Q1FY15 Financial Summary
-- Revenue of $7.4 million, a sequential increase over the previous
quarter's revenue of $7.0 million. Revenue from new products accounted
for 61% of sales in F1Q15 versus 54% in the previous quarter, and 37% in
the same quarter last year.
-- Gross margin of 42.1%
-- Product margin of 47.4% which excludes the effects of amortization of IP
and mask-sets, support contracts, and design kits.
-- IFRS Comprehensive loss of $5.1 million, or a loss of $(0.10) per share
basic and diluted, a 34% improvement over the previous quarter.
-- Non-IFRS net loss totalled $4.4 million, as compared to a $6.9 million
loss in the previous quarter, and a $6.1 million loss in the same
quarter last year.
-- $19.7 million of cash and equivalents, with no bank debt outstanding at
end of quarter.
Customer and Product Announcements
-- Sharp selected ViXS to power its Ultra High Definition (UHD) 4K Recorder
and Television products that are expected to begin shipment during June
in Japan.
-- ViXS launches UHD HEVC 4K Golden Reference Decoder providing the
broadcast industry with a standardized tool to test, validate, and
enable UHD 4K/HEVC content.
-- ViXS demonstrated industry-first RDK client on UHD 4K Platform at The
Cable Show.
-- Astra and NTT-Plala commence trails of UHD 4K HEVC 60p using ViXS XCode
6.
-- ViXS received the top award for Outstanding Business Innovation from the
Hong Kong-Canada Business Achievement Awards.
Q1FY2015 Results:
Revenue for the first quarter of fiscal 2015 was $7.4 million, up 6% sequentially from the $7.0 million in the previous quarter.
Revenue from new products (XCode6, XConnex) accounted for 61% of sales in F1Q15 versus 54% in the previous quarter, and 37% in the same quarter last year.
Revenue was down 7% from the $8.0 million in the same quarter of last year primarily due to the timing of product transitions as customers migrate from the Company's older generation products (such as the XCode5000 and older products) to more integrated next-generation SoC products for the MoCA (XConnex) and cloud video infrastructure (XCodePro) markets. As evidence of this transition, ViXS' new XCode6 product completed its first full quarter of sales, exceeding 20% of revenue, and remains the only commercial shipping product to support UHD4K-60 and HEVC 10-bit.
Gross margin was 42.1% in Q1FY15, an increase from the 40.1% level in Q4FY14 due to the higher mix of XCode6 and other integrated SoC products. Product gross margin was 47.4% in the quarter. Unlike most semiconductor companies, ViXS amortizes its IP and mask-sets, and certain other design costs, at the COGS level but we believe our product margin is a useful metric for assessing and comparing ViXS margins within our industry. ViXS has included the product margin for each of the last eight quarters in the "Selected Consolidated Quarterly Financial Information" section in Company's filed MD&A.
Comprehensive loss for the first fiscal quarter was $5.1 million, or a loss of $(0.10) per share basic and diluted, a 34% improvement compared with the comprehensive income loss in the fourth quarter of FY2014 of $7.6 million, or $(0.15) per share basic and diluted. The sequential improvement in IFRS loss was primarily due to higher revenue from XCode6 and MoCA products, plus ongoing cost controls. The Company also had a $0.3 million gain from currency gains which is now reported below the operating expense line for this and previous quarters. A detailed explanation of these and other changes in operating expenses is also described in the Company's filed MD&A.
Non-IFRS net loss for the third fiscal quarter was $4.2 million, or $(0.09) per share (basic and diluted), compared with a non-IFRS net loss of $6.9 million, or $(0.14) per share (basic and diluted), in the prior quarter and non-IFRS net loss of $6.1 million, or $(1.23) per share (basic and diluted), in the same quarter last year. The impact on non-IFRS loss from continuing operations and non-IFRS loss per share (basic and diluted) from continuing operations are summarized in the table below.
