Strengthened Balance Sheet with C$12.5 Million in New Capital in the Second Quarter, C$11.7 Million in Debt Eliminated
Advancing Key Data Center Testing Activity
SAN JOSE, Calif., Aug. 29, 2024 /PRNewswire/ -- (TSXV:SEV) (OTCQB:SPVNF) Spectra7 Microsystems Inc. ("Spectra7" or the "Company"), a leader in high-performance analog semiconductors for broadband connectivity markets, such as AI networks, hyperscale data centers, and AR/VR, today announced its financial results for the three and six months ended June 30, 2024. A copy of the unaudited interim consolidated financial statements for the three and six months ended June 30, 2024, and the corresponding management's discussion and analysis (the "MD&A") will be available under the Company's profile on www.sedarplus.ca. Unless otherwise indicated, all dollar amounts in this press release are expressed in US dollars.
Second quarter 2024 financial highlights
Second quarter 2024 revenue was $0.9 million, increased from $0.8 million in the first quarter 2024 and decreased from $3.3 million in the second quarter 2023.
Gross margin1 was 64%, compared to 41% in the preceding quarter and 63% in the prior year second quarter.
Non-IFRS operating expenses2 were $2.5 million, increased from $2.1 million in the first quarter 2024 and $2.4 million in the second quarter 2023.
Basic and diluted loss per share for the second quarter 2024 was $(0.17), compared with a basic and diluted loss per share of $(0.06) in the first quarter 2024 and $(0.03) in the second quarter 2023.
EBITDA3 loss for the second quarter was $1.7 million, compared with an EBITDA loss of $1.4 million for the first quarter 2024 and an EBITDA loss of $148,000 in the second quarter 2023.
The Company completed a private placement of units for gross proceeds of approximately C$12.5 million. Additionally, the Company eliminated C$11.7 million in long-term debt by converting its outstanding debentures into equity securities on May 15, 2024.
"Spectra7 remains focused on advancing to commercial orders from top global datacenter customers for its new 100Gbps active copper cable products4. The Company is actively engaged in testing with data center and other customers, supported by our newly strengthened balance sheet," said Ron Pasek, Interim Chief Executive Officer.
NOTES:
1 Gross margin is a non-GAAP measure which is computed as revenue less cost of sales divided by revenue. Refer to "Revenue and Gross Margin" in the MD&A and the table below for reconciliation to measures reported in the Company's financial statements.
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands)
(In thousands)
2024
2023
Change
2024
2023
Change
$
$
$
%
$
$
$
%
Revenue
862
3,266
(2,404)
(74 %)
1,678
6,401
(4,723)
(74 %)
Cost of sales
314
1,211
(897)
(74 %)
797
2,383
(1,585)
(67 %)
Gross profit
548
2,056
(1,507)
(73 %)
881
4,018
(3,137)
(78 %)
Gross margin %
64 %
63 %
1 %
53 %
63 %
(10 %)
2 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. Refer to "Non-GAAP Measures" in the MD&A and the table below for reconciliation to measures reported in the Company's financial statements.
in thousands
2022
2023
2024
Sep 30
Dec 31
Mar 31
Jun 30
Sep 30
Dec 31
Mar 31
Jun 30
$
$
$
$
$
$
$
$
Total expenses - IFRS
2,936
3,210
3,053
3,330
3,086
4,479
2,575
9,866
Share‑based compensation
567
