Vecima Networks Inc.

Vecima Networks Inc.

April 19, 2011 12:05 ET

Vecima Networks Announces Operational Cost Reductions

VICTORIA, BRITISH COLUMBIA--(Marketwire - April 19, 2011) - Vecima Networks Inc. (TSX:VCM) today announces that it is taking steps to implement a cost-saving initiative to facilitate the Company's return to operational profitability. As a result, the Company expects to reduce expenses by approximately $6 million in fiscal 2012. The savings will be primarily derived from an 18% reduction in personnel effective immediately.

A strong Canadian dollar, continued weak economic conditions in the US, reduced demand for legacy solutions and slower than anticipated sales growth of new products have created a challenging environment for the Company to remain profitable at current sales levels. The Company believes that this ongoing cost-saving program together with continued strategic focus on new-product market development will lead the Company to profitability through the current economic environment. Vecima is prioritizing its resources and focusing its efforts on sales growth of new products. The reduced cost structure aims to deliver profitability within the current conditions and to capitalize on growth of new products as they mature. The Company continues to see evidence that the markets for these new products remain strong based on indications from customers although sales increases have clearly been affected by the timing of ramp up.

"We are determined to take advantage of the opportunity to generate sales growth from new products in which we have invested significant R&D resources over the course of years. At the same time, we must continue to ensure the company remains strong and executes a plan to return to operational profitability," said Dr. Surinder Kumar, Chairman and CEO of Vecima. "We know that employment adjustments are never easy and we sincerely appreciate the contribution and dedication of the staff affected by today's announcement and of those who will drive the Company forward."

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. For further information, visit

Forward-Looking Statements

Certain statements in this press release may constitute forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include but are not limited to statements regarding management's intentions, belief or current expectations with respect to market and general economic conditions, future costs and operating performance. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and/or are beyond our control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include, but are not limited to, the current significant general economic uncertainty and credit and financial market volatility and the distinctive characteristics of Vecima's operations and industry that may have a material impact on, or constitute risk factors in respect of Vecima's future financial performance, as set forth under the heading "Risk Factors" in the Company's Annual Information Form dated September 28, 2010, a copy of which is available at In addition, although the forward-looking statements in this press release are based on what management believes are reasonable assumptions, such assumptions may prove to be incorrect. Consequently, readers should not place undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Vecima disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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