VICTORIA, BRITISH COLUMBIA--(Marketwired - Nov. 7, 2013) - Vecima Networks Inc. ("Vecima" or "the Company") (TSX:VCM), a leading designer and manufacturer in the broadband cable and wireless network infrastructure market, announced today that its board of directors has approved a special cash dividend of $0.46 per common share and authorized the Company to seek shareholder approval to permit an additional special cash distribution, in the form of a return of capital, of $0.54 per common share.
The special cash dividend of $0.46 per share is to be paid on December 31, 2013 to holders of record of common shares at the close of business on December 6, 2013.
The additional proposed special cash distribution, in the form of a return of capital, of $0.54 per common share is conditional upon the Company's shareholders approving a special resolution to reduce the stated capital of the common shares. The special cash distribution is also contingent upon the previously announced sale by the Company of its building in Saskatoon for expected proceeds of $13.4 million, which is scheduled to occur on December 1, 2013. Dr. Surinder Kumar, Dr. Hugh Wood and their respective holding companies, which collectively hold approximately 78% of the outstanding common shares of the Company, have advised Vecima that they intend to vote their shares in favour of the special resolution. The Company plans for shareholders to consider the special resolution at its annual general and special meeting scheduled for December 13, 2013. If the return of capital is approved by shareholders and the sale of the Company's Saskatoon building occurs as planned, it is expected the special cash distribution will be paid to shareholders on or about December 31, 2013.
The aggregate amount of the dividend and proposed distribution is expected to be approximately $22.3 million. Vecima believes that its available financial resources following payment of the dividend and proposed distribution will be sufficient to fund Vecima's current capital requirements.
"Vecima has followed our stated strategy of monetizing non-core assets. This combined with our strong cash flow from operations has resulted in our healthy cash balance. The board of directors has determined that the Company has excess capital and in light of low interest rates available on highly liquid investments in the marketplace, it is prudent to make the dividend and propose the cash distribution to shareholders," said Sumit Kumar, President and CEO of Vecima. "Following the dividend and the proposed distribution, our balance sheet will remain strong and we will continue to explore opportunities to maximize shareholder value."
About Vecima Networks
Vecima Networks Inc. (TSX:VCM) designs, manufactures and sells products that enable broadband access to cable, wireless and telephony networks. Vecima's hardware products incorporate original embedded software to meet the complex requirements of next-generation, high-speed digital networks. Service providers use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services. Vecima's solutions allow service providers to rapidly and cost-effectively bridge the final network segment that connects the system directly to end users, commonly referred to as "the last mile", by overcoming the bottleneck resulting from insufficient carrying capacity in legacy, last mile infrastructures. Vecima's products are directed at two principal markets: Converged Wired Solutions and Broadband Wireless. The Company has also developed and continues to focus on developing products to address emerging markets such as Voice over Internet Protocol, fibre to the home and IP video. More information is available at our website at www.vecima.com.
Forward-Looking Statements
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release include statements about: the proposed special cash distribution to common shareholders, in the form of a return of capital, of $0.54 per share; the intention of Dr. Surinder Kumar, Dr. Hugh Wood and their respective holding companies to vote their shares in favour of the special resolution; the planned sale by the Company of its building in Saskatoon for expected proceeds of $13.4 million, which is scheduled to occur on December 1, 2013; the Company's plans for shareholders to consider the special resolution at its annual general and special meeting scheduled for December 13, 2013; the Company's plans to pay the dividend on December 31, 2013; the Company's expectation to pay the special cash distribution to shareholders on or about December 31, 2013 if the return of capital is approved by shareholders and the sale of the Company's Saskatoon building occurs as scheduled; the Company's belief that its available financial resources following payment of the dividend and proposed distribution will be sufficient to fund Vecima's current capital requirements; and, the Company's intention to continue to explore opportunities to maximize shareholder value.
In connection with the forward-looking information contained in this news release, Vecima has made numerous assumptions, regarding, among other things: shareholders of the Company approving a special resolution to reduce the stated capital of the common shares; the planned sale by the Company of its building in Saskatoon occurring as scheduled for the expected amount; the strength of the Company's balance sheet; the current share price of the Company; and, the present or potential value of the Company's core technologies, business operations and asset holdings. While Vecima considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Vecima's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: the Company's shareholders may not approve the special resolution required to reduce the stated capital of the common shares; the planned sale by the Company of its building in Saskatoon may not occur as scheduled or at all; the proceeds from the sale of the building in Saskatoon may be less than $13.4 million; any of Dr. Surinder Kumar, Dr. Hugh Wood and their respective holding companies may not vote their shares in favour of the special resolution; the planned date of the Company's shareholder meeting, the planned date of the dividend and the expected date of the special distribution may change; there may be no opportunities to maximize shareholder value, including future dispositions of non-core assets or cash dividends or distributions; receipt of regulatory approval and satisfaction of the other conditions required for the sale of the radio spectrum may not occur; the Company's share price may never increase and may decrease significantly; the Company's balance sheet, as well as value of its core technologies, business operations and asset holdings may be significantly weaker than currently estimated by the Company; there may be no further growth or profitability of the Company; and, there may be no further development or introduction of new products.
A more complete discussion of the risks and uncertainties facing Vecima is disclosed under the heading "Risk Factors" in the Company's Annual Information Form dated September 26, 2013, as well as the Company's continuous disclosure filings with Canadian securities regulatory authorities available at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Vecima disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.