Spectra7 Announces Preliminary Third Quarter 2021 Results; Revenue Increases More Than 400% Year-Over-Year
Total Order Backlog Over $7.2 Million Starting Q4 2021
Continued Revenue Growth Expected to Drive EBITDA Profitability in Q4 2021
SAN JOSE, Calif., Oct. 4, 2021 /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 unaudited financial results for the three month period ended September 30, 2021. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.
PRELIMINARY Q3 2021 RESULTS1
The Company expects to report revenue of approximately $1.5 million in the third quarter of 2021, compared to $0.3 million in the third quarter of 2020. Revenue more than doubled sequentially from $0.7 million in the second quarter of 2021. These results represent an increase of more than 400% year-over-year and 100% sequentially.
Gross margin2 as a percentage of revenue in the third quarter is expected to be approximately 58%, compared to 55% in the third quarter of 2020 and 59% in the second quarter of 2021. Non-IFRS operating expenditures3 for the Company are expected to be in the range of $1.8 million to $2.0 million, compared with $1.1 million in the third quarter of 2020 and $1.8 million in the second quarter of 2021, as the Company continues to focus on its production ramp to meet rapidly growing demand from its data center customers.
CEO COMMENTARY
"Customer shipments continued to ramp in the third quarter, leading to revenue more than doubling on a sequential basis to $1.5 million," said Raouf Halim, Chief Executive Officer. "We expect this momentum to continue in the fourth quarter, with our outlook calling for revenue to again double on a sequential basis, driven by strong backlog of confirmed customer orders now stretching into 2022. 4"
Q4 2021 Financial Outlook4
Led by increasing order backlog for its data center products, the Company expects significant growth in revenue for the fourth quarter of 2021, to a range of between $2.5 million and $3.5 million4. At the midpoint, this would represent an increase of almost 800% compared to revenue of $0.4 million in the fourth quarter of 2020. Total order backlog starting Q4 2021 has grown to over $7.2 million.
With this current outlook, the Company anticipates that it will achieve EBITDA5 profitability in Q4 20214.
NOTES:
1 All information herein is subject to change based on the reported unaudited results for the three and nine months ending September 30, 2021, which are expected to be reported in November 2021.
2 Gross margin is a non-GAAP measure which is comprised of revenue less cost of sales divided by revenue.
3 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.
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 expenditures. See "Cautionary Notes".
5 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.
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 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.
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 financial results that the Company expects to report in the unaudited condensed interim consolidated financial statements of the Company for the three and nine month periods ending September 30, 2021, the Company's financial projections relating to EBITDA profitability in the fourth quarter of 2021, the Company's projection that a strong backlog of customer orders will extend into 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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