VCom Reports Strong Second Quarter Results
Release Date: February 14, 2006
16:20 EST Tuesday, February 14, 2006
VICTORIA, BRITISH COLUMBIA–(CCNMatthews – Feb. 14, 2006) – VCom Inc. (TSX:VCM) today announced that its 2006 fiscal year second quarter interim financial and operating results for the three months and six months ended December 31, 2005 have been filed on the SEDAR system. The highlights provided in this press release should be read in conjunction with the Company’s final prospectus dated November 3, 2005, relating to our initial public offering of shares, and our unaudited interim financial statement and Management Discussion and Analysis for the second quarter, which are available on SEDAR at www.sedar.com.
All dollar amounts are in Canadian dollars. As quarterly reports were not prepared in the previous fiscal year, it is impracticable to present prior-period information on a basis consistent with the results for the three months and six months ended December 31, 2005.
- Total revenue for the second quarter was $19.1 million. Sales for the six months ended December 31, 2005 were $36.7 million. Excluding the effect of a non-recurring event last year, our six-month revenue this fiscal year was 21% higher than one-half of our fiscal 2005 operating revenue. The increase in revenue was achieved in spite of the 575 basis point appreciation in the average value of the Canadian dollar during this period as compared to the average last fiscal year.
- Gross margin was 37% for both the second quarter and the first half of our 2006 fiscal year, within our model of 35 to 39%.
- The second quarter was the first period in which we had to record expenses for options granted under our stock options plan. Stock-based compensation expense of $528,000 was incurred in the quarter. Including the effects of non-cash stock-based compensation expense, VCom’s net income for the second quarter was $2.4 million or $0.12 per share. Including the effects of stock-based compensation, net income for the six months ended December 31, 2005 was $4.8 million or $0.24 per share. Excluding the effects of non-cash stock-based compensation expense and the non-recurring revenue event from last year, our net income is up 33% over one-half of the operating net income for the fiscal year ended June 30, 2005.
- Shareholders’ equity increased to $69.4 million at December 31, 2005 from $38.5 million at June 30, 2005, as a result of operating profits and successful completion of our IPO.
- VCom continues to make progress in introducing new products in the standards-based wireless and digital video markets while controlling operational expenses. Operating expenses in the second quarter were 17% of total revenue excluding the 3% of sales in non-cash stock-based compensation. This compares to operating expenses of 19% for our last fiscal year.
- VCom ended the second quarter with 531 employees representing a 4% increase from the 513 employees at the end of the first quarter and an increase of 14% from the 466 personnel at December 31, 2004.
- On November 14, 2005, the Company successfully completed its initial public offering of 3,335,000 common shares at a purchase price of $7.50 per share for gross proceeds of $25,012,500. On November 25, 2005, our underwriters exercised their over-allotment option by purchasing an additional 500,250 common shares (of which 225,250 were issued by VCom and 275,000 were sold by its principal shareholders) at $7.50 per share. The Company’s common shares began trading on November 14, 2005 on the Toronto Stock Exchange under the symbol “VCM”.
We design, manufacture and sell products that enable broadband access to cable, wireless and telephony networks. Our hardware products incorporate embedded software developed by us to meet the complex requirements of next-generation, high-speed digital networks. Service providers use our 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. Our solutions allow service providers to rapidly and cost-effectively bridge the final network segment that connects a 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. Visit VCom at www.vcom.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chief Financial Officer