Vitesse loss narrows as new product sales overtake legacy offerings
Vitesse Semiconductor Corp. continued its fight back to profitability in the third quarter, with new product revenues driving higher sales and its net loss narrowing to 7 cents per share.
In the same quarter a year earlier, the Camarillo-based firm had recorded a net loss of 17 cents per share.
Third-quarter revenue increased 3 percent to $27.2 million. The company lost $4.4 million in the most recent quarter, compared to a $6.4 million loss in the same quarter a year ago.
CEO Chris Gardner said Vitesse is still working towards profitability as new products overcome declining legacy revenues. The firm said that its legacy products will fade away faster than previously expected as it jumps on providing gear for the so-called Internet of things.
“We hit a major milestone as we continue to progress through our company transition,” he said in a conference call with investors, according to a transcript from Seeking Alpha. “Driven by this solid performance, we’ve reached an inflection point as new revenue outgrows the decline in our legacy business.”
Vitesse expects to profit from the Internet of things, the concept that many electronic devices in daily life — whether a thermostat, a refrigerator or a car — will be able to talk to one another the same way that computers, phones and tablets do today. The company makes integrated circuits that are used primarily in networking.
Vitesse predicted that legacy product revenue could fall 30 percent to 40 percent in the first half of 2015. In contrast, new product revenue for the quarter increased 79 percent year-over-year to $13.9 million. The firm said it expects those revenue gains to translate into profitability soon.
In June, the company netted $26.7 million in capital by selling 8.6 million shares in a move to reduce debt. The sold-out offering was Vitesse’s third stock offering in 18 months. The cash infusion was “really an important milestone to put our debt issues behind us after working at this for years,” Gardner told the Business Times in June.
Vitesse shares initially fell slightly on news of its third-quarter earnings, but later rebounded and ended the day down 1 cent to $3.03.
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