VCom Debuts on TSX
Release Date: November 15, 2005
VCom Inc., recently selected Saskatchewan Business of the Year at the annual ABEX awards, is now Canada’s newest publicly traded company.
The broadband communications equipment manufacturer announced Monday that an initial public offering (IPO) of its shares raised $25 million. In conjunction with the announcement, VCom has issued its first-quarter results for the 2006 fiscal year which show the company achieved net income of $2.4 million on sales of $17.3 million in the three months which ended Sept. 30.
The company issued its shares at $7.50 each and they closed up nearly six per cent to $7.93 Monday, the first day of trading on the TSX.
VCom’s corporate offices are located in Victoria, B.C., where it also operates a research and development laboratory. However, the company’s main manufacturing facility is located in Saskatoon’s airport industrial area where it now operates two shifts, employing 500 people.
In a phone interview from Victoria, VCom founder and CEO Surinder Kumar says about $8 million will be set aside from the IPO for plant expansion in both Victoria and Saskatoon. More than 90 per cent of the company’s products are built in Saskatoon.
He says the profit level shown within the company’s first public results refl ect the fact that VCom is not just a manufacturer, building other companies’ designs.
“We’re not manufacturing only,” he said. “These are leading-edge, state-of-the art products which we design and manufacture. These are our own designs.”
The manufacturing facility builds equipment that provides broadband access to cable, wireless and traditional telephone communications networks.
VCom’s equipment is purchased by cable companies and traditional telecom fi rms, but also new companies set up to transmit data over wireless networks to homes and offices.
The network equipment built by VCom can deliver voice, video and data over the same network to an end user.
Kumar says about 75 per cent of the equipment is purchased by U.S. companies, although one American purchaser intends to use the equipment in an installation in Thailand.
In issuing its first-quarter results after the market closed, VCom reports that because it did not prepare quarterly reports prior to going public, it did not have a comparison period in which to compare results.
However, VCom states the $2.4 million net income for its quarter is 19 per cent higher than the average quarterly income it had in the previous financial year which ended June 30.
Earlier this year, Kumar was recognized as the 2005 Ernst & Young Entrepreneur of the Year, in the information technology category.
Kumar, a former University of Saskatchewan engineering professor, leads the company from B.C. Hugh Wood, his former U of S colleague, is the chief operating officer, based in Saskatoon.
© The StarPhoenix (Saskatoon) 2005