Vecima Networks revenue increases

November 15, 2007

Release Date: November 15, 2007
Cassandra Kyle, The StarPhoenix
Published: Thursday, November 15, 2007

Vecima Networks Inc. is reporting a 31 per cent increase in revenue for its fiscal first quarter, which ended Sept. 30, over the same period last year.

The company, which designs, manufactures and sells products that enable access to cable, wireless and telephone networks, announced Wednesday a total first quarter 2008 revenue of $26.4 million, up from $20.1 million from its first quarter of 2007.

Vecima, according to company president and CEO Surinder Kumar, would have increased its revenue by 39 per cent to $28.1 million if it wasn’t for the rise of the Canadian dollar. Still, the company was able to increase sales during the period due to higher levels of productivity.

Additionally, as a result of operating profits, shareholders’ equity increased by two per cent to $112.2 million at the end of the quarter, compared to $109.9 million at the end of the first quarter of fiscal 2007. Wireless operations in Saskatchewan grew 11 per cent to 7,903 subscribers from 7,104 at the end of Vecima’s fourth quarter in June, Kumar added.

Along with productivity and international contracts, Kumar credits an internal focus on product development for the increase in revenue.

“Vecima has begun to see returns from its strategic investment in R and D (research and development) and sales, as well as marketing, over the past number of quarters with growth in product portfolio and customer base,” he said in a conference call with journalists and market analysts from Vecima’s headquarters in Victoria, B.C.

Most of the company’s 800 employees work in Saskatoon.

Company investments in research and development increased by 46 per cent to $3.5 million, or 13 per cent of sales, in the first quarter, compared to $2.4 million, or 12 per cent of sales, at the end of the first quarter 2007. Vecima’s operating expenses also increased last quarter from 25 per cent last year to 30 per cent in the three months ended Sept. 30. Most of the expenditures, explained Kumar, were a result of the inclusion of Spectrum Signal Processing, which works in military communications, into Vecima’s operations.

The company expects operating expenses to drop in the coming years as its strategic plan increases sales.

Kumar added funds were also spent on the renovation of Saskatoon’s former downtown post office. A portion of the company’s employees in Saskatoon are expected to move into the building in November to relieve space constraints in the company’s other building near the airport.

The company also ended its first quarter with a 31 per cent increase in the number of employees.

© The StarPhoenix (Saskatoon) 2007