Strengthened Balance Sheet with C$12.5 Million in New Capital in the Second Quarter, C$11.7 Million in Debt Eliminated
Advancing Key Data Center Testing Activity
SAN JOSE, Calif., Aug. 29, 2024 /PRNewswire/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leader in high-performance analog semiconductors for broadband connectivity markets, such as AI networks, hyperscale data centers, and AR/VR, today announced its financial results for the three and six months ended June 30, 2024. A copy of the unaudited interim consolidated financial statements for the three and six months ended June 30, 2024, and the corresponding management's discussion and analysis (the "MD&A") will be available under the Company's profile on www.sedarplus.ca. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.
Second quarter 2024 financial highlights
- Second quarter 2024 revenue was $0.9 million, increased from $0.8 million in the first quarter 2024 and decreased from $3.3 million in the second quarter 2023.
- Gross margin1 was 64%, compared to 41% in the preceding quarter and 63% in the prior year second quarter.
- Non-IFRS operating expenses2 were $2.5 million, increased from $2.1 million in the first quarter 2024 and $2.4 million in the second quarter 2023.
- Basic and diluted loss per share for the second quarter 2024 was $(0.17), compared with a basic and diluted loss per share of $(0.06) in the first quarter 2024 and $(0.03) in the second quarter 2023.
- EBITDA3 loss for the second quarter was $1.7 million, compared with an EBITDA loss of $1.4 million for the first quarter 2024 and an EBITDA loss of $148,000 in the second quarter 2023.
The Company completed a private placement of units for gross proceeds of approximately C$12.5 million. Additionally, the Company eliminated C$11.7 million in long-term debt by converting its outstanding debentures into equity securities on May 15, 2024.
"Spectra7 remains focused on advancing to commercial orders from top global datacenter customers for its new 100Gbps active copper cable products4. The Company is actively engaged in testing with data center and other customers, supported by our newly strengthened balance sheet," said Ron Pasek, Interim Chief Executive Officer.
NOTES:
1 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 and the table below for reconciliation to measures reported in the Company's financial statements.
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
(In thousands)
|
|
(In thousands)
|
|
2024
|
|
2023
|
|
Change
|
|
|
2024
|
|
2023
|
|
Change
|
|
|
$
|
|
$
|
|
$
|
%
|
|
$
|
|
$
|
|
$
|
%
|
|
Revenue
|
862
|
|
3,266
|
|
(2,404)
|
(74 %)
|
|
1,678
|
|
6,401
|
|
(4,723)
|
(74 %)
|
|
Cost of sales
|
314
|
|
1,211
|
|
(897)
|
(74 %)
|
|
797
|
|
2,383
|
|
(1,585)
|
(67 %)
|
|
Gross profit
|
548
|
|
2,056
|
|
(1,507)
|
(73 %)
|
|
881
|
|
4,018
|
|
(3,137)
|
(78 %)
|
|
Gross margin %
|
64 %
|
|
63 %
|
|
1 %
|
|
|
53 %
|
|
63 %
|
|
(10 %)
|
|
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-GAAP Measures" in the MD&A and the table below for reconciliation to measures reported in the Company's financial statements.
