Spectra7 Announces Preliminary First Quarter 2022 Revenue and Provides Business Update
Customer Orders Above $11 million with Unconstrained Customer Demand Continuing to Exceed $20 Million for 2022
Revenue for 1H Fiscal 2022 Expected to Increase Approximately 285% from 1H Fiscal Year 2021
SAN JOSE, Calif., April 7, 2022 /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 preliminary selected and unaudited revenue results and a business update for the three month period ended March 31, 2022. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.
- Due to Covid-related business closures in China in late March, approximately $1.2 million in product that was expected to ship in Q1 is now expected to ship in early April 2022
- Preliminary Q1 revenue is expected to be approximately $2.0 million, reflecting the aforementioned pushout of shipments
- Full Q1 demand was greater than $6 million, and total customer orders on hand for 2022 now exceed $11 million
- Added five new hyperscale data center design-ins in the first quarter, for a total of 103 to date
- Fiscal 2022 unconstrained product demand based on customer indications continues to exceed $20.0 million1
- Revenue realization expected to improve in the second half of the year due to accelerated deployment of capital to secure greater supply, as well as assembly and test capacity1
"The sudden Covid-related quarantines and temporary closures in China, coupled with the associated logistics issues, affected our ability to ship $1.2 million of product towards the end of the first quarter," said Raouf Halim, Chief Executive Officer. "The good news is that the majority of the approximately $1.2 million of product is expected to ship in early April. We are also accelerating deployment of capital from our October 2021 raise to secure supply for the remainder of the year."
"Order backlog remains strong going into Q2, and unconstrained product demand still exceeds $20 million for the year. 1 Deployment of our GaugeChanger™ technology is driving this robust growth as customers seek superior performance at a lower cost and lower power consumption than other technologies currently available. Momentum in our business is positive, and I remain confident in our outlook for significant growth in 2022," added Mr. Halim.
Constraints in the semiconductor supply chain are expected to last through the second quarter, which will limit near-term revenue. The Company is deploying a significant portion of capital generated from its CDN $14.8 million private placement completed in October 2021 to secure supply, as well as assembly and test capacity, to increase production volumes and grow revenue in the second half of the year.
While long-term trends in the business are favorable, continued supply chain disruptions and constraints lead the Company to expect that revenue for the first half of fiscal 2022 will 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. The second half of fiscal 2021 non-IFRS operating expenses were approximately $4.0 million.
1 This is forward-looking information and is based on a number of assumptions, which include the current customer purchase orders received, supply outlook and anticipated operational expenses. See "Cautionary Notes".
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.
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 data centers, virtual reality, augmented reality, mixed reality, and other connectivity markets. Spectra7 is based in San Jose, California with a design center in Cork, Ireland and technical support location in Dongguan, China. For more information, please visit www.spectra7.com.
Neither the TSX Venture Exchange nor its regulation services provided (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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 for 2022 revenue and operating expenses, revenue improvement and supply availability, the Company's expectation regarding product demand in 2022, 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, 2020. 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/Jim Fanucchi
Darrow Associates
214-597-8200
[email protected]
Spectra7 Microsystems Inc.
Bonnie Tomei
Chief Financial Officer
669-212-1089
[email protected]
Spectra7 Microsystems Inc.
John Mitchell
Public Relations
650-269-3043
[email protected]
SOURCE Spectra7 Microsystems Inc.
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