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Spectra7 Announces Third Quarter 2018 Financial Results(TSX:SEV) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, today announced its unaudited financial results for the three and nine months ended September 30, 2018. All dollar amounts in this release are expressed in US dollars unless otherwise stated. A copy of the unaudited interim consolidated financial statements for the three and nine month periods ended September 30, 2018 and corresponding management's discussion and analysis will be available under the Company's profile on www.sedar.com. Q3 2018 Financial Results
CEO COMMENTARY "Our investment in Active Copper Cable solutions for the burgeoning Data Center Interconnect market is starting to pay off as we expect significant revenue growth in this current quarter," said Spectra7 CEO Raouf Halim. "Additionally, we are seeing seasonal recovery in our core VR business as we maintain our strong position in that market." Quarterly Highlights
Outlook The Company has entered the fourth quarter of 2018 with its highest starting backlog of 2018 and expects sequential revenue growth in the fourth quarter of 2018. Currently, the Company has record Data Center order backlog on the books to be shipped in the fourth quarter. 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 design centers in 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, outlook, revenue growth in the fourth quarter of 2018, 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, 2017. 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 write-downs from revenue. Management of the Company believes that providing this information allows investors to better understand the Company's historical and future financial performance. 2 Non-IFRS expenses excludes stock-based compensation, restructuring expenses, impairment expenses and other one-time expenses. 3 Non-GAAP Financial Measure - Adjusted EBITDA does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA is defined as net earnings before interest, taxes, other expense (income), net, depreciation and amortization, including amortization of intangibles, stock-based compensation, and acquisition and strategic activities related costs. Management believes adjusted EBITDA and the other non-GAAP and non-IFRS financial measures are important indicators of the ongoing operations of Spectra7's business, provide an additional metric for comparability between reporting periods and provide an additional baseline for analyzing trends in Spectra7's operations. Management believes these financial measures provide a view of the Company's operations that excludes items that management believes are not reflective of the Company's operating performance, such as items traditionally removed from net earnings in the calculation of adjusted EBITDA as well as other expense (income), net. As a result, these non-GAAP measures are provided to supplement investors' overall understanding of, and an enhanced level of transparency into, Spectra7's financial performance. Adjusted EBITDA is not a calculation based on GAAP, and, in measuring the Company's performance, should not be considered as an alternative to net income/(loss), which is the most directly comparable GAAP financial measure.
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