AR/VR Drives Revenue Growth in 2022, New
800G/1.6TB Datacenter Products Expected to Begin Generating Revenue
in Second Half of 2023
SAN
JOSE, Calif., April 25,
2023 /CNW/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7
Microsystems Inc. ("Spectra7" or the "Company"), a
leading provider of high-performance analog semiconductor products
for broadband connectivity markets, today announced its financial
results and a business update for the three months and full year
ended December 31, 2022, preliminary
Q1 2023 results, and its initial outlook for Q2 2023. A copy of the
audited consolidated financial statements for the year ended
December 31, 2022, and the
corresponding management's discussion and analysis (the
"MD&A") will be available under the Company's profile on
www.sedar.com. Unless otherwise indicated, all dollar amounts in
this press release are expressed in US dollars.
"We had a strong 2022 despite supply constraints, more than
doubling revenue year-over-year to $11.3
million. Volumes ramped in our AR/VR product line with a
market leading game console manufacturer and hyperscale data center
activity continued to progress with key datacenter partners and
customers," said Raouf Halim, Chief
Executive Officer.
"Data center customers are increasingly engaged in test and
qualification activities, specifically around AI and infrastructure
applications, on the rapidly advancing new switches that require
800G and 1.6TB data rate interconnects. These switches are to
support the high data throughput and reduced power consumption
requirements for efficient operation. We believe that Active Copper
Cable ("ACC") is the most power and cost-efficient solution to meet
these requirements for top-of-the-rack and short-run connectivity,
an estimated $1 billion market by
20261. We have a growing list of customers seeking
to incorporate our ACC solutions for their needs. We expect
to receive orders from key datacenter customers in North America and Europe in the second half of 2023."
2
"We started 2023 with a strong order backlog and anticipate
supply availability to improve steadily throughout 2023, which
would enable us to meet our goal of EBITDA3
profitability by the end of the year," 2 said Mr.
Halim.
Fourth quarter and full year 2022 financial
highlights
- Fourth quarter 2022 revenue of $3.0
million, up approximately 15% year-over-year, and full-year
2022 revenue was $11.3 million, an
increase of approximately 107% compared to $5.5 million in the previous year.
- Preliminary fourth quarter gross margin4 as a
percentage of revenue in the fourth quarter increased to
approximately 59%. Full-year gross margin was 50%.
- Non-IFRS operating expenses5 were $2.0 million in the fourth quarter, up
approximately 5% year-over-year while the Company continues to
control its spending. Full-year non-IFRS operating expenses were
$8.8 million.
- Basic and diluted loss per share for the fourth quarter was
$(0.04), compared with a basic and
diluted loss per share of $(0.03) in
the same period a year ago.
- EBITDA3 loss in the fourth quarter was $38,000, compared with an EBITDA3 loss
of $147,000 in the same period a year
ago.
- The Company strengthened its balance sheet with gross proceeds
of a CDN$6.0 million private
placement in March 2023.
Preliminary first quarter 2023 revenue
results2
The Company expects to report revenue of approximately
$3.1 million for the first quarter of
2023, compared with $2.1 million in
the first quarter of 2022. This would represent an increase of
approximately 43% from the prior-year quarter.
Q2 2023 Outlook2
The Company anticipates revenue for second quarter of 2023 to be
in the range of $3.1 million to
$3.3 million.
Restricted Share Unit Grants
The Company's board of directors has approved the grant of an
aggregate of 568,090 restricted share units to the Company's
executive officers and directors pursuant to the Company's
restricted share unit plan. The restricted share units shall vest
on the one year anniversary of the grant date.
Notes:
1 Spectra7 internally generated model based on
650Group silicon chipsets for Ethernet optical transceivers and
active cable alternatives posted June 3,
2022.
2 This is forward-looking information and is based
on a number of assumptions, which include the current and
anticipated customer purchase orders received, supply outlook and
anticipated operational expenditures. See "Cautionary Notes".
3 EBITDA or earnings before interest, tax,
depreciation, and amortization is a non-GAAP measure. EBITDA
excludes share-based compensation, amortization, depreciation,
interest, and tax expenses. Refer to "Non-GAAP Measures" in the
MD&A for reconciliation to measures reported in the
Company's annual financial statements.
4 Gross margin is a non-GAAP measure which is computed
as revenue less cost of sales divided by revenue. Refer to "Revenue
and Gross Margin" in the MD&A, for reconciliation to measures
reported in the Company's financial statements.
5 Non-IFRS operating expenses is a non-GAAP measure
which includes research and development, sales and marketing,
general and administrative expenses and depreciation and
amortization for capital equipment and right-of-use assets and
excludes share-based compensation expense, non-recurring
termination costs, interest and related financing costs, change in
fair value of warrant liabilities, foreign exchange gain/loss and
gain/loss from property and equipment disposal. Refer to "Non-GAAP
Measures" in the MD&A for reconciliation to measures reported
in the Company's financial statements.
ABOUT SPECTRA7 MICROSYSTEMS INC.
Spectra7 Microsystems Inc. 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 centers and other connectivity markets.
Spectra7 is based in San Jose,
California with a design center in Cork, Ireland and a technical support location
in Dongguan, China. For more
information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY NOTES
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, the Company's expected Q2 revenue, EBITDA
results, revenue improvement and supply availability, expected
orders for applications in North
America and Europe, and
acceleration in the data market, and the Company's strategy,
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 MD&A. Management provides
forward-looking statements because it believes they provide useful
information to investors when considering their investment
objectives and cautions investors not to place undue reliance on
forward-looking information. Consequently, all of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, the Company. These forward-looking
statements are made as of the date of this press release and the
Company assumes no obligation to update or revise them to reflect
subsequent information, events or circumstances or otherwise,
except as required by law.
For more information, please contact:
Matt Kreps
Darrow Associates
214-597-8200
ir@spectra7.com
Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
ir@spectra7.com
Spectra7 Microsystems Inc.
John Mitchell
Public Relations
650-269-3043
pr@spectra7.com
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SOURCE Spectra7 Microsystems Inc.