ViXS Reports Fiscal 2014 First Quarter Results
TORONTO, June 24, 2013 /PRNewswire/ - ViXS Systems Inc. ("ViXS" or the "Company"), a leader in the development and deployment of semiconductor System on Chip (SoC) solutions for the advanced consumer electronics multimedia and broadcasting market, reported its first quarter results for the period ended April 30, 2013 on June 20, 2013. The results can be found in the Management Information Circular of W 7 Acquisition Corp. ("W7") posted on SEDAR. All results are reported in U.S. dollars under International Financial Reporting Standards ("IFRS"), unless otherwise specified.
ViXS reported fiscal 2014 first quarter ("Q1FY14") revenues of $8.0 million. This compares to revenues of $9.6 million in the fourth quarter of fiscal 2013 ("Q4FY13"), and $8.5 million in the first quarter of fiscal 2013 ("Q1FY13").
The Company's total comprehensive loss in Q1FY14 was $24.9 million, or ($5.01) per share (basic and diluted). This compares with total comprehensive losses of $3.7 million, or ($0.75) per share in Q4FY13 and $8.2 million, or ($1.68) per share in Q1FY13.
Loss from operations (as defined below) in Q1FY14 was $3.6 million, or ($0.72) per share (basic and diluted), compared to a loss from operations of $3.3 million, or ($0.67) per share in Q4FY13 and $7.1 million, or ($1.44) per share in Q1FY13.
"Our first quarter results were in line with our expectations", said Sally Daub, President and CEO, ViXS. "They reflect our transition to a video SoC provider for advanced network infrastructure including set-top box and media gateways, as well as strong growth in our cloud video solutions business. We had continued success in expanding our geographic exposure from Japan to Europe, North America and China/Taiwan and diversifying our customer base".
The following table summarizes ViXS' results in the categories and for the periods specified below (in millions of U.S. dollars, except per share data):
| Three Months Ended | ||||||||
| April 30, 2013 |
January 31, 2013 |
April 30, 2012 |
||||||
| Revenues | $ | 8.0 | $ | 9.6 | $ | 8.5 | ||
| Total comprehensive income (loss) | $ | (24.9) | $ | (3.7) | $ | (8.2) | ||
| Loss per share (basic and diluted) | $ | (5.01) | $ | (0.75) | $ | (1.68) | ||
| Loss from operations | $ | (3.6) | $ | (3.3) | $ | (7.1) | ||
| Loss from operations per share (basic and diluted) |
$ | (0.72) | $ | (0.67) | $ | (1.44) | ||
Loss from operations and loss from operations per share (basic and diluted) are non-IFRS financial measures provided as a complement to financial results prepared in accordance with IFRS. Please refer to "Non-IFRS Financial Measures" below for a reconciliation of such measures to total comprehensive income (loss) and earnings (loss) per share (basic and diluted) determined in accordance with IFRS.
Recent Highlights
- On May 22, 2013, closed a $CDN 57.4 million private placement, co-led by GMP Securities L.P. and Stifel Nicolaus Canada, and entered into an amalgamation agreement with W7 as part of a going-public transaction on the Toronto Stock Exchange ("TSX"). The TSX has conditionally approved the listing of ViXS' common shares on the TSX, subject to the completion of the amalgamation transaction with W7 and ViXS fulfilling all of the listing requirements of the TSX on or before September 10, 2013.
For More Information
ViXS management will be holding a conference call on July 2, 2013, at 11:00 a.m. Eastern time to discuss the Company's results for the first quarter of fiscal 2014.
Toll-free North America: (888) 390-0608
Webcast: http://www.newswire.ca/en/webcast/detail/1185927/1299811
A replay of the call will be available at (888) 390-0541 (passcode 858276#) from 12:30 p.m. Eastern time through July 9, 2013.
About ViXS Systems Inc.
ViXS is the semiconductor pioneer in designing and developing high-performance media solutions for the consumer electronics and video service provider industries. With 422 patents issued and pending worldwide, ViXS has been recognized with a number of industry awards for innovation. ViXS is the world leader in transcoder SoC deployments with over 30 million shipments to date, and still growing.
ViXS has a comprehensive portfolio of products to meet the diverse needs of the global media industry. Portfolio highlights include the most advanced dense transcoder available for cloud-based solutions, as well as SoC's for home devices capable of doing the most simultaneous number of HD streams in the industry. Moreover, ViXS is the only company to have integrated transcoding and Multimedia over Coax Alliance (MoCA) technologies to create the lowest-cost media gateway capable of delivering premium content to consumer IP devices, such as the iPad, inside and outside of the home.
ViXS has three primary product lines: XCode, XCodePro and XConnex. The XCode family of media processors range from stand-alone transcoding chips to full SoC solutions, each capable of handling from one to four simultaneous HD-to-HD transcodes. XCodePro products address the professional enterprise market and are being deployed today for cloud-based media streaming services. The XConnex product line is for communications devices, including MoCA 1.1 and 2.0 solutions. Additionally, ViXS customers are provided with a robust software development kit named Xtensiv.