Total of cash and cash equivalents was $19.7 million as of April 30, 2014, compared to $25.6 million at the end of the previous quarter. The decrease was due to $5.1 million in operating loss and the timing of certain working capital needs (including IP licenses) needed for growth this year.
"ViXS made a strategic decision to invest early in technologies that we saw disrupting the global video industry, and as a result we are the first and only commercially shipping solution to support both UHD 4K 60p and 10-bit HEVC," said Sally Daub, President and CEO of ViXS Systems Inc. "Our customer wins, Intel partnership, and incremental revenue from new products in Q1FY15 clearly demonstrate that our investment is starting to pay off, and we expect that UHD and HEVC will drive continued revenue and earnings growth for years to come."
Based on the strength of our new products, ViXS expects sequential revenue growth for the second quarter of fiscal 2015, and continued growth is expected through the rest of the year.
For More Information
In conjunction with this announcement, ViXS management will be holding a conference call on Thursday, June 5, 2014, at 5:00 P.M. Eastern time to discuss the Company's results for the first quarter fiscal 2015.
FISCAL 1Q15 CONFERENCE CALL DETAILS:
DATE: Thursday June 5, 2014
TIME: 5:00 P.M. EST
DIAL IN NUMBER: Local / International: 647-426-1845
North American Toll: Free: 1-866-782-8903
REPLAY NUMBER: Local / International: 416-915-1035
North American Toll: Free: 1-866-245-6755
Passcode: 271960
WEBCAST:
http://public.viavid.com/index.php?id=108940
The webcast will be archived for 90 days
WEBSITE: To view the press release or any additional
financial information, please visit the Investor
Relations section of the ViXS website at:
http://investor.vixs.com/investor-relations/
SELECTED CONSOLIDATED FINANCIAL INFORMATION
Three Month Period Ended
April 30, January 31, April 30,
Dollar amounts in U.S. dollars 2014 2014 2013
------------------------------------
Amounts in thousands
Revenues $7,441 $7,039 $8,024
Cost of sales 4,305 4,173 4,178
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Gross margin 3,136 2,866 3,846
------------------------------------
Operating expenses
Research and development 4,255 4,548 6,041
Selling, general and administrative 4,246 4,230 2,577
------------------------------------
Total operating expenses (1) 8,501 8,778 8,618
------------------------------------
Loss before finance costs and income,
currency gain, convertible preferred
share revaluation adjustment and
income taxes (5,365) (5,912) (4,772)
------------------------------------
Other income (expense):
Finance costs (20) (152) (18,835)
Finance income 24 33 -
Currency gain 291 (1,578) 10
Convertible preferred share
revaluation adjustment - - (1,185)
------------------------------------
Total other income (expense) 295 (1,697) (20,010)
------------------------------------
Loss before taxes ($5,070) ($7,609) ($24,782)
Income tax expense (13) (10) (56)
------------------------------------
Net loss for the period (5,083) (7,619) (24,838)
Items subject to reclassification
Exchange difference on translating
foreign operations (30) - (40)
------------------------------------
Comprehensive loss for the period ($5,113) ($7,619) ($24,878)
------------------------------------
------------------------------------
Loss per share attributed to common
equity holders
Basic and Diluted ($0.10) ($0.15) ($5.01)
Weighted average number of common
shares outstanding
Basic and Diluted 50,352 50,225 4,960
(1) Includes share-based transaction
expense of:
Research and development 345 250 60
Selling, general and administrative 199 251 75
------------------------------------
$544 $501 $135
------------------------------------
------------------------------------
Consolidated Balance Sheet
Data As at April 30, As at January 31, As at April 30,
2014 2014 2013
---------------- ----------------- ---------------
Cash and cash equivalents $19,667 $25,588 $2,069
Trade accounts receivable 7,045 6,959 6,544
Inventory 3,321 5,293 2,175
Total assets 40,706 47,359 22,304
Bank Debt - - 10,772
Total liabilities 12,782 15,048 132,006
Shareholders' equity
(deficiency) 27,924 32,311 (109,702)
NON-IFRS FINANCIAL MEASURES
