C-COM Satellite Systems said Wednesday its revenues plummeted nearly 80 per cent in the first quarter compared with the previous year as “sluggish” market conditions weighed on the firm’s bottom line.
C-COM reported revenues of $683,949 in the three-month period ending Feb. 28, down from $3 million in the first quarter of 2022.
The Ottawa-based provider of commercial-grade mobile auto-deploying satellite antenna systems posted a net loss of $176,135 in the quarter, compared with a net income of $593,575, or one cent per share, a year ago.
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“Demand for our products remained sluggish throughout Q1 in the face of global fears of recession and continued inflation,” president and CEO Leslie Klein said in a news release.
In financial documents filed with regulators on Wednesday, the company said “weak global economic conditions” took a toll on sales in the first quarter.
C-COM cited a number of headwinds, including economic uncertainty due to the war in Ukraine, embargoes that have prevented it from selling to Russian-based resellers, supply chain disruptions, component shortages and fear of a global recession.
“These factors are all having a negative effect and are reflected in our lower-than-usual revenues in this first quarter,” the company said.
Still, Klein noted that C-COM’s gross margin performance of 68 per cent in the quarter was “stronger than usual.”
The CEO said the company is also seeing rising demand for its products in several new verticals. He added that potential customers are showing “very high interest” in the electronically steered, phased-array antenna system C-COM is developing with researchers at the University of Waterloo.
“We remain cautiously optimistic about the future,” Klein said. “The need for emergency communications and cellular backhaul has been rapidly increasing. We are also anticipating an increased demand from the oil and gas and other commodity exploration activities, which have not been very active over the past few years.”
C-COM’s share price was unchanged at $1.21 in late-afternoon trading Wednesday on the TSX Venture Exchange. The company’s stock has shed nearly 14 per cent of its value since the start of January.
