New 800G/1.6TB Datacenter Products Expected to
Begin Generating Revenue in Second Half of 2023
SAN
JOSE, Calif., May 9, 2023
/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
three months ended March 31, 2023 and
re-affirmed its outlook for Q2 2023. A copy of the consolidated
financial statements for the three months ended March 31, 2023 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 are off to a strong start in the first quarter, increasing
revenue by 50% year over year, following exceptional growth in
2022. Our gross margin for the quarter increased to 63%. In
addition, we continue to advance key relationships across all our
end markets, including AR/VR and hyperscale data centers. The
hyperscale data center partners and customers are readying 800G and
1.6TB products for expected deployment in the second half of this
year, a critical part of the next data center upgrade
cycle," 1 said Raouf
Halim, Chief Executive Officer.
"Test and qualification activities are increasingly focused on
new switches that require 800G and 1.6TB data rate interconnects.
These tests continue to demonstrate that Active Copper Cables
enabled by Spectra7 are the most power and cost-efficient solutions
to meet the requirements for top-of-the-rack and short-run
connectivity, an estimated $1 billion
market by 2026.2 We expect this process to generate
orders from key data center customers in North America in the second half of
2023."1
"Based on these activities and indications that supply
availability will improve steadily throughout 2023 and support a
return to higher margins, we have established a goal of
EBITDA3 profitability by the end of the
year,"1 said Mr. Halim.
First quarter 2023 financial highlights
- First quarter 2023 revenue of $3.1
million, up approximately 50% year-over-year.
- Gross margin4 as a percentage of revenue in the
first quarter increased to 63%, from 43% in the same quarter in the
prior year.
- Non-IFRS operating expenses5 were $2.2 million in the first quarter, down from
$2.5 million in the same quarter in
the prior year as the Company continues to control its
spending.
- Basic and diluted loss per share for the first quarter was
$(0.03), compared with a basic and
diluted loss per share of $(0.08) in
the same period a year ago.
- EBITDA3 loss in the first quarter was $70,000, compared with an EBITDA loss of
$1.3 million in the same period a
year ago.
- The Company strengthened its balance sheet with gross proceeds
of a CDN$6.0 million private
placement in March 2023.
Q2 2023 Outlook1
The Company anticipates revenue for second quarter of 2023 to be
in the range of $3.1 million to
$3.3 million.
Notes:
1 This is forward-looking information and is
based on a number of assumptions, which include the current and
anticipated customer purchase orders received, supply outlook and
anticipated operational expenditures. See "Cautionary Notes".
2 Spectra7 internally generated model based on
650Group silicon chipsets for Ethernet optical transceivers and
active cable alternatives posted June 3,
2022.
3 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 "Non-GAAP Measures" in the
MD&A for reconciliation to measures reported in the Company's
financial statements for the three months ended March 31, 2023.
4 Gross margin is a non-GAAP measure which is
computed as revenue less cost of sales divided by revenue. Refer to
"Revenue and Gross Margin" in the MD&A, for reconciliation to
measures reported in the Company's financial statements for the
three months ended March 31,
2023.
5 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-GAAP
Measures" in the MD&A for reconciliation to measures reported
in the Company's financial statements.
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 a design center in Cork, Ireland and a technical support location
in Dongguan, China. For more
information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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, the Company's expected sales in the second half
of 2023, the expected datacenter upgrade cycle, expected Q2
revenue, expected EBITDA results, expected improvement in supply
availability, expected orders from datacenter customers in
North America, and expected
acceleration in the data center market, 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 management's discussion
and analysis for the year ended December 31,
2022. 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.
For more information, please contact:
Matt Kreps
Darrow Associates
214-597-8200
ir@spectra7.com
Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
ir@spectra7.com
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SOURCE Spectra7 Microsystems Inc.