAM Modules
-- As the product continues to move towards end of life, we saw sales drop to $0.4 million in Q3.
OEM Return Path Demodulator and CableVista
-- Sales for our OEM return path demodulator increased from $1.2 million to $1.5 million; while CableVista sales decreased from $1.5 million to $1.1 million from Q2 to Q3 FY13.
Digital Broadband Access Platform
-- Our new digital broadband access platform progressed through multiple MSO end customer trials which were led by our OEM customer during Q3. Feedback has been very positive and we expect to start shipping in commercial volume during Q4 FY13.
FLEET MANAGEMENT - FLEETLYNX
-- Subsequent to Q3, the Company hired a General Manager for its FleetLynx product line to intensify focus on the commercial rollout and to capitalize on customer opportunities.
-- Sales increased from $2.1 million in Q2 FY13 to $2.4 million this period. The increase is attributed to an improvement in software defined radio sales.
-- Revenue remained relatively flat at $3.2 million for Q3 FY13.
We expect our FY13 gross margins will be above our historical range of 35 to 40%. As a result of improving margins and controlling costs, we expect our FY13 adjusted EBITDA will improve by over 40% versus FY12. We are lowering our estimate for capital expenditures for FY13 to be in the range of $2.8 million to $3.5 million.
We expect our cash position to further strengthen in future quarters.
A conference call and live audio webcast will be held on May 14, 2013 at 1 p.m. ET to discuss the Company's second quarter results. Vecima's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2013 are available under the Company's profile at www.SEDAR.com, and at http://www.vecima.com/financials_ir.php.
To participate in the teleconference, dial 1-800-319-4610 or 1-604-638-5340. The webcast will be available in real time at http://services.choruscall.ca/links/vecima140513.html and will be archived on the Vecima website at http://www.vecima.com/events_ir.php.
About Vecima Networks
Vecima Networks Inc. (TSX: VCM) designs, manufactures and sells products that enable broadband access to cable, wireless and telephony networks. Vecima's hardware products incorporate original embedded software to meet the complex requirements of next-generation, high-speed digital networks. Service providers use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services. Vecima's solutions allow service providers to rapidly and cost-effectively bridge the final network segment that connects the system directly to end users, commonly referred to as "the last mile", by overcoming the bottleneck resulting from insufficient carrying capacity in legacy, last mile infrastructures. Vecima's products are directed at two principal markets: Converged Wired Solutions and Broadband Wireless. The Company has also developed and continues to focus on developing products to address emerging markets such as Voice over Internet Protocol, fibre to the home and IP video. More information is available at our website at www.vecima.com.