|
|
in thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses - IFRS
|
|
2,936
|
3,210
|
|
3,053
|
3,330
|
3,086
|
4,479
|
|
2,575
|
9,866
|
|
Share‑based compensation
|
|
567
|
469
|
|
541
|
486
|
288
|
334
|
|
182
|
270
|
|
Interest on lease obligation of right-of-use assets
|
|
4
|
3
|
|
1
|
4
|
4
|
3
|
|
1
|
3
|
|
Accretion expense
|
|
463
|
425
|
|
370
|
389
|
411
|
493
|
|
538
|
142
|
|
Other income
|
|
-
|
-
|
|
-
|
(12)
|
(30)
|
(9)
|
|
-
|
10
|
|
Foreign exchange gain
|
|
(9)
|
354
|
|
(72)
|
57
|
(110)
|
143
|
|
(211)
|
27
|
|
Extingushment of convertible debt
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
6,922
|
|
Termination cost
|
|
|
-
|
|
|
|
|
-
|
|
-
|
-
|
|
Non-IFRS operating expenses
|
|
1,911
|
1,959
|
|
2,212
|
2,407
|
2,523
|
3,515
|
|
2,065
|
2,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net of investment
tax credits and including amortization of licenses
|
|
985
|
928
|
|
995
|
1,195
|
1,409
|
1,154
|
|
1,040
|
1,123
|
|
Sales and marketing
|
|
224
|
280
|
|
269
|
252
|
271
|
325
|
|
279
|
270
|
|
General and administrative
|
|
635
|
684
|
|
881
|
891
|
762
|
1,947
|
|
657
|
1,014
|
|
Depreciation of right-of-use assets
|
|
60
|
60
|
|
60
|
60
|
60
|
60
|
|
60
|
57
|
|
Depreciation of property and equipment
|
|
7
|
8
|
|
8
|
8
|
21
|
28
|
|
28
|
28
|
|
Non-IFRS operating expenses
|
|
1,911
|
1,959
|
|
2,212
|
2,407
|
2,523
|
3,515
|
|
2,065
|
2,491
|
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 and the table below for reconciliation to measures reported in the Company's annual financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in thousands
|
|
|
2022
|
|
2023
|
|
2024
|
|
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
Sep 30
|
Dec 31
|
|
Mar 31
|
Jun 30
|
|
|
$
|
$
|
|
$
|
$
|
$
|
$
|
|
$
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(1,461)
|
(1,231)
|
|
(1,090)
|
(1,275)
|
(1,500)
|
(4,315)
|
|
(2,242)
|
(9,318)
|
|
Depreciation of right-of-use assets
|
|
60
|
60
|
|
60
|
60
|
60
|
60
|
|
60
|
57
|
|
Depreciation of property and equipment
|
|
7
|
8
|
|
8
|
8
|
21
|
28
|
|
28
|
28
|
|
Depreciation expense - COGS
|
|
31
|
35
|
|
35
|
30
|
31
|
31
|
|
32
|
32
|
|
Amortization - intangible assets
|
|
137
|
55
|
|
76
|
105
|
90
|
179
|
|
167
|
167
|
|
Share-based compensation
|
|
567
|
469
|
|
541
|
486
|
288
|
334
|
|
182
|
270
|
|
Interest on lease obligation of right-of-use assets
|
|
4
|
3
|
|
1
|
4
|
4
|
3
|
|
1
|
3
|
|
Accretion expense
|
|
463
|
425
|
|
370
|
389
|
411
|
493
|
|
538
|
142
|
|
Other income
|
|
-
|
-
|
|
-
|
(12)
|
(30)
|
(9)
|
|
-
|
10
|
|
Foreign Tax
|
|
-
|
(216)
|
|
-
|
-
|
-
|
(119)
|
|
-
|
-
|
|
Foreign exchange gain
|
|
(9)
|
354
|
|
(72)
|
57
|
(110)
|
143
|
|
(211)
|
27
|
|
Extingushment of convertible debt
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
6,922
|
|
Other income
|
|
-
|
-
|
|
-
|
-
|
-
|
-
|
|
-
|
-
|
|
EBITDA
|
|
(201)
|
(38)
|
|
(70)
|
(148)
|
(734)
|
(3,172)
|
|
(1,445)
|
(1,659)
|
4 This is forward-looking information and is based on a number of assumptions. See "Cautionary Notes" below.
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 expectation that it will advance to commercial orders from top global datacenter customers for its new 100Gbps active copper cable products, 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, 2023.. 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, Managing Director
Darrow Associates Investor Relations
mkreps@darrowir.com
214-597-8200
Spectra7 Microsystems Inc.
Dave Mier
Interim Chief Financial Officer
925-858-7011
ir@spectra7.com
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SOURCE Spectra7 Microsystems Inc.