ViXS is headquartered in Toronto, Canada with global operations and offices in Europe, Asia and North America. For more information on ViXS, visit our website: www.vixs.com.
VIXS™, the ViXS® logo, XCode®, XCodePro™, XConnex™ and Xtensiv™ are trademarks and/or registered trademarks of ViXS. Other trademarks are the property of their respective owners.
Non-IFRS Financial Measures
This press release makes reference to loss from operations and loss from operations per share (basic and diluted), which are non-IFRS measures. These non-IFRS measures are disclosed as a complement to financial results prepared in accordance with IFRS in order to provide a further understanding of ViXS' results of operations from management's perspective. In particular, ViXS uses non-IFRS measures to provide investors with supplemental measures of its operating performance and highlight trends in its core business that may not otherwise be apparent solely from IFRS financial measures. ViXS management uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess ViXS' ability to meet its future capital expenditure and working capital requirements. ViXS believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers.
Loss from operations is defined as total comprehensive income (loss) before share-based transaction expense, finance costs, share offering costs expensed, finance income, convertible preferred share revaluation adjustment, fair value adjustment on warrant liability, provision for repayable government assistance, income tax expense and exchange difference related to translating foreign operations. Loss from operations and loss from operations per share (basic and diluted) do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other companies. Loss from operations and loss from operations per share (basic and diluted) should not be considered in isolation or as a substitute for total comprehensive income (loss) and earnings (loss) per share (basic and diluted) prepared in accordance with IFRS.
The following table reconciles loss from operations to total comprehensive loss, which management believes is the most directly comparable IFRS measure, for the periods shown:
| (in thousands of U.S. dollars) | Three Months Ended | |||||||
| April 30, 2013 |
January 31, 2013 |
April 30, 2012 |
||||||
| Total comprehensive loss for the period | $ | (24,869) | $ | (3,702) | $ | (8,233) | ||
| Share-based transaction expense | $ | 135 | $ | 187 | $ | 808 | ||
| Finance costs | $ | 616 | $ | 227 | $ | 327 | ||
| Finance income | $ | - | $ | (21) | $ | - | ||
| Convertible preferred share revaluation adjustment | $ | 1,184 | $ | - | $ | - | ||
| Fair value of warrant liability | $ | 18,144 | $ | - | $ | - | ||
| Provision for repayable government assistance | $ | 1,121 | $ | - | $ | - | ||
| Income tax expense | $ | 56 | $ | 94 | $ | 14 | ||
| Exchange difference on translating foreign operations | $ | 33 | $ | (71) | $ | 27 | ||
| Loss from operations for the period | $ | (3,580) | $ | (3,286) | $ | (7,056) | ||
Forward-Looking Statements
Statements in this press release that are not historical facts constitute "forward-looking statements" within the meaning of applicable securities laws. Such statements include, but are not limited to, statements regarding ViXS' projected revenues, gross margins, earnings, growth rates, the impact of new product design wins, market penetration and product plans. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "intend" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause ViXS' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements.
These factors include, but are not limited to, our history of losses and the risks associated with not achieving or sustaining profitability; our dependence on a limited number of customers for a substantial portion of our revenues; fluctuating revenue and expense levels arsing from changes in customer demand, sales cycles, product mix, average selling prices, manufacturing osts and timing of product introductions; risks associated with competing against larger and more established companies; risks related to intellectual property, including third party licensing or patent infringement claims; risks associated with adverse economic conditions in Asia; our dependence on a limited number of supply chain partners for the manufacture of our products; and other factors discussed in the "Risk Factors" section of W7's Information Circular, a copy of which is available on SEDAR at www.sedar.com. All forward-looking statements are qualified in their entirety by this cautionary statement. ViXS is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.
ViXS Systems Inc.
Interim Consolidated Statements of Comprehensive Income
(in thousands of U.S. dollars)
(unaudited)
| April 30, | January 31, | April 30, | ||||||
| 2013 | 2013 | 2012 | ||||||
| Revenue | $ | 8,024 | $ | 9,576 | $ | 8,463 | ||
| Cost of sales | 4,177 | 4,767 | 4,721 | |||||
| Gross profit | 3,847 | 4,809 | 3,742 | |||||
| Operating expenses (1) | ||||||||
| Research and development | (6,041) | (5,632) | (7,684) | |||||
| Selling, general and administrative | (2,567) | (2,650) | (3,923) | |||||
| Total operating expenses | (8,608) | (8,282) | (11,607) | |||||
| Income (loss) from operations | (4,761) | (3,473) | (7,865) | |||||
| Other income (expense): | ||||||||
| Finance costs | (18,835) | (227) | (327) | |||||
| Finance income | 21 | - | ||||||
| Convertible preferred share revaluation adjustment | (1,184) | - | - | |||||
| Total other income (expense) | (20,019) | (206) | (327) | |||||
| Income (loss) for the year | $ | (24,780) | $ | (3,679) | $ | (8,192) | ||
| Income tax expense | (56) | (94) | (14) | |||||
| Net income (loss) for the year | (24,836) | (3,773) | (8,206) | |||||
| Exchange difference on translating foreign operations |
(33) | 71 | (27) | |||||
| Total comprehensive income (loss) for the year | $ | (24,869) | $ | (3,702) | $ | (8,233) | ||
| Earnings (loss) per share: | ||||||||
| Basic | $ | (5.01) | $ | (0.75) | $ | (1.68) | ||
| Diluted | $ | (5.01) | $ | (0.75) | $ | (1.68) | ||
| (1) Includes share-based transaction expense of: | ||||||||
| Research and development | $ | 60 | $ | 63 | $ | 515 | ||
| Selling, general and administrative | 75 | 124 | 293 | |||||
| $ | 135 | $ | 187 | $ | 808 | |||
ViXS Systems Inc.
