PALO ALTO, CA and TORONTO, ON–(Marketwired – March 09, 2017) – Spectra7 Microsystems Inc. (TSX: SEV) (“Spectra7” or the “Company”), a leading provider of high-performance analog semiconductor products for virtual reality (VR), augmented reality (AR), data center and other connectivity markets today announced its audited financial results for the year ended December 31, 2016. A copy of the audited consolidated financial statements for the 12-month ended December 31, 2016 prepared in accordance with International Financial Reporting Standards and the corresponding management’s discussion and analysis will be available under the Company’s profile on www.sedar.com. All amounts are in US dollars unless otherwise noted.
2016 Highlights
- Revenue for the year ended December 31, 2016 was $8.6 million as compared to $4.2 million in the previous year, representing an increase in revenue of 104%.
- Revenue for the fourth quarter of 2016 was approximately $2.5 million, representing an increase of 135% over the prior quarter and 58% over the same period in the prior year.
- Gross margin(1) as a percentage of revenue for the year ended December 31, 2016 remained strong at 58% and consistent with gross margin percentage of 60% in the previous year.
- Gross margin percentage for the three-month period ended December 31, 2016 at 60% was higher as compared to the gross margin percentage in the same period in 2015 of 46%.
- The Company experienced significant revenue growth of almost 200% in its AR/VR portfolio during 2016.
- On September 26, 2016, the Company announced the appointment of Raouf Halim as Chief Executive Officer, replacing the former Chief Executive Officer, Tony Stelliga, who passed away unexpectedly in May 2016.
- The Company raised gross proceeds of CAD $6.7 million in October from a bought deal public offering of common shares, including an investment of CAD $1.2 million by its CEO, certain board members, and insiders.
- In 2016, the Company secured multiple, material design wins with tier-one customers spanning both AR and VR markets as well as the emerging MR (Mixed Reality) market.
Subsequent to Year-End
- The Company continued to announce, demonstrate and ship new products during 2016 and through February of 2017, including the demonstration at CES 2017 of its 38Gbps active cable module set and its first data center products for 400G Ethernet applications at the DesignCon show in early February 2017.
- The Company begins 2017 with record high shippable order backlog.
CEO Commentary
“I am delighted with the outstanding growth delivered by Spectra7 in 2016, despite a soft Q3,” said Spectra7 CEO Raouf Halim. “Revenues more than doubled over 2015, driven by almost 200% revenue growth of our industry leading portfolio of ultra-light, ultra-thin active cable solutions for the AR/VR market.”
“As we start 2017, we expect continued strong growth driven by our tier one customers in our core VR and AR markets coupled with the emerging MR (mixed reality) market,” continued Raouf Halim. “Finally, I am very pleased with the positive early acceptance of our innovative GaugeChanger Plus™ technology for the burgeoning data center market opportunity.”
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, data centers and other connectivity markets. Spectra7 is based in Palo Alto, California with design centers in Markham, Ontario, Cork, Ireland, and Little Rock, Arkansas. For more information, please visit www.spectra7.com.
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, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, 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 Company’s annual MD&A for the year ended December 31, 2016. 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.
(1) Additional GAAP Measure – Gross margin is presented in this press release consistent with information presented in the Company’s financial statements. Gross margin has been calculated by deducting manufacturing cost of sales, and provision for inventory writedowns from revenue. Management of the Company believes that providing this information allows investors to better understand the Company’s historical and future financial performance.
For more information, please contact:
Spectra7 Microsystems Inc.
Sean Peasgood
Investor Relations
416-565-2805
ir@spectra7.com
Spectra7 Microsystems Inc.
David Mier
Chief Financial Officer
925.858.7011
pr@spectra7.com
Spectra7 Microsystems Inc.
Rob Chalmers
Capital Markets
647-402-7552
ir@spectra7.com