Record First Half Revenue of $5.6 million, Up Over 330% from the Same Period a Year Ago
CEO Raouf Halim Returns to Certain Strategic and Board Duties
SAN JOSE, Calif., Aug. 29, 2022 /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 for the second quarter of 2022. A copy of the unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2022, prepared in accordance with International Financial Reporting Standards 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 achieved the high-end of our updated guidance range with first-half revenue of $5.6 million, keeping us on pace to generate record revenue this year," said Ron Pasek, Chairman of the Board. "We also strengthened our balance sheet with an upsized convertible debenture offering of CAD$8.9 million. The terms of the new debentures permit us to borrow up to CAD$5.0 million from third party lenders to support working capital needs as part of our growth strategy. I remain pleased with the long-term opportunities in our business to address the growing need for high-speed connectivity solutions in both the hyperscale data center and AR/VR markets."1
Q2 2022 Financial Highlights
2H FY 2022 Outlook 1
The Company expects to generate record revenue in 2022. The current outlook for revenue in the second half of 2022 is in the range of $4.6 million to $6.0 million.5 While the demand environment remains strong, continued supply related constraints are impacting the current revenue outlook. At the mid-point of this range, the projected full year results represent an annual revenue of over $11.0 million, which would be double the revenue generated in 2021.
Non-IFRS operating expenses3 are expected to be between $4.5 million and $5.0 million5, which includes increased headcount growth to support customers and development expenses associated with new products. Non-IFRS operating expenses were approximately $3.9 million in the second half of 2021.
Key Business Highlights
CEO Raouf Halim continues to be on medical leave although Mr. Halim has resumed Board related duties on a limited time basis. Spectra7 is continuing its business plans uninterrupted, led by its deep bench of executive leadership. Chair of the Board of Directors Ronald Pasek, Chief Financial Officer Bonnie Tomei, and other members of the executive team will continue to co-manage Mr. Halim's duties during his leave.
As a part of the annual long term incentive plan outlined in their respective offer letters, Spectra7's board of directors has granted 1,187,828 restricted share units ("RSUs") to the Company's Chief Executive Officer and such number of RSUs to the Company's Chief Financial Officer as is equal to approximately CAD $219,000 divided by the closing price of the common shares on the TSX Venture Exchange on August 29, 2022.
1 This is forward-looking information and is based on a number of assumptions which include the current customer purchase orders received, supply outlook and anticipated operational expenses. See "Cautionary Notes".
2 Gross margin is a non-GAAP measure. Refer to "Revenue and Gross Margin" in the MD&A for reconciliation to measures reported in the Company's financial statements.
3 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-IFRS Operating Expenses" in the MD&A for reconciliation to measures reported in the Company's financial statements.
4 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 "EBITDA" in the MD&A for reconciliation to measures reported in the Company's financial statements.
5 This is forward-looking information and is based on a number of assumptions, which include the current customer purchase orders received, supply outlook and anticipated operational expenses. See "Cautionary Notes".
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 data centers, 5G infrastructure, virtual and augmented reality, and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and technical support location in Dongguan, China.
For more information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services provided (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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 expectation for revenue and supply availability in the second half of 2022, the Company's ability to obtain additional financing as permitted under the new debentures, the Company's expected operating expenses, 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 Company's annual information form for the year ended December 31, 2021. 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.
Spectra7 Microsystems Inc.
SOURCE Spectra7 Microsystems Inc.
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