Sequential Increases in Revenue, Gross Margin and Adjusted EBITDA
TORONTO, Aug. 13, 2015 /CNW/ – Baylin Technologies Inc. (TSX: BYL) (the “Company” or “Baylin”), a global provider of innovative antenna solutions for the broadband, mobile and wireless infrastructure markets, today announced its financial results for the three and six months ended June 30, 2015. All figures are stated in United States dollars unless otherwise noted.
Fiscal Q2 2015 Highlights
• Revenue in Q2 2015 was $10.0 million, up 25.6% from $8.0 million in Q1 2015.
• Gross profit for Q2 2015 was $2.2 million, up 115.3% from $1.0 million in Q1 2015. o Gross profit margin was 22.2% in Q2 2015, compared to 12.9% in Q1 2015.
• Adjusted EBITDA in Q2 2014 was $(1.3) million, an improvement of $1.6 million from Q1 2015 adjusted EBITDA of $(2.9) million.
• Total cash and cash equivalents were $16.3 million at June 30, 2015.
• Mr. David Wittwer was promoted to the role of Chief Technology Officer. Mr. Wittwer will oversee the engineering and R&D departments in Israel and Phoenix.
“In the quarter, we delivered double-digit revenue growth as well as improvements to gross profit and adjusted EBITDA, compared to Q1 2015” said Randy Dewey, Interim President and Chief Executive Officer. “Despite a still challenging macro environment for our Mobile product line, our Infrastructure sales have increased sequentially and the Networking product line continues to grow and deliver strong margins. With the improvement this quarter and further sales traction, we anticipate our financial performance to continue to improve in the second half of 2015. We appear to be on track towards our goal of being cash flow positive by the end of 2015.”
Mr. Dewey added: “We’ve added notable new executives to the leadership team as we continue to shift our focus to our Infrastructure product line and position ourselves as a more sales centered organization. The Board of Directors and the senior management team believe that as our business stabilizes over the course of 2015, we will exit the year prepared to meet the increased demand for our products in 2016.”
Selected Financial Information
(In thousands of United States dollars except per share amounts)
The Company’s complete financial statements and Management’s Discussion & Analysis for the three months ended June 30, 2015 are available at baylintech.com/investor-relations/ and www.sedar.com/.
Revenues Revenues for Q2 2015 were $10.0 million, an increase of $2.1 million over $7.9 million in Q1 2015, reflecting higher Broadband and Infrastructure product sales. Compared to Q2 2014, revenues declined 32.7%. The year-over-year decrease was a result of a substantial reduction in orders from a key mobile customer, which was offset, in part, by stronger sales in the broadband and infrastructure markets.
Gross Profit Gross profit for Q2 2015 was $2.2 million, an increase of $1.2 million over $1.0 million in Q1 2015. Gross margin for Q2 2015 was 22.2%, compared with 12.9% in Q1 2015. These sequential improvements reflect a reduction in fixed manufacturing costs and a higher contribution margin on the Company’s variable costs. Q2 2014 gross profit was $2.0 million and gross margin was 18.8%. The year-over-year increase is the result of lower material and labor costs.
Research and Development Research and development (“R&D”) costs were $1.5 million in Q2 2015, compared to $1.8 million in Q2 2014. The decrease in R&D costs is the result of a reduction in headcount that was initiated over the course of 2014 as well as a reduction in the amount of new patent work undertaken by the Company.
Sales and Marketing Sales and Marketing costs for Q2 2015 were $1.1 million, a 17.7% increase compared to $0.9 million in Q2 2014. The increase is due to the Company’s participation in more trade shows and recruitment of new sales and marketing employees, all aimed at driving sales momentum and greater brand awareness.
General and Administrative General and administrative (“G&A”) costs were $2.3 million for Q2 2015, compared to $2.6 million for Q2 2014. G&A expenses decreased as a result of a lower payroll reflecting the departure of senior executives.
Adjusted EBITDA Q2 2015 adjusted EBITDA improved by $1.6 million to $(1.3) million ourhealthissues.com/product/priligy/ compared to $(2.9) million in Q1 2015. Adjusted EBITDA for Q2 2014 was $(2.6) million. The sequential improvement reflects the increase in revenue, gross profit and the reduction in operating and R&D expenses while the year-over-year improvement reflects the increase in gross profit and the reduction in operating and R&D expenses.
Net Income (Loss) Net loss in Q2 2015 was $2.7 million a decrease of $3.1 million over a net loss of $5.7 million in Q1 2015. Compared with Q2 2014, net loss increased by 10.8%. The year-over-year increase in net loss was a flow-through effect from the decrease in revenues during the quarter and an increase in certain non-cash expenses.
Liquidity As at June 30, 2015, the Company had cash and cash equivalents totaling $16.3 million and working capital of $13.8 million.
(1) Non-IFRS Measures
Baylin uses EBITDA and Adjusted EBITDA to measure its strength and its future ability to generate and sustain earnings. EBITDA refers to earnings before interest (finance expenses, net), taxes, depreciation, and amortization and discontinued operations. Adjusted EBITDA refers to EBITDA less items of an exceptional nature that are outside of the ordinary course of business. Such items include, but are not limited to, certain exceptional, non-recurring share-based compensation, capital gains and losses, restructuring costs, recognition of significant provisions and other significant non-cash transactions. We do not believe these items reflect the underlying performance of our business. EBITDA and Adjusted EBITDA are non-IFRS performance measures. We believe that, in addition to net earnings, EBITDA and Adjusted EBITDA are useful complementary measures of pre-tax profitability and are commonly used by the financial and investment community for valuation purposes.
Forward Looking Statements
Certain statements contained in this news release, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that any forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks, uncertainties and other factors include, among other things those risks identified in Baylin’s annual information form dated March 20, 2015 filed on SEDAR at www.sedar.com.
Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of Baylin. Accordingly, readers should not place undue reliance on forward-looking statements or information. Baylin undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information herein are qualified by this cautionary statement.
Baylin (TSX: BYL) is a leading global technology company with more than 37 years of experience in designing, producing and supplying innovative antennas for the mobile, broadband and wireless infrastructure industries. We strive to meet our customers’ needs by being their trusted partner from initial design to production with an extensive portfolio of custom engineered solutions as well as leading edge off-the-shelf antenna product.
SOURCE Baylin Technologies Inc.