fins and ceo leave Fiscal Year 2021 Revenue up 429% from Fiscal 2020
Q4 Revenue up 591% from Q4 Fiscal 2020
Customer Orders Remain Above $11 million with Unconstrained Customer Demand Continuing to Exceed $20 Million for 2022
SAN JOSE, Calif., May 2, 2022 /PRNewswire/ -- (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 filing of its audited financial results for the fiscal year ended December 31, 2021. A copy of the audited consolidated financial statements for fiscal year 2021 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.
Fiscal Year 2021 Financial Summary
- Revenue for Fiscal 2021 was $5.5 million, up approximately 429% when compared with $1.0 million in Fiscal 2020.
- Gross margin1 as a percentage of revenue for Fiscal 2021 was 58%, up approximately 700 basis points from 51% in Fiscal 2020.
- Non-IFRS operating expenses2 in Fiscal 2021 were $6.7 million, compared with $5.1 million in the previous year. The increase was primarily due to higher personnel related expenses as employee furloughs ended and non-recurring engineering and supplies expenditure to support customer product ramped.
- Basic and diluted loss per share for Fiscal 2021 was $(0.29). This represents an improvement, compared with a basic and diluted loss per share of $(0.59) for Fiscal 2020.
- EBITDA3 loss of approximately $2.8 million for Fiscal 2021 represents a decrease of approximately 22%, compared with a loss of approximately $3.6 million in Fiscal 2020.
Fiscal Q4 2021 Financial Summary
- Revenue for the fourth quarter was approximately $2.6 million, up from $1.6 million in the third quarter and $0.4 million in the same quarter a year ago. This represents a sequential increase of approximately 67% and approximately 591% from the fourth quarter of fiscal 2020.
- Gross margin1 as a percentage of revenue for the fourth quarter was 58%. This compares with 57% in the third quarter and 44% in the fourth quarter of 2020.
- Non-IFRS operating expenses2 in the fourth quarter were $1.9 million. This was down from $2.0 million in the third quarter, and up from $0.9 million in the same period a year ago.
- Basic and diluted loss per share for the fourth quarter was $(0.04). This represents an improvement, compared with a basic and diluted loss per share of $(0.12) in the third quarter and $(0.15) in the same period a year ago.
- EBITDA3 loss in the fourth quarter was $(0.1) million. This compared with a loss of approximately $(0.9) million in the third quarter and a loss of $(0.6) million in the same period a year ago.
Preliminary Q1 FY2022 and 1H FY 2022 Outlook4
As previously announced on April 7, 2022, the Company expects that revenue for the first quarter of 2022, ended March 31, 2022 will be approximately $2.0 million. Due to Covid-related business closures in China in late March, approximately $1.2 million in product shipments were pushed into Q2.
As of April 29, 2022, the Company had recognized a majority of this $1.2 million, with the remainder expected in the second quarter.
In addition, the Company reiterated from its April 7, 2022 news release that revenue for the first half of fiscal 2022 is expected to be in the range of $5.5 million to $7.0 million. At the midpoint of the outlook, this represents an increase of approximately 285% from the first half of fiscal 2021.
Non-IFRS operating expenses2 are expected to be between $4.5 million and $5.0 million, which includes the costs of the annual general meeting, the annual audit and headcount growth to support Spectra7's production ramp to meet rapidly growing demand from its data center customers in the second half of fiscal 2022. Non-IFRS operating expenses were approximately $3.9 million in the second half of fiscal 2021.
2021 Business Highlights
- A major China-based Hyperscaler began placing large volume orders in Q2 for Spectra7-based 200G PAM4 Active Copper Cable (ACC) interconnects.
- Wandtec, an innovative technology leading interconnect supplier, announced its collaboration with Spectra7 to deliver interconnect solutions for low power, low latency and extended reach, targeted at major datacenter operators and high-performance computing OEMs.
- On June 21, 2021, the Company commenced trading on the OTCQB(TM) Market in the United States to increase visibility to prospective US investors.
- Spectra7 continued to experience strong traction with its data center solutions and announced new customer design-ins in 2021, for a total of 98, of which 60% are for North American operators.
- Began production shipments in Q3 to a major China-based hyperscaler for Spectra7-based 200G PAM4 ACC interconnects.
- Demonstrated Spectra7's new GC1122 product for 112Gbps PAM4 based 800Gbps ACC interconnects at both DesignCon U.S. and China International Optoelectronic Exposition.
CEO Takes Medical Leave of Absence
The Company announced today that Chief Executive Officer Raouf Halim is taking a medical leave of absence due to an unexpected health issue. The leave is expected to be temporary.
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 co-manage Mr. Halim's duties during his leave.
"We fully support Raouf in his request to take this leave and wish him the best as he focuses on his health," said Mr. Pasek. "The board has complete confidence in the team that Raouf has built as they continue to drive the Company's strategy and I do not expect any disruptions to our day-to-day operations."
NOTES:
1 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.
2 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.
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 "EBITDA" in the MD&A for reconciliation to measures reported in the Company's financial statements.
4 This is forward-looking information and is based on a number of assumptions which includes the current customer purchase orders received, supply outlook and anticipated operational expenses. See "Cautionary Notes".