Golden Opportunities Fund’s Investee Company – Vecima Posts Record Year for Sales

  • September 26, 2008

Release Date: September 26, 2008
Cassandra Kyle
The StarPhoenix

Friday, September 26, 2008

Consumer demand for bandwidth infrastructure played a key role in Vecima Networks Inc.’s record 2008 fiscal year, the company’s chair and CEO said Thursday.

Financial results from 2008 show record sales of $120.6 million, up $26.8 million, or 29 per cent, from $93.7 million last year.

CEO Surinder Kumar said the growing demand for bandwidth infrastructure has kept the company busy designing, developing, building and selling products to a number of companies worldwide, including Motorola. Its net income before extraordinary items increased by 24 per cent to $11.9 million, or 51 cents per share, in 2008, up over 2007 figures of $9.6 million, or 42 cents per share.

Vecima, which has offices in Victoria, B.C., and Saskatoon, designs, manufactures and sells products that enable broadband access to cable, wireless, fibre and telephony networks.

"Virtually insatiable consumer demand for bandwidth and digital video streaming brought about in part by the emergence of social networking, file sharing and increased personalized television offerings has generated a necessity for advanced infrastructure products for digital television and data over cable services," Kumar said in a Thursday morning conference call with investors.

In addition to increased revenue, the company also reported its gross margin increased to 42 per cent, providing a gross profit of $50.8 million, up from 2007’s gross margin of 38 per cent, which provided a gross profit of $36 million. Research and development expenses for fiscal 2008 were up four per cent to $8.9 million, or seven per cent of sales, compared to $8.5 million, or nine per cent of sales, last year.

The company’s operating expenses were also up over fiscal 2007 to $33 million, or 27 per cent of sales, compared with $25.4 million, or 27 per cent of sales, last year. Vecima says the increase in research and development costs and operating expenses are mainly due to the acquisition of Spectrum Signal Processing in May 2007.

Vecima ended the fiscal year with 915 employees, 752 of which are located in Saskatoon.

"In fiscal 2008, we met the growing demand through the dedicated efforts of our employees, allowing us to deliver the previously mentioned record production results while laying a solid foundation for continued growth in our future periods," Kumar said.

The company is in a solid position to strengthen non-core assets and expand established markets in 2009, the CEO explained.

"In 2008 we positioned ourselves to be able to access new opportunities and respond to increased demand in our traditional markets," he said. "We expect to capitalize on a range of opportunities both in new and existing markets in the year ahead."

Vecima’s share value on the Toronto Stock Exchange closed Thursday at $5, up $0.30, or 6.38 per cent, from Wednesday.

© The StarPhoenix (Saskatoon) 2008