Consolidated Statement of Financial Position
(in thousands of U.S. dollars)
(unaudited)
| April 30, | January 31, | ||
| 2013 | 2013 | ||
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 2,069 | 2,043 | |
| Trade accounts receivable | 6,544 | 5,543 | |
| Other amounts receivable | 4,300 | 3,872 | |
| Inventories | 2,175 | 1,944 | |
| Prepayments | 2,160 | 2,650 | |
| Total current assets | 17,248 | 16,052 | |
| Non-current assets | |||
| Property, plant and equipment | 2,831 | 3,224 | |
| Intangible assets | 34 | 51 | |
| Prepayments | 2,191 | 2,193 | |
| Total non-current assets | 5,056 | 5,468 | |
| Total assets | 22,304 | 21,520 | |
| Liabilities and Equity | |||
| Liabilities | |||
| Current liabilities | |||
| Revolving bank loan payable | 5,272 | 5,672 | |
| Repayable government assistance | 874 | 886 | |
| Trade and other payables | 10,308 | 10,873 | |
| Deferred revenues | 141 | 30 | |
| Subordinated loan | 1,500 | 1,500 | |
| Convertible debt and warrant liability | 24,144 | 0 | |
| Current portion of long-term debt | 1,600 | 1,600 | |
| Total current liabilities | 43,839 | 20,561 | |
| Non-current liabilities | |||
| Accrued non-current liabilities | 40 | 40 | |
| Term bank loan | 2,400 | 2,400 | |
| Repayable government assistance | 5,406 | 4,377 | |
| Preferred share liability | 80,321 | 79,137 | |
| Total non-current liabilities | 88,167 | 85,954 | |
| Total liabilities | 132,006 | 106,515 | |
| Equity | |||
| Issued capital | 5,960 | 5,881 | |
| Share-based payment transactions reserve | 10,811 | 10,728 | |
| Cumulative translation adjustment | (6) | 27 | |
| Deficit | (126,467) | (101,631) | |
| Equity (deficiency) | 109,702 | (84,995) | |
| Total liabilities and equity | 22,304 | 21,520 |
ViXS Systems Inc.
Interim Consolidated Statement of Cash Flows
(in thousands of U.S. dollars)
(unaudited)
| Three Months Ended April 30, |
||||
| 2013 | 2012 | |||
| Operating activities | ||||
| Income (loss) for the period | (24,836) | (8,206) | ||
| Non-cash adjustments to reconcile income (loss) to net cash flows: | ||||
| Depreciation of property, plant and equipment | 179 | 210 | ||
| Amortization of intangible assets | 18 | 11 | ||
| Decrease (increase) in non-current prepayments | 2 | (685) | ||
| Adjustment to provision for repayable government assistance | 1,121 | - | ||
| Share-based payment transaction expense | 135 | 807 | ||
| Finance costs | 18,760 | 327 | ||
| Convertible preferred share revaluation adjustment | 1,184 | - | ||
| Working capital adjustments: | ||||
| Decrease (increase) in trade and other receivables and current prepayments |
(945) | 4,852 | ||
| Decrease (increase) in inventories | (231) | 1,545 | ||
| Increase (decrease) in trade and other payables | (562) | 440 | ||
| Increase in deferred revenues | 111 | 367 | ||
| Cash flows used in operating activities | (5,064) | (332) | ||
| Investing activities | ||||
| Additions (disposal) to property, plant and equipment | 208 | (77) | ||
| Cash flows from (used in) investing activities | 208 | (77) | ||
| Financing activities | ||||
| Proceeds from exercise of share options | 28 | - | ||
| Proceeds from credit facility | 6,000 | - | ||
| Net draw (repayment) of bank borrowings | (400) | 500 | ||
| reduction of government assistance | (107) | (333) | ||
| Professional fees | (300) | - | ||
| Interest paid | (316) | (192) | ||
| Cash flows from (used in) financing activities | 4,905 | (25) | ||
| Net increase (decrease) in cash and cash equivalents | 49 | (434) | ||
| Effect of foreign exchange on cash balances | (22) | - | ||
| Cash and cash equivalents, beginning of period | 2,043 | 1,021 | ||
| Cash and cash equivalents, end of period | 2,069 | 587 | ||
SOURCE ViXS Systems Inc.
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