Wednesday, March 03, 1999
Tundra justifies investor faith
Revenue climbs 33%: High-tech firm expects continued strong growth
Jill Vardy
Financial Post
Wayne Hiebert, Ottawa Citizen / Adam Chowaniec, chief executive of Tundra Semiconductor Corp., leads revenue-spinning company.
Tundra Semiconductor Corp.'s first quarter as a public company was one that justified the strong investor appetite for the shares it issued almost a month ago.
Tundra reported net income yesterday of $539,000 in its third quarter ended Jan. 31, up 83% from the $295,000 reported in its third quarter a year ago. Revenue jumped 33% to $7.3-million, a record for the semiconductor company and its tenth consecutive quarter of revenue growth.
The results were at or slightly better than estimates of analysts covering the company. In the first nine months of Tundra's current fiscal year, company revenue has grown by 38% and the company has earned $1.4-million.
Tundra is what's known as a "fabless" semiconductor company. It designs and sells specialized computer chips. The company, which was founded as an affiliate of Newbridge Networks Corp., did an initial public offering in early February. The shares, which were oversubscribed, began trading at $9.25 and immediately shot up to $13 on Feb. 8. They closed yesterday down 50¢ at $11.
Normand Paquette, Tundra's vice-president of finance, said he expects revenue growth to remain strong, although he stopped short of predicting it will continue to grow at the pace of recent months. "The crossover peripherals market [which is Tundra's market niche] is growing at roughly 25% and we feel that level is easily maintainable or surpassable," he said.
"This is a hot company in a hot market," said Duncan Stewart, a technology analyst who manages the Navigator Canadian Technology Fund. He said PMC Sierra, a Coquitlam, B.C., firm in the same market space as Tundra, is trading at more than $70 on Nasdaq.
Another technology analyst, speaking on condition of anonymity, said Tundra executives have "set reasonable expectations and consistently exceeded them."
Tundra's semiconductor chips are sold to customers that include Northern Telecom Ltd., Newbridge Networks, and Motorola Inc. The chips are used for "bus-bridging" -- systems that connect computers with other computing systems in such products as photocopiers and cable modems.
Last month's public offering raised $31.1-million, which Tundra will put toward R&D and general corporate purposes, the company says.
Tundra had planned an IPO last autumn, but the Asian economic crisis and plunging stock markets last fall forced its postponement. |
