TORONTO, ON — (Marketwired) — 11/06/14 — Baylin Technologies Inc. (TSX: BYL), a global provider of innovative antenna solutions for the mobile, broadband and wireless infrastructure markets, today announced its financial results for the three and nine months ended September 30, 2014. All figures are stated in United States dollars unless otherwise noted.
Third Quarter 2014 Highlights
- Revenue in Q3 2014 was $13.4 million, up 25.0% from $10.7 million in Q2 2014.
- Gross profit for Q3 2014 was $3.2 million, up 57.8% from $2.0 million in Q2 2014. o Gross profit margin was 23.8% in Q3 2014, compared to 18.8% in Q2 2014.
- Adjusted EBITDA in Q3 2014 was $(1.4) million, an improvement of $1.2 million from Q2 2014 adjusted EBITDA of $(2.6) million.
- Total cash and cash equivalents were $30.3 million at September 30, 2014.
- Strengthened senior team by adding industry experts Mike Moon (Country Manager, Galtronics Korea) and Ray Hild (North American Vice President – Infrastructure Sales).
- Company has taken steps to reduce cost given decrease in mobile phone antenna revenue in 2014.
“In the third quarter, we saw sequential growth across all three of our product lines — broadband, mobile and infrastructure — which translated into meaningful revenue and profitability improvements compared to Q2 2014,” said Ephraim Ulmer , President and Chief Executive Officer of Baylin. “Emerging from a challenging first half of 2014, we’re encouraged by our success in diversifying the business by product line and customer. Our infrastructure revenue continues to grow strongly and we have sales momentum with our in-building, stadium, and, more recently, our outdoor DAS products. Third-quarter revenue from these products was more than double the revenue we generated in all of 2013. We’re also pleased with the results and pipeline in broadband, where our sales efforts over the past 18 months are yielding results, and we have become a leader in carrier-grade home gateways, a new product area. This will be one of the growth drivers for the broadband product line, moving into 2015. Lastly, despite significant industry headwinds in the mobile space, we are winning new projects and a number of phone and tablet OEMs are evaluating our 4GA™* leading broadband antenna technology which is specifically optimized for devices with high speed LTE Advanced connectivity.”
Financial Summary Revenue for Q3 2014 was $13.4 million, an increase of 25.0% from $10.7 million in Q2 2014, driven by higher sales in the Company’s three product lines. Compared with Q3 2013, revenue decreased by 32.7%. The year-over-year decrease was as a result of a previously disclosed substantial reduction in orders from a key mobile customer. This was the main factor in the year-over-year decreases in revenue, gross profit and adjusted EBITDA. The reduction in revenue from this one customer was offset, in part, by strong sales of new antenna products in broadband and infrastructure.
Gross profit for Q3 2014 was $3.2 million, an increase of $1.2 million over $2.0 million in Q2 2014. Gross margin for Q3 2014 was 23.8%, compared with 18.8% in Q2 2014. These sequential improvements reflect higher sales in all product lines, particularly in broadband and infrastructure. Q3 2013 gross profit was $5.8 million and gross margin was 29.2%.
General and Administrative (“G&A”) expenses for Q3 2014 were $2.3 million, a 71.1% decrease compared to $7.9 million for Q3 2013. The year-over-year decrease was a result of a $6.1 million share-based compensation expense recognized in Q3 2013.
Sales and Marketing expenses for Q3 2014 were $1.0 million, a 44.4% increase compared to $0.7 million in Q3 2013. The increase is due to greater trade show participation and recruitment of new sales and marketing employees, which are aimed at generating increased support for the continued growth in sales momentum and greater brand awareness.
Q3 2014 adjusted EBITDA improved by $1.2 million to $(1.4) million onlinepharmacies247.com/zovirax_generic.html compared to $(2.6) million in Q2 2014. Adjusted EBITDA for Q3 2013 was $2.5 million. The year-over-year decrease reflects the above mentioned reduction in orders from a key mobile customer.
As at September 30, 2014, Baylin had working capital of $28.0 million, compared with $41.4 million at December 31, 2013.
As at September 30, 2014 there were 18.7 million common shares outstanding.
The Company’s complete financial statements and Management’s Discussion & Analysis for Q3 2014 are available atbaylintech.com/investor-relations/ and www.sedar.com/.
(1) Non-IFRS Measures
Baylin use 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. Baylin does not believe these items reflect the underlying performance of its business. EBITDA and Adjusted EBITDA are non-IFRS performance measures.
Baylin believes 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.
* 4GA™ is a trademark of Galtronics Corporation
Baylin (TSX: BYL) is a leading global technology company with more than 35 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.
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 prospectus filed on SEDAR atwww.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.