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Spectra7 Microsystems Inc
Symbol SEV
Shares Issued 147,440,171
Close 2017-04-18 C$ 0.455
Market Cap C$ 67,085,278
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Spectra7 estimates revenue of $2.7M (U.S.) for Q1

2017-04-18 16:11 ET - News Release

Mr. Raouf Halim reports

SPECTRA7 ANNOUNCES PRELIMINARY RECORD FIRST QUARTER 2017 FINANCIAL RESULTS

Spectra7 Microsystems Inc. has released preliminary selected unaudited financial results for the three months ended March 31, 2017. Unless otherwise indicated, all dollar amounts in this press release are expressed in U.S. dollars.

Highlights:

  • Record quarterly revenues of $2.7-million achieved in first quarter 2017 (1);
  • Significantly improved operating results due to lower operating expenditures;
  • Transformative design wins with industry leaders in the virtual reality, augmented reality, mixed reality markets;
  • Encouraging market acceptance of Spectra7's data centre solutions;
  • Growth in AR/VR portfolio drives sequentially higher backlog in second quarter versus first quarter.

Preliminary first quarter 2017 results

The company expects to report revenues of approximately $2.7-million (1) for the first quarter of 2017, representing an all-time-high quarterly revenue. Growth in the first quarter was driven by increasing adoption of its patented active copper cable technology. Gross margin (2) as a percentage of revenue is expected to be approximately 59 per cent to 61 per cent, consistent with the prior quarter. Operating expenditures for the company decreased by over $700,000 from the prior quarter, primarily due to lower general and administrative expenses, which are expected to continue through 2017. As a result, the company's operating losses decreased by over 25 per cent sequentially quarter over quarter.

Chief executive officer commentary

"The first quarter was one of tremendous achievements across our business," said Spectra7 chief executive officer Raouf Halim. "I'm delighted to report record revenues of $2.7-million (1) in the first quarter, with this strong revenue growth accomplished in what is seasonally a weak quarter for the industry. Furthermore, we had record revenue while maintaining healthy gross margins from previous quarters and reducing our operating expenditures, greatly improving the profitability of the company. We are also pleased to have achieved expanded market acceptance of our data centre solutions, transformative design wins in the AR/VR/MR markets and sequentially higher backlog due to growth in our AR/VR portfolio. These achievements are the hallmark of our first quarter. We look forward to an exciting year ahead."

Other quarterly highlights:

  • The company secured three Tier 1 design wins in first quarter that management believes could be the three most important wins in the AR/VR/MR industry. One of these design wins is expected to contribute material revenue growth in the second half of 2017.
  • The company began to sample its GaugeChanger Plus to leading cable and OEM (original equipment manufacturers) partners in the data centre market, with early testing under way.
  • The company significantly expanded its technical and sales support organization in the Asia Pacific region in support of its rapidly expanding AR/VR/MR and data centre customer base.

Unaudited financial statements for the company's first quarter ended March 31, 2017, are expected to be released in May, 2017. The company looks forward to providing further updates on its progress this year.

About Spectra7 Microsystems Inc.

Spectra7 Microsystems is a high performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centres and other connectivity markets. Spectra7 is based in Palo Alto, Calif., with design centres in Markham, Ont., Cork, Ireland, and Little Rock, Ark.

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