Vecima Networks Inc.

Vecima Networks Inc.

September 25, 2007 16:04 ET

Vecima Increases Annual Revenue by 17% and Profit by 135% to $25M

VICTORIA, BRITISH COLUMBIA--(Marketwire - Sept. 25, 2007) - Vecima Networks Inc. ("Vecima") (TSX:VCM), leading Last Mile Solution® provider for broadband wired and wireless networks, today announced that its 2007 fiscal year financial statements and Management's Discussion and Analysis for the year ended June 30, 2007 have been filed on the SEDAR system. The highlights provided in this press release should be read in conjunction with the Company's audited annual consolidated financial statements and accompanying notes for the years ended June 30, 2007 and June 30, 2006. Our audited annual consolidated financial statements and accompanying notes for the year ended June 30, 2007 are available at:

The webcast can be viewed at:

All dollar amounts are in Canadian dollars. This is Vecima's second annual report filed as a public company.


- Total revenue for the 2007 fiscal year was $93.7 million, an increase of 17% from our total revenue of $80.0 million for the fiscal year ended June 30, 2006. Sales in the three months ended June 30, 2007 were $26.3 million, an increase of 20% over revenue of $21.9 million in the same quarter a year earlier.

- Increased productivity and economies of scale allowed the Company to increase sales in spite of the 430 basis point appreciation in the value of the Canadian dollar. Excluding the foreign exchange effect, Vecima's revenue would have increased 22% to $97.3 million in fiscal 2007.

- Shareholders' equity increased $33.5 million, or 44%, to $109.9 million at June 30, 2007 as compared to $76.4 million at June 30, 2006 as a result of operating profits and successful completion of acquisitions leading to extraordinary gains.

- Gross margin for the 2007 fiscal year was 38%, within our model of 35% to 39%. Gross margin for the fourth quarter was 39% compared to 41% for the same period a year earlier.

- Net income for the 2007 fiscal year was $25.0 million or $1.10 per share as compared to $10.6 million, or $0.50 per share in the 2006 fiscal year. Excluding the effects of extraordinary items, our net income was $9.5 million for the 2007 fiscal year.


- As at the Company's June 30 fiscal year-end, we have sold and delivered over 100,000 QAM Modulator Channels and over 200,000 CMTS Upconverter modules. Our broadband wireless radio deliveries exceed 50,000 units and have been deployed within 12 countries situated throughout Asia, Central America, Africa and North America as at June 30, 2007.

- On April 30, 2007 Vecima announced the culmination of an original equipment manufacturer arrangement with Motorola. Over the past several quarters, we've developed and have begun volume deliveries of an advanced RF return path product Motorola uses in broadband cable systems. Return path traffic in broadband cable systems is increasing exponentially as a result of multiple service operator initiatives such as VOD, HD-VOD and switched digital video.

- At the conclusion of fiscal 2007 Vecima has shipped WiMAX compliant gear for trial deployment to 36 customers in 20 countries. Building upon the success of its Broadband Wireless Internet Network (BWIN™) systems, the Company has continued to invest heavily into research and development and sales and marketing of its WiMAX line and is poised to deliver market leading WiMAX systems with mass market adoption.

- Vecima continues to make significant investments in total research and development with expenditures increasing by 54% in the year ended June 30, 2007 to $12.5 million from $8.1 million in the previous fiscal year. We also increased investments in sales and marketing in fiscal 2007, increasing expenditures by 37% from $3.4 million in fiscal 2006 to $4.6 million in the current fiscal year in order to prepare the way for Vecima's new WiMAX and digital video products. We have also increased our mid-level management staff to help move the Company to the next level of sales, production and profit.

- Vecima acquired Spectrum Signal Processing Inc. ("SSP") in May 2007. SSP added $2.8 million in revenue to Vecima and $2.6 million in costs.

- In fiscal 2007, we opened a software development office in Mangalore on the west coast of India that now has ten employees. Vecima expects the new facility to increase its staffing to approximately 50 personnel within a few months. Additionally, the SSP acquisition brings offices in Vancouver, San Jose and the Washington DC area and the acquisition of WaveRider Communications (Canada) Inc. adds offices in Toronto and Calgary.

- Vecima ended the 2007 fiscal year with 790 employees, representing a 33% increase from the 593 personnel at June 30, 2006.

- Operating expenses increased from 22% of sales in the 2006 fiscal year to 27% in the current fiscal year. These increases in operating expenditures resulted from strategic plans to increase Vecima's products, markets and managerial capacity. These were strategic decisions that we expected would increase the operating expense margin. We expect operating expenses to trend downward as a percentage of sales in future years as the strategic plans deliver increased sales.

Fiscal 2007 Earnings Call

Vecima will hold a conference call and live audio webcast on Tuesday, September 25, 2007 at 5 p.m. (ET) to discuss its financial and operational results for the three months and fiscal year ended June 30, 2007.

To participate in the teleconference, dial 1-866-543-6403 or 617-213-8896 and enter the code 71266625. To access the simultaneous live audio webcast, visit Vecima's web site at The webcast will also be archived on the web site.

A taped rebroadcast will be available approximately two hours after the conference call. To access the taped rebroadcast, dial 1-888-286-8010 or 617-801-6888 and enter the code 43384207.

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 three principal markets: Data over Cable, Broadband Wireless and Digital Video. 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.

Forward-Looking Statements

Certain statements in this news release may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements are generally identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend" and other similar terminology. These statements reflect Vecima's current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors including, but not limited to, the factors discussed under "Risk Factors" in the Company's Annual Information Form dated September 25, 2007 available on SEDAR (, could cause actual results to differ materially from the results discussed in the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Contact